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 that relied on the notion of capital as a single quantity. Subsequently, however, when the implications of those phenomena took centre stage in the controversy, together with the reformulations of the theory which intended to do away with the ‘quantity of capital’, several misunderstandings prevented, I shall contend, decisive progress in the analysis and we entered an inconclusive phase of the discussion.

This article was originally published in the Cambridge Journal of Economics (2012, 36, pp. 1417’32). We thank the Cambridge Political Economy Society and the Oxford University Press for permission to reprint it (with changes and corrections).

Pierangelo Garegnani died on IS October 2011, while he was still revising the present paper. This had been accepted in principle by the Cambridge Journal of Economics and returned to the author with a few requests for clarification by the referees. Using the drafts he left, two of his closest colleagues (R. Ciccone and S. Levrero) have been able to transfer some of the amendments and changes he was making to the version as published here. Therefore, the form in which the paper appears, though quite definitive, may not be taken as the author’s own final version.