IDEAS home Printed from https://ideas.repec.org/a/taf/eujhet/v13y2006i1p141-161.html
   My bibliography  Save this article

The Kaldor/Knight controversy: Is capital a distinct and quantifiable factor of production?

Author

Listed:
  • Avi Cohen

Abstract

Controversy focuses on three questions: Is capital a distinct factor of production? Is capital quantifiable in a theoretically consistent manner? Are process stories necessary around convergence to, or changes in, equilibrium interest rates? To all, Kaldor answers 'yes' to Knight's 'no'. The controversy is historically important in: 1) shifting issues in recurring twentieth century capital theory controversies from periods of production to production functions, from roundaboutness to diminishing returns; 2) revealing Knight's position on increasing knowledge offsetting diminishing returns over time as an unacknowledged 'precursor' of new growth theory; 3) marking the turning point for Kaldor's attachment to Austrian theory.

Suggested Citation

  • Avi Cohen, 2006. "The Kaldor/Knight controversy: Is capital a distinct and quantifiable factor of production?," The European Journal of the History of Economic Thought, Taylor & Francis Journals, vol. 13(1), pages 141-161.
    • Handle: RePEc:taf:eujhet:v:13:y:2006:i:1:p:141-161
    DOI: 10.1080/09672560500522801
    as

    Download full text from publisher

    File URL: http://www.tandfonline.com/doi/abs/10.1080/09672560500522801
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/09672560500522801?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Romer, Paul M, 1986. "Increasing Returns and Long-run Growth," Journal of Political Economy, University of Chicago Press, vol. 94(5), pages 1002-1037, October.
    2. Hayek, F. A. & Caldwell, Bruce, 2007. "The Pure Theory of Capital," University of Chicago Press Economics Books, University of Chicago Press, number 9780226320991 edited by White, Lawrence H., December.
    3. repec:bla:econom:v:70:y:2003:i:277:p:143-158 is not listed on IDEAS
    4. D. G. Champernowne & R. F. Kahn, 1953. "The Value of Invested Capital," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 21(2), pages 107-111.
    5. Laurence S. Moss & Karen I. Vaughn, 1986. "Hayek's Ricardo Effect: A Second Look," History of Political Economy, Duke University Press, vol. 18(4), pages 545-565, Winter.
    6. Young, Allyn A., 1928. "Increasing Returns and Economic Progress," History of Economic Thought Articles, McMaster University Archive for the History of Economic Thought, vol. 38, pages 527-542.
    7. F. H. Knight, 1924. "Some Fallacies in the Interpretation of Social Cost," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 38(4), pages 582-606.
    8. repec:ucp:bkecon:9780226320625 is not listed on IDEAS
    9. P. A. Samuelson, 1991. "A Sweeping New Non-substitution Theorem: Kaldor’s Discovery of the von Neumann Input-Output Model," Palgrave Macmillan Books, in: Edward J. Nell & Willi Semmler (ed.), Nicholas Kaldor and Mainstream Economics, chapter 4, pages 72-87, Palgrave Macmillan.
    10. Avi J. Cohen, 2003. "The Hayek/Knight Capital Controversy: The Irrelevance of Roundaboutness, or Purging Processes in Time?," History of Political Economy, Duke University Press, vol. 35(3), pages 469-490, Fall.
    11. Harald Hagemann & Hans-Michael Trautwein, 1998. "Cantillon and Ricardo effects: Hayek's contributions to business cycle theory," The European Journal of the History of Economic Thought, Taylor & Francis Journals, vol. 5(2), pages 292-316.
    12. Lucas, Robert Jr., 1988. "On the mechanics of economic development," Journal of Monetary Economics, Elsevier, vol. 22(1), pages 3-42, July.
    13. Blaug,Mark, 1997. "Economic Theory in Retrospect," Cambridge Books, Cambridge University Press, number 9780521577014, January.
    14. Bliss, C. J., 1975. "Capital Theory and the Distribution of Income," Elsevier Monographs, Elsevier, edition 1, number 9780720436044 edited by Bliss, C. J..
    15. Harcourt,G. C., 2022. "Some Cambridge Controversies in the Theory of Capital," Cambridge Books, Cambridge University Press, number 9781009158152, September.
    16. Ross B. Emmett, 2010. "Frank H. Knight," Chapters, in: Ross B. Emmett (ed.), The Elgar Companion to the Chicago School of Economics, chapter 6, Edward Elgar Publishing.
    17. A. Cohen & G. Harcourt., 2009. "Whatever Happened to the Cambridge Capital Theory Controversies?," VOPROSY ECONOMIKI, N.P. Redaktsiya zhurnala "Voprosy Economiki", vol. 8.
    18. Kaldor, Nicholas, 1972. "The Irrelevance of Equilibrium Economics," Economic Journal, Royal Economic Society, vol. 82(328), pages 1237-1255, December.
    19. Hayek, F. A., 1997. "Socialism and War," University of Chicago Press Economics Books, University of Chicago Press, edition 1, number 9780226320588 edited by Caldwell, Bruce, December.
    20. repec:bla:econom:v:46:y:1979:i:181:p:1-10 is not listed on IDEAS
    21. Peter Boettke & Karen Vaughn, 2002. "Knight and the Austrians on Capital, and the Problem of Socialism," History of Political Economy, Duke University Press, vol. 34(1), pages 155-176, Spring.
    22. Targetti, Ferdinando, 1992. "Nicholas Kaldor: The Economics and Politics of Capitalism as a Dynamic System," OUP Catalogue, Oxford University Press, number 9780198283485.
    23. Wilfredo Santiago Valiente, 1980. "Is Frank Knight the Victor in the Controversy Between the two Cambridges?," History of Political Economy, Duke University Press, vol. 12(1), pages 41-64, Spring.
    24. Frank H. Knight, 1931. "Professor Fisher's Interest Theory: A Case in Point," Journal of Political Economy, University of Chicago Press, vol. 39(2), pages 176-176.
    25. Syed Ahmad, 1991. "Capital in Economic Theory," Books, Edward Elgar Publishing, number 5.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Henrik Egbert & Teodor Sedlarski & Aleksandar B. Todorov, 2021. "Foundations of contemporary economics: Frank H. Knight on uncertainty, capital theory, and the beginnings of the Chicago school," Economic Thought journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 6, pages 74-90.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Jesus Felipe & John S.L. McCombie, 2013. "The Aggregate Production Function and the Measurement of Technical Change," Books, Edward Elgar Publishing, number 1975.
    2. Giulio Guarini & Vasco Molini & Roberta Rabellotti, 2006. "Is Korea Catching Up? An Analysis of the Labour Productivity Growth in South Korea," Oxford Development Studies, Taylor & Francis Journals, vol. 34(3), pages 323-339.
    3. Frédéric Lordon, 1991. "Théorie de la croissance : quelques développements récents [Deuxième partie : la redécouverte des rendements croissants]," Revue de l'OFCE, Programme National Persée, vol. 37(1), pages 191-243.
    4. Lacoude Philippe, 1995. "Une Critique des Theories de la Croissance Endogene," Journal des Economistes et des Etudes Humaines, De Gruyter, vol. 6(4), pages 581-620, December.
    5. Daniels, Peter L., 1996. "Technology investment and growth in economic welfare," World Development, Elsevier, vol. 24(7), pages 1243-1266, July.
    6. M. Centorrino & F. Ofria, 2008. "Organized crime and labour productivity in the Mezzogiorno: an application of the "Kaldor-Verdoorn" model," Rivista economica del Mezzogiorno, Società editrice il Mulino, issue 1, pages 163-188.
    7. Ramesh Chandra & Roger Sandilands, 2006. "The role of pecuniary external economies and economies of scale in the theory of increasing returns," Review of Political Economy, Taylor & Francis Journals, vol. 18(2), pages 193-208.
    8. Christos N. Pitelis, 2011. "Foreign Direct Investment and Economic Integration," Chapters, in: Miroslav N. Jovanović (ed.), International Handbook on the Economics of Integration, Volume III, chapter 1, Edward Elgar Publishing.
    9. David Simpson, 2013. "The Rediscovery of Classical Economics," Books, Edward Elgar Publishing, number 15080.
    10. John E. King, 2010. "Kaldor and the Kaldorians," Chapters, in: Mark Setterfield (ed.), Handbook of Alternative Theories of Economic Growth, chapter 7, Edward Elgar Publishing.
    11. repec:dau:papers:123456789/6516 is not listed on IDEAS
    12. Christos N. Pitelis, 2009. "The Sustainable Competitive Advantage and Catching-up of Nations: FDI, Clusters and the Liability (Asset) of Smallness," Management International Review, Springer, vol. 49(1), pages 95-120, February.
    13. Wilson, E.J. & Chaudhri, D.P., 2000. "Endogeneity, Knowledge and Dynamics of Long Run Capitalist Economic Growth," Economics Working Papers wp00-03, School of Economics, University of Wollongong, NSW, Australia.
    14. repec:hal:spmain:info:hdl:2441/4cufqrm9749dbol0m0bsfeopka is not listed on IDEAS
    15. Jeon, Heesang, 2015. "Knowledge and Contemporary Capitalism in Light of Marx's Value Theory," Thesis Commons g5njk, Center for Open Science.
    16. repec:ebl:ecbull:v:2:y:2002:i:1:p:1-15 is not listed on IDEAS
    17. Christopher B. Barrett, 2005. "Rural poverty dynamics: development policy implications," Agricultural Economics, International Association of Agricultural Economists, vol. 32(s1), pages 45-60, January.
    18. repec:dgr:rugccs:200301 is not listed on IDEAS
    19. Ben Fine, 1998. "Endogenous Growth Theory: A Critical Assessment," Working Papers 80, Department of Economics, SOAS University of London, UK.
    20. repec:spo:wpmain:info:hdl:2441/4cufqrm9749dbol0m0bsfeopka is not listed on IDEAS
    21. Michael Peneder & Karl Aiginger & Gernot Hutschenreiter & Markus Marterbauer, 2001. "Structural Change and Economic Growth," WIFO Studies, WIFO, number 20668.
    22. Bibhuti Ranjan Mishra, 2020. "Role of External and Domestic Demand in Economic Growth: A Study of BRICS Countries," Global Business Review, International Management Institute, vol. 21(2), pages 547-566, April.
    23. Ronny Correa-Quezada & José Álvarez-García & María De la Cruz Del Río-Rama & Claudia Patricia Maldonado-Erazo, 2018. "Role of Creative Industries as a Regional Growth Factor," Sustainability, MDPI, vol. 10(5), pages 1-14, May.
    24. Pascal Petit & Luc Soete, 2002. "Is a Biased Technological Change Fuelling Dualism?," Chapters, in: Mark Setterfield (ed.), The Economics of Demand-Led Growth, chapter 15, Edward Elgar Publishing.
    25. Guillaume Daudin, 2006. "Paying Transaction Costs," Documents de Travail de l'OFCE 2006-14, Observatoire Francais des Conjonctures Economiques (OFCE).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:taf:eujhet:v:13:y:2006:i:1:p:141-161. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/REJH20 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.