Monday, April 24, 2006

Current Contributions Concerning Cambridge Capital Controversies

I think the vision underlying the neoclassical theory of value and distribution has been shown to be invalid. The Cambridge Capital Controversy and related matters provides one line of argument establishing this result. I think of Franklin Fisher's simulation results, Anwar Shaikh's humbug production function, Herbert Simon's "Nobel" prize acceptance speech, and so on as concerning one of these related matters.

Last summer, the Eastern Economic Journal (V. 31, N. 5, Summer) sponsored a symposium on this topic, consisting of the following papers:

  • Pressman, Steven (2005). "What is Wrong with the Aggregate Production Function?": 422-425.
  • Felipe, Jesus and F. Gerard Adams (2005). "'A Theory of Production': The Estimation of the Cobb-Douglas Function: A Retrospective View": 427-445.
  • Shaikh, Anwar (2005). "Nonlinear Dynamics and Pseudo-Production Functions": 447-466.
  • Felipe, Jesus and J. S. L. McCombie (2005). "How Sound Are The Foundations of the Aggregate Production Function?": 467-488.
  • Fisher, Franklin M. (2005). "Aggregate Production Functions - A Pervasive, But Unpersuasive, Fairytale": 489-491.

Shaikh's contribution builds on the work of Richard Goodwin, an economist too great for Harvard to accept.

Fisher is amusing:
"In the hit play, Proof, there is a description of a rock band made up of mathematicians. They play a number called 'i' in which they just stand around the stage for some minutes doing nothing. That is because i is an imaginary number. In the same spirit, I am tempted to conclude any discussion of aggregate production functions now. Indeed, it is truly amazing that, after so many years, we should be having a symposium on aggregate production functions; for, perhaps even more than the square root of negative one, aggregate production functions are truly imaginary.

Nevertheless, economists go on behaving as if there were no problem here, and even some of those most firmly opposed to the existence of aggregate production functions (not the participants in this symposium), implicitly base their criticism of neoclassical economics on the violation of insights whose validity rests on the existence of aggregate production functions. Hence a symposium on this imaginary topic is not only required, but is all too likely to be ignored."

"...I am informed (by Jesus Felipe) that attempts to explain the impossibility of using aggregate production functions in practice are often met with great hostility, even outright anger. To that I say (as I have before in a different area of debunking...), that the moral is: 'Don't interfere with fairytales if you want to live happily ever after.'"

No comments: