What is this thing called ‘capital’?

28 May, 2015 at 15:10 | Posted in Economics | 2 Comments


It is important, for the record, to recognize that key participants in the debate openly admitted their mistakes. Samuelson’s seventh edition of Economics was purged of errors. Levhari and Samuelson published a paper which began, ‘We wish to make it clear for the record that the nonreswitching theorem associated with us is definitely false’ … Leland Yeager and I jointly published a note acknowledging his earlier error and attempting to resolve the conflict between our theoretical perspectives … burmeisterHowever, the damage had been done, and Cambridge, UK, ‘declared victory’: Levhari was wrong, Samuelson was wrong, Solow was wrong, MIT was wrong and therefore neoclassical economics was wrong. As a result there are some groups of economists who have abandoned neoclassical economics for their own refinements of classical economics. In the United States, on the other hand, mainstream economics goes on as if the controversy had never occurred. Macroeconomics textbooks discuss ‘capital’ as if it were a well-defined concept — which it is not, except in a very special one-capital-good world (or under other unrealistically restrictive conditions). The problems of heterogeneous capital goods have also been ignored in the ‘rational expectations revolution’ and in virtually all econometric work.

Edwin Burmeister

Highly recommended reading for Paul Romer and other ‘busy’ economists …


  1. Refining classical economics is not any better than Neoclassical economics. It’s as if biologists fell into two camps: Genesis is literally true and Intelligent Design.


    Click to access arestis972.pdf

    Essays in Honour of Geoff Harcourt Volume One

    Edited by Philip Arestis, Gabriel Palma and Malcolm Sawyer
    First published 1997 by Routledge 11 New Fetter Lane, London EC4P 4EE
    This edition published in the Taylor & Francis e-Library, 2005.


    Heinz W.Arndt, Australian National University, Canberra, Australia

    Mauro Baranzini, Centro di Studi Bancari, Vezia-Lugano, Italy

    William J.Baumol, New York University, United States of America

    Christopher Bliss, University of Oxford, England

    Heinrich Bortis, Université de Fribourg, Switzerland

    A.W.Bob Coats, University of Nottingham, England

    Avi J.Cohen, York University, Toronto, Canada

    Bernard Corry, Queen Mary and Westfield College, University of London, England

    Lilia Costabile, Universita degli Studi di Napoli Federico II, Italy

    Paul Dalziel, Lincoln University, New Zealand

    William Darity, Jr, University of North Carolina, Chapel Hill, United States of America

    Paul Davidson, University of Tennessee, Knoxville, United States of America

    John B.Davis, Marquette University, Milwaukee, United States of America

    Phyllis Deane, University of Cambridge, England

    Robert Dixon, University of Melbourne, Australia

    Sheila C.Dow, University of Stirling, Scotland

    Helmar Drost, York University, Toronto, Canada

    John Eatwell, New School, New York, United States of America

    Christopher A.Gregory, Australian National University, Australia

    Peter Groenewegen, University of Sydney, Australia

    Harald Hagemann, Universität Hohenheim, Stuttgart, Germany

    Omar F.Hamouda, Massachusetts Institute of Technology, United States of America

    John Hatch, University of Adelaide, Australia

    Geoffrey M.Hodgson, University of Cambridge, England

    Hans E.Jensen, University of Tennessee, Knoxville, United States of America

    John E.King, La Trobe University, Australia

    Heinz D.Kurz, Institut für Volkswirtschaftspolitik, Graz, Austria

    Michael S.Lawlor, Wake Forest University, Winston-Salem, North Carolina, United
    States of America

    Andrea Maneschi, Vanderbilt University, Nashville, United States of America

    Maria Cristina Marcuzzo, Università di Roma, ‘La Sapienza’, Italy

    Luigi L.Pasinetti, Università Cattolica Sacro Cuore, Milan, Italy

    Mark Perlman, University of Pittsburgh, United States of America

    Ray Petrides, Murdoch University, Australia

    Stephen Pratten, University of Cambridge, England

    Colin Rogers, University of Adelaide, Australia

    Alessandro Roncaglia, Università di Roma, ‘La Sapienza’, Italy

    Robert Rowthorn, University of Cambridge, England

    Thomas K.Rymes, Carlton University, Ottawa, Canada

    Neri Salvadori, Università di Pisa, Italy

    Paul A.Samuelson, Massachussetts Institute of Technology, Cambridge, United States of America

    Roberto Scazzieri, Università degli Studi, Bologna, Italy

    Robert M.Solow, Massachussetts Institute of Technology, Cambridge, United States of America

    John K.Whitaker, University of Virginia, Charlottesville, United States of America

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