Roundaboutness

Economics Economics Questions
1

I haven’t really been able to find a good, clear cut definition of ‘roundaboutness’. There seem to be several different, seemingly contradictory, definitions.

  1. Capital Intensity. Simple enough.

  2. The length of time of the production process.

  3. The concept that production occurs sequentially over time with capital goods being produced first, and consumer goods afterwards.

Now, when people use the phrase ‘increasingly roundabout production’, definitions one and two seem incompatible as one would expect a more capital intensive production process to reduce the length of time of the production process. I mean, if Crusoe decides to go from catching fish with his bare hands to using a net, obviously it will take time to make the net, but once he has his net he will catch more fish in a given period of time than previously. If the third definition is correct, then the phrase ‘increasingly roundabout production’ doesn’t make any sense.

Could anybody nudge me in the right direction?

2

It means, once one’s immediate consumptive needs are fulfilled, with consumer’s goods found in nature or produced by lower order producer goods, that they’ll begin investing in ever lengthening time horizons, and thus in ever higher orders of production. In this sense, the whole process is more “round-about”, as the whole structure of production is lengthened and expanded. At least this is how I understood it. Regarding time and production, for a given process, yes a shorter production time is preferrable. But roundaboutness refers to a different thing.

-Jon