Talk:Cambridge capital controversy

This page should be taken down. It is full of technical errors and ideologically motivated nonsense. Examples: production functions with more than two inputs are not unique to "general equilibrium models," SMD has nothing to do with representative agent models, most experts do not "agree that aggregate production functions are excessively simplistic" (this doesn't even make sense on its face -- most experts are, by definition, mainstream, so the remark amounts to the proposition that most economists disagree with themselves), and models with aggregations are not necessarily "inappropriate."

Comment: I´ve read the text above and it seems totally ideological. The article, in contrast, seems to me an excelent introduction to the problems of the necolassical theory of capital.

Consider a previous conclusion:

Since Samuelson had been one of the main defenders of the idea that heterogenous capital could be treated as a single capital good, his article conclusively showed that results from simplified models with one capital good do not necessarily hold in more general models. Most experts agree that the one capital good version neoclassical production function is simplistic but, as in all models, the simplistic version is often useful, particularly in empirical work. For this reason, the one capital good model continues to be used by researchers, especially in macroeconomics and growth theory. (See, for example, new classical economics.)

which is fair: it notes that the USA side of the CCC "lost," but also that the majority of economists believe that models with aggregate production functions are "often useful." That is simply a statement of fact, regardless of one personally believes agrees or disagrees with the majority on this issue. That conclusion was replaced with:

Since Samuelson had been one of the main defenders of the neoclassical canon against the critics from Cambridge, England, his article was taken as a major admission of defeat by the critics. Most experts agree that the aggregate neoclassical production function is excessively simplistic and theoretically unjustified. Samuelson himself now often uses multi-sectoral models of the Leontief-Sraffian tradition.

However, mainstream economists continue to use models with aggregate production functions, especially in macroeconomics and growth theory. (See, for example, new classical economics.) When these economists even take note of the controversy, they justify their use of such simplistic models with an instrumentalist methodology and a plea about the needs for simplicity in empirical work. This justification has never been given an extended defense in this context in the literature. '

The first paragraph contains factually inaccuracies: regardless of whether they are correct: most experts do not "agree that the aggregate neoclassical production function is excessively simplistic and theoretically unjustified." Further, "Samuelson himself" continued to use neoclassical models for the remainder of his productive career, in contrast to the misleading text. The second paragraph is just a rant in which the author expresses his contempt for mainstream economists. Notice in particular the tone, then consider the person who wrote this describes it as an attempt to "revert back to a fairer conclusion."

If this page cannot contain information which is both factually accurate and void of ideology, then it does more harm than good and should be removed.

Comment 2: The neoclassical side should explain how a theoretical model that is self-contraditory could be an instrument of simplicity in empirical work.

There's nothing to explain. The model is not self-contradictory it is just simplified - in a sense that there's a single good (or more generally assumes that the production technology is such that no reswitching occurs). Empirically there's problems with measuring "capital" but even then there's ways around it or approximations. Joan and Pierro made some serious and valid criticisms but the truth is that any multi-sector model is gonna be messy and the Leontief/Sraffa activity analysis approach has its own unrealistic assumptions. And I'm not the "neoclassical side", it just looks to me like someone is trying to squeeze more ideological juice from this debate then there is in it. And it's a good idea to sign your comments. radek

Is "capital controversy" really a standard name for it? I've never heard it called anything other than the "Cambridge capital controversy", but my reading on the subject is fairly limited. Still, whenever I hear it mentioned, Cambridge is always attached. -- Walt Pohl 20:43, 18 June 2006 (UTC)Reply

I agree that generally "Cambridge capital controversy" would be a better title since the article is about a specific argument. I guess one could write a general page about "capital controversies" or "capital theory" contrasting various definitions and approaches to capital, from Marx, to Austrians, to Sraffians to mainstream economists. But this one should definetly have "Cambridge" in the title. I'll wait for any replies and if there's no objections change it in a few days.radek 22:00, 18 June 2006 (UTC)Reply

I call it the "capital debates" but have also called it the "Two Cambridges Controversy".

I too know it as the Cambridge Capital Controversy.--Troyc001 19:16, 29 June 2006 (UTC)Reply

This place is essentially horrid (most maths and science pages excepted), but this is just a fantastic piece. It has style. —Preceding unsigned comment added by 202.89.169.22 (talk) 13:05, 17 January 2008 (UTC)Reply

Thank you for the article. One of the better ones I have ever read here in Wikipedia. --Uncertain (talk) 15:31, 16 April 2008 (UTC)Reply

I agree with what is already said, and I am an economics PhD student —Preceding unsigned comment added by 189.118.26.49 (talk) 01:34, 8 May 2009 (UTC)Reply

Some of the language in this article is unnecessarily one-sided in favor of Neo-Kaynesianism, such as this passage: "Most practically-minded neoclassical economists reacted to this problem by simply clinging to the simple model that they had inherited from Solow and Swan."

