Traverse, division of labour and emerging structures

Economic development is basically an evolutionary process of structural transformation. Observing an economy that is yet not developed, it is seen that the depth of the production process is shallow, the final product being mainly the result of direct labour. As development unfolds, the economy is subject to deepening by the application of productive capital: it becomes more mechanised as a result of innovation and technical progress. Hicks and other authors have investigated the transition when a change in techniques occurs or when the economy is involved in the transformation of structural characteristics highlighting the trade-off's and social costs implied by the traverse as a consequence of the economy's inherent rigidities. Yet these models are not sufficiently general since they dodge the question of simultaneity of the production process. To deal with these issues, a Sraffa-Von Neuman model can be used highlighting the simultaneity of production processes but retaining the crucial features of neo-Austrian ones. It can be shown that technical progress subjects changing economies to continuous traverse causing increasing complexity: division of labour is then the analytically appropriate answer. Section one is the introduction. Section two sets out Hicks' main analytical framework. Section three is devoted to an analysis of how vertically integrated production undergoes traverse and lengthens . Section four proposes a model of diffusion of technological paradigms as a process of local search on random landscapes from which division of labour emerges. Section five draws the conclusions.