Factor substitution,ex ante and ex post

The amount of labor used per unit of capital stock (or investment) can be varied by any one of four quite different mechanisms. Two of these – changes in crew size and in capital utilization – are variable even ex post. These mechanisms are systemmatically related and all induce factor substitution in the same (neoclassical) direction with a change in relative factor prices. The conditions necessary to support the view that ‘factor prices don't matter’ are shown to be terribly stringent.