In this chapter the mathematical properties of a model in which only one commodity is produced by means of itself and homogeneous labor will be studied. While this model is exceedingly simple from the mathematical point of view, it is difficult from the conceptual one. The economic system contemplated is a highly abstract one in which it is assumed that only one commodity is produced; it is assumed that this commodity is produced by means of itself and homogeneous labor. The only relative price dealt with is the real wage rate. This model is introduced for illustrative purposes only. However, several of the concepts developed in this chapter and some of the results derived carry over, with some modifications, to the more general models dealt with in the subsequent chapters.

The structure of the present chapter is as follows. In Section 1 the technical conditions of production are described and discussed. Section 2 introduces the concept of viability. Section 3 deals with growth and consumption opportunities, Section 4 with the distribution of the product between workers and capital owners. Two alternative views concerning the connection between the growth–consumption and the wages–profits aspects of the system under consideration are discussed in Section 5, in which saving and investment behavior is introduced. Section 6 is devoted to the problem of the choice of technique. Section 7 deals with alternative conceptualizations of the relationship between distribution and growth.