Increasing returns to scale and the prospects of small‐scale enterprises

It is a common misunderstanding that nineteenth‐century German economics rejected Ricardo and his thought. However, Ricardo exercised a strong influence on German views on production and distribution. In particular he influenced Wilhelm Roscher. Argues that Roscher in turn exercised a considerable influence on the work of Karl Marx. Analyses the aspects of Roscher′s work which were particularly influenced by Ricardo, and those where Roscher went beyond Ricardo, his notion of a macroeconomic production function; increasing returns to scale; and the role of small firms.