Measuring the Level of Technology in Moral Economics

Abstract

This theory-based paper attempts classifying and combining methods of orthodox and heterodox economics regarding the measurement of technology levels. The importance of measuring the level of technology is illustrated by technology being a key factor in several neoclassical models. However, just as for the concept of utility, traditional economics treats the level of technology as an abstract scientific construct, without attempts for an absolute quantification. This paper argues that through a systematic classification and various methods, starting- and end points, milestones and even units can be determined. Through surveying the literature, the paper identifies the existing options of measurement, and their shortcomings. Technology is looked at as a “stock”, as opposed to the overrepresented “flow” nature. This gives space for the methods of constructing an absolute scale, and for the unique concept of the “steady-state technology”. Distinctions are made between demand-side and supply-side measurement, as well as between historical and geometrical methods of constructing scales. The methods are illustrated, though not fully implemented, due to limitations in scale and scope. Finally, the paper shows how heterodox economic branches, such as the newly emerging moral economic school, allow for the demand-side measurement to a greater extent, given the adjusted economic axioms. Keywords: technology, demand side, historical method, geometrical method, moral economics