IDEAS home Printed from https://ideas.repec.org/a/taf/eujhet/v23y2016i6p1032-1058.html
   My bibliography  Save this article

On the Samuelson–Etula Master Function and the capital controversy

Author

Listed:
  • Ariel Dvoskin
  • Saverio M. Fratini

Abstract

The paper addresses the ambiguity that surrounds the conception of capital and its role in neoclassical price-and-distribution theory. The difficulties encountered in the various attempts to define the marginal product either of capital or of a capital good are recalled and the conclusion is drawn that neither concept appears theoretically sound. This historical reconstruction is combined with critical discussion of the recent attempt by Paul Samuelson to determine income distribution by means of the “Master Function”, a device previously developed and presented by Samuelson himself with Erkko Etula, and its “non-neoclassical” marginal products. Rather than the existence of a continuum of alternative technical possibilities, this construction assumes the simultaneous use of a discrete number of methods of production for the same commodity. Even though each technique employs the inputs in fixed proportions, the coexistence of various techniques permits the full employment of an arbitrarily given vector of input endowments. As is shown here, however, the coexistence of methods required for the differentiability of the Master Function can take place, if heterogenous capital goods are used in production, neither in the case with stationary relative prices nor in the non-stationary Arrow–Debreu framework.

Suggested Citation

  • Ariel Dvoskin & Saverio M. Fratini, 2016. "On the Samuelson–Etula Master Function and the capital controversy," The European Journal of the History of Economic Thought, Taylor & Francis Journals, vol. 23(6), pages 1032-1058, November.
  • Handle: RePEc:taf:eujhet:v:23:y:2016:i:6:p:1032-1058
    DOI: 10.1080/09672567.2016.1186920
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1080/09672567.2016.1186920
    Download Restriction: Access to full text is restricted to subscribers.
    ---><---

    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. Paolo Trabucchi, 2011. "Capital as a Single Magnitude and the Orthodox Theory of Distribution in Some Writings of the Early 1930s," Review of Political Economy, Taylor & Francis Journals, vol. 23(2), pages 169-188, April.
    2. Pasinetti, Luigi L, 1969. "Switches of Technique and the "Rate of Return" in Capital Theory," Economic Journal, Royal Economic Society, vol. 79(315), pages 508-531, September.
    3. Paul A. Samuelson, 1959. "A Modern Treatment of the Ricardian Economy: I. The Pricing of Goods and of Labor and Land Services," The Quarterly Journal of Economics, Oxford University Press, vol. 73(1), pages 1-35.
    4. Stefano Zambelli, 2004. "The 40% neoclassical aggregate theory of production," Cambridge Journal of Economics, Oxford University Press, vol. 28(1), pages 99-120, January.
    5. Samuelson, Paul A. & Etula, Erkko M., 2006. "Complete work-up of the one-sector scalar-capital theory of interest rate: Third installment auditing Sraffa's never-completed "Critique of Modern Economic Theory"," Japan and the World Economy, Elsevier, vol. 18(3), pages 331-356, August.
    6. Kurz,Heinz D. & Salvadori,Neri, 1997. "Theory of Production," Cambridge Books, Cambridge University Press, number 9780521588676.
    7. Pierangelo Garegnani, 2007. "Samuelson's misses: A rejoinder," The European Journal of the History of Economic Thought, Taylor & Francis Journals, vol. 14(3), pages 573-585.
    8. Saverio M. Fratini, 2013. "Real W icksell Effect, Demand for Capital and Stability," Metroeconomica, Wiley Blackwell, vol. 64(2), pages 346-360, May.
    9. Hahn, F H, 1975. "Revival of Political Economy: The Wrong Issues and the Wrong Argument," The Economic Record, The Economic Society of Australia, vol. 51(135), pages 360-364, September.
    10. Luigi L. Pasinetti, 1960. "A Mathematical Formulation of the Ricardian System," Review of Economic Studies, Oxford University Press, vol. 27(2), pages 78-98.
    11. Paul A. Samuelson, 2007. "Classical and Neoclassical harmonies and dissonances," The European Journal of the History of Economic Thought, Taylor & Francis Journals, vol. 14(2), pages 243-271.
    12. Tatsuo Hatta, 1976. "The Paradox in Capital Theory and Complementarity of Inputs," Review of Economic Studies, Oxford University Press, vol. 43(1), pages 127-142.
    13. Paul A. Samuelson, 1962. "Parable and Realism in Capital Theory: The Surrogate Production Function," Review of Economic Studies, Oxford University Press, vol. 29(3), pages 193-206.
    14. Fratini, Saverio M., 2012. "Malinvaud on Wicksell’s legacy to capital theory: some critical remarks," MPRA Paper 39574, University Library of Munich, Germany.
    15. Saverio M. Fratini, 2007. "Reswitching of Techniques in an Intertemporal Equilibrium Model with Overlapping Generations," Contributions to Political Economy, Oxford University Press, vol. 26(1), pages 43-59.
    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. Enrico Bellino & Christian Bidard & Saverio M. Fratini & G.C. Harcourt & Arrigo Opocher & Ian Steedman & Naoki Yoshihara & Heinz D. Kurz, 2017. "Symposium on Arrigo Opocher and Ian Steedman (," Metroeconomica, Wiley Blackwell, vol. 68(4), pages 586-624, November.
    2. Ariel Dvoskin & Germán David Feldman & Guido Ianni, 2020. "New‐structuralist exchange‐rate policy and the pattern of specialization in Latin American countries," Metroeconomica, Wiley Blackwell, vol. 71(1), pages 22-48, February.
    3. Saverio M. Fratini, 2019. "Neoclassical theories of stationary relative prices and the supply of capital," Metroeconomica, Wiley Blackwell, vol. 70(4), pages 723-737, November.

