> It would strike me that with massive labor shortages, many businesses will look to technology to replace labor.
Sraffa went over this in his Production of Commodities by Means of Commodities:
> In essence, Sraffa shows that:
> 1. It is not possible to identify a law that simultaneously determines the wage and the rate of profit because: i) the rate of profit can only be determined by setting the wage (or vice versa); ii) it is impossible to measure capital without also determining prices (including the profit), so it is not possible to calculate the profit based on the value of capital (as its remuneration).
> 2. It cannot be assumed that, as wages increase, labour is replaced by capital, as the value of the capital depends on the duration of the initial investment; considering capitals of different duration, it may well happen that we prefer to replace capital with labour even if wages increase (so-called "return of techniques"); consequently unemployment cannot be attributed to the increase in wages.
Sraffa went over this in his Production of Commodities by Means of Commodities:
> In essence, Sraffa shows that:
> 1. It is not possible to identify a law that simultaneously determines the wage and the rate of profit because: i) the rate of profit can only be determined by setting the wage (or vice versa); ii) it is impossible to measure capital without also determining prices (including the profit), so it is not possible to calculate the profit based on the value of capital (as its remuneration).
> 2. It cannot be assumed that, as wages increase, labour is replaced by capital, as the value of the capital depends on the duration of the initial investment; considering capitals of different duration, it may well happen that we prefer to replace capital with labour even if wages increase (so-called "return of techniques"); consequently unemployment cannot be attributed to the increase in wages.
* https://en.wikipedia.org/wiki/Piero_Sraffa#Production_of_Com...