• Same goes for the language in the conclusion section. "Sweeping it under the rug", etc. 141.30.25.56 (talk) 09:53, 30 September 2009 (UTC)Reply

• The whole article could benefit from copy editing, including the language here, but in terms of the substantial point, this statement is simply true. [While I may simply be revealing myself to be what Bliss describes as a "true believer", the Cambridge controversy simply didn't have a great impact on the historical course of economic theory. One side basically "won" the argument, but then its members proceeded to die off, leaving the "losing side" to act as if the whole thing never happened. This is the significance of rather mischievous reference to "necrophilia".] Also on a pedantic point, this debate was conducted on both sides by "Keynesians", and modern day neo-Kenynesians (people like Stiglitz and Krugman), are the actually the followers of Solow etc. Those that follow Robinson are today known as post-Keynesians. Bighairything (talk) 12:04, 25 February 2009 (UTC)Reply

• No, the Cambridge side disappeared from history because 1) its proponents’ case depended on unrealistic assumptions, like everyone’s propensity to save being invariant to the profit rate (otherwise, as neoclassicals contend, an exogenous increase in the rate or profit would simply lead to an increase in saving and therefore supply of capital, driving the profit rate back down) and 2) relies on unrealistic assumptions about what determines the market price of capital goods; again, the neoclassical school is assuming competitive markets; given that, and the above point about saving/investing varying with the rate of profit, the market price for capital goods is ultimately dependent on demand for the final goods for which they are inputs. It is therefore the inability of the Cantabridgians to demonstrate practical implications of their critique of the neoclassical model that limits its relevance. Sraffa’s reliance on discredited ‘labor theory of value’ thinking on the valuation of capital doesn’t aid the relevance of his critique to modern economics either.SomeBiologist (talk) 01:43, 3 January 2019 (UTC)Reply

[1] of the lede because it's essentially original research. The "aggregation problem" is not particular to neo-classical economics but is present in any kind of "macro" theory. Different schools just circumvent it in different ways (neoclassicals by assuming rep. agent models, neo-Ricardians by fetishizing linear production models). The idea of representative agents is only superficially related to the ccc - the controversy took place way way before anyone anywhere was doing rep. agent models and the "US" Cambridge side was essentially defending their version of aggregate Keynesian models. That's anachronistically imposing some modern controversies - at best - on an old debate. Don't confuse an already confusing debate any more than it needs to be confusing. Volunteer Marek  07:47, 12 February 2011 (UTC)Reply

I don't see that this is anything other than the author's opinion:

"But despite ostensible efforts to separate normative from positive economics, the normative tone appears in many economic works anyway. This is especially true of the Chicago School of Economics, the so-called Austrian school, and similar "free market" thinkers." — Preceding unsigned comment added by Icantbelieveits (talk • contribs) 19:43, 1 October 2012 (UTC)Reply

this is a one-sided presentation of a technical problem with little or no relevance . the last paragraph is a biased account of the issue. There is a reason why phd students are not presented with the controversy: it is irrelevant to economics, and this is the point of view recongnized by 99% of the professions' scholars.

— Preceding unsigned comment added by 129.59.250.178 (talk) 16:16, 16 May 2017 (UTC)Reply

The article is not one-sided. Most economists are trained to be ignorant of the neoclassical side of the controversy. Thus, they have nothing effective to say, as the above comment demonstrates. 128.132.1.10 (talk) 13:18, 12 June 2017 (UTC) RLV.Reply

This article seems clearly biased and ignores the actual response of neoclassical economists (erroneously claiming that the latter simply ignore the Cambridge critique). It also ignores the assumptions of the Cambridge critique (which I mentioned in my other comment above) such as the invariance of saving/investment with respect to the rate of profit; assuming invariance of the market price of capital goods with respect to demand for finished goods for which they are inputs. Indeed, the very final quote by Burmeister (the author of the article say neoclassical economists usually ignore the Cambridge critique) is self-contradictory: it notes the specific changes Samuelson even made to his textbook in refining his models after the dispute; moreover, the shift away from ‘fixed saving’ models noted earlier in the article also flatly contradicts this conclusion. I've made some edits accordingly, including the final Burmeister quote, which is presented, incorrectly, as an objective summation of the debate.SomeBiologist (talk) —Preceding undated comment added 05:28, 3 January 2019 (UTC)Reply

I might as well mention that the above claims about the assumptions of the Cambridge critique are simply incorrect. 128.132.1.132 (talk) 17:36, 20 February 2023 (UTC)Reply

This page currently has mistaken ideas by Austrians. For all their pretense, they do not have a good response to the CCC. And some have found more commonality between Marx and Sraffa than is apparent in Steedman's 1970s book. For example, consider the work of Riccardo Bellofiore. 216.171.191.62 (talk) 12:39, 9 April 2024 (UTC)Reply