    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. Dvoskin, Ariel & Fratini, Saverio M., 2015. "On the Samuelson-Etula Master Function and Marginal Productivity: some old and new critical remarks," MPRA Paper 63415, University Library of Munich, Germany.
    2. Saverio M. Fratini, 2019. "Neoclassical theories of stationary relative prices and the supply of capital," Metroeconomica, Wiley Blackwell, vol. 70(4), pages 723-737, November.
    3. Saverio M. Fratini, 2019. "On The Second Stage Of The Cambridge Capital Controversy," Journal of Economic Surveys, Wiley Blackwell, vol. 33(4), pages 1073-1093, September.
    4. Ajit Sinha, 2015. "A Reflection on the Samuelson-Garegnani Debate," Economic Thought, World Economics Association, vol. 4(2), pages 1-48, September.
    5. Luigi L. Pasinetti, 2000. "Critique of the neoclassical theory of growth and distribution," BNL Quarterly Review, Banca Nazionale del Lavoro, vol. 53(215), pages 383-431.
    6. Saverio M. Fratini, 2010. "Reswitching And Decreasing Demand For Capital," Metroeconomica, Wiley Blackwell, vol. 61(4), pages 676-682, November.
    7. Nadia Garbellini, 2018. "Inequality in the 21st Century:A Critical Analysis of Piketty`s Work," Working Papers Series 69, Institute for New Economic Thinking.
    8. D'Alessandro, Simone & Salvadori, Neri, 2008. "Pasinetti versus Rebelo: Two different models or just one?," Journal of Economic Behavior & Organization, Elsevier, vol. 65(3-4), pages 547-554, March.
    9. Saverio M. Fratini, 2015. "A Note on Reswitching and Intertemporal Prices," Review of Political Economy, Taylor & Francis Journals, vol. 27(4), pages 666-678, October.
    10. Jesus Felipe & John S.L. McCombie, 2013. "The Aggregate Production Function and the Measurement of Technical Change," Books, Edward Elgar Publishing, number 1975.
    11. Saverio M. Fratini, 2009. "Reswitching and Decreasing Demand for Capital in a Model with a Continuum of Linear Techniques," EERI Research Paper Series EERI_RP_2009_26, Economics and Econometrics Research Institute (EERI), Brussels.
    12. Wei-Bin Zhang, 2015. "The Dynamics of Wealth, Environment and Land Value in a Three-Sector Growth Model," South-Eastern Europe Journal of Economics, Association of Economic Universities of South and Eastern Europe and the Black Sea Region, vol. 13(2), pages 197-228.
    13. Zambelli, Stefano & Fredholm, Thomas & Venkatachalam, Ragupathy, 2017. "Robust measurement of national technological progress," Structural Change and Economic Dynamics, Elsevier, vol. 42(C), pages 38-55.
    14. Anwar Shaikh, 2012. "Rethinking