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What Remains of the Cambridge Critique? On Professor Schefold's Theses

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  • Petri, Fabio

    (University of Siena)

Abstract

Professor Bertram Schefold’s recent papers on capital theory and the Cambridge critique argue that the very low likelihood of reswitching and reverse capital deepening that appears to emerge from empirical input-output tables is confirmed by theoretical results; these results, he concludes, largely rehabilitate traditional neoclassical views on capital and show that the Sraffian critics’ insistence on reverse capital deepening as a fundamental criticism of neoclassical theory is misplaced. The present paper raises doubts about these arguments. In particular Professor Schefold does not give adequate consideration to the ‘supply-side’ problems with the measurability and the given endowment of the traditional notion of capital as a single factor. On the empirical evidence based on input-output tables, I agree with Professor Kurz that it suffers from very serious weaknesses. The more recent argument for an extremely low likelihood of double switching, advanced in Schefold (2016) and (2017), appears criticisable too.

Suggested Citation

  • Petri, Fabio, 2021. "What Remains of the Cambridge Critique? On Professor Schefold's Theses," Centro Sraffa Working Papers CSWP50, Centro di Ricerche e Documentazione "Piero Sraffa".
    • Handle: RePEc:ris:sraffa:0050
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    References listed on IDEAS

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    1. Robinson, Joan, 1971. "The Measure of Capital: The End of the Controversy," Economic Journal, Royal Economic Society, vol. 81(323), pages 597-602, September.
    2. Zonghie Han & Bertram Schefold, 2006. "An empirical investigation of paradoxes: reswitching and reverse capital deepening in capital theory," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 30(5), pages 737-765, September.
    3. Fabio Petri, 2015. "On Some Modern Reformulations of the Labour Theory of Value," Contributions to Political Economy, Cambridge Political Economy Society, vol. 34(1), pages 77-104.
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    9. Fabio Petri, 2015. "Neglected Implications of Neoclassical Capital-Labour Substitution for Investment Theory: Another Criticism of Say's Law," Review of Political Economy, Taylor & Francis Journals, vol. 27(3), pages 308-340, July.
    10. Pierangelo Garegnani, 2024. "Heterogeneous Capital, the Production Function and the Theory of Distribution," Springer Studies in the History of Economic Thought, in: Roberto Ciccone (ed.), Capital Theory, the Surplus Approach, and Effective Demand, pages 147-193, Springer.
    11. Fabio Petri, 2017. "The Passage of Time, Capital, and Investment in Traditional and in Recent Neoclassical Value Theory," Department of Economics University of Siena 750, Department of Economics, University of Siena.
    12. Heinz D. Kurz, 2020. "The theory of value and distribution and the problem of capital," European Journal of Economics and Economic Policies: Intervention, Edward Elgar Publishing, vol. 17(2), pages 241-264, September.
    13. Bertram Schefold, 2020. "What remains of the Cambridge critique of capital theory, if reswitching and reverse capital deepening are empirically rare and theoretically unlikely?," European Journal of Economics and Economic Policies: Intervention, Edward Elgar Publishing, vol. 17(2), pages 220-240, September.
    14. Fabio Petri, 2004. "General Equilibrium, Capital and Macroeconomics," Books, Edward Elgar Publishing, number 3438.
    15. Krishna Bharadwaj, 1970. "On the Maximum Number of Switches Between Two Production Systems," Swiss Journal of Economics and Statistics (SJES), Swiss Society of Economics and Statistics (SSES), vol. 106(IV), pages 409-429, December.
    16. Ariel Dvoskin & Fabio Petri, 2017. "Again on the Relevance of Reverse Capital Deepening and Reswitching," Metroeconomica, Wiley Blackwell, vol. 68(4), pages 625-659, November.
    17. Anwar Shaikh & José Alejandro Coronado & Luiza Nassif-Pires, 2020. "On the empirical regularities of Sraffa prices," European Journal of Economics and Economic Policies: Intervention, Edward Elgar Publishing, vol. 17(2), pages 265-275, September.
    18. Pierangelo Garegnani, 2024. "Notes on Consumption, Investment and Effective Demand: I," Springer Studies in the History of Economic Thought, in: Roberto Ciccone (ed.), Capital Theory, the Surplus Approach, and Effective Demand, pages 387-409, Springer.
    19. J. R. Hicks, 1963. "The Theory of Wages," Palgrave Macmillan Books, Palgrave Macmillan, number 978-1-349-00189-7, October.
    20. Kersting, Götz & Schefold, Bertram, 2020. "Best Techniques Leave Little Room for Substitution. A New Critique of the Production Function," Centro Sraffa Working Papers CSWP47, Centro di Ricerche e Documentazione "Piero Sraffa", revised 22 Dec 2020.
    21. Paul A. Samuelson, 1962. "Parable and Realism in Capital Theory: The Surrogate Production Function," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 29(3), pages 193-206.
    22. Schefold, Bertram, 2016. "Marx, the Production Function and the Old Neoclassical Equilibrium: Workable under the Same Assumptions? With an Appendix on the Likelihood of Reswitching and of Wicksell Effects," Centro Sraffa Working Papers CSWP19, Centro di Ricerche e Documentazione "Piero Sraffa".
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    Cited by:

    1. Schefold, Bertram, 2023. "The rarity of reswitching explained," Structural Change and Economic Dynamics, Elsevier, vol. 67(C), pages 128-150.
    2. Tsoulfidis, Lefteris, 2021. "Capital Theory Debates: New Developments and Direction," Centro Sraffa Working Papers CSWP51, Centro di Ricerche e Documentazione "Piero Sraffa".
    3. Jacobo Ferrer-Hernández & Luis Daniel Torres-González, 2021. "Eigenvalues and Eigenlabors: On Iliadi’s, Mariolis’, Soklis’, and Tsoulfidis’ Explanation of the Empirical Regularities in Price Curves," Working Papers 2119, New School for Social Research, Department of Economics.

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    More about this item

    Keywords

    capital theory; Cambridge critique; random matrices; aggregate production function;
    All these keywords.

    JEL classification:

    • B13 - Schools of Economic Thought and Methodology - - History of Economic Thought through 1925 - - - Neoclassical through 1925 (Austrian, Marshallian, Walrasian, Wicksellian)
    • B51 - Schools of Economic Thought and Methodology - - Current Heterodox Approaches - - - Socialist; Marxian; Sraffian
    • E25 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Aggregate Factor Income Distribution

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