On the present state of the capital controversy

Abstract

The post-war capital controversy seems to have had two distinguishable stages. Thanks to the unambiguous phenomena of reswitching and reverse capital deepening, the first stage was conclusive in discarding from pure theory the traditional versions of neoclassical theory relying on the notion of capital as a single quantity. Subsequently, however, when the implications of those phenomena came to the centre of the controversy, together with the reformulations of the theory, which intended to do away the 'quantity of capital', several misunderstandings prevented, I shall contend, decisive progress in the analysis and we entered an inconclusive phase of the discussion. Those unclarified misunderstandings, I shall also contend, have then left space for the credence that, whatever their methodological deficiencies, the reformulations of neoclassical theory that have been introduced in the theoretical mainstream—essentially by Hicks's Value and Capital (1939)—and which have become dominant after the first stage of the capital controversy, are immune of the inconsistencies affecting previous theory on the conception of capital. This has in turn left space for a second, no less unwarranted, consequence: a feeling that since those reformulations, and in particular general intertemporal equilibrium, would confirm at the level of pure theory the essential validity of the neoclassical demand-and-supply apparatus, they would also provide some validation for the admittedly imperfect previous concepts—foremost that of a 'quantity of capital'—as workable approximations in applied work.

Cite this work

No public copy is stored for this record, so only the metadata is cited.

Stored only when both papers are in the corpus — 51 citations exist upstream.

Papers that cite the same references — the relational fallback while embeddings are still backfilling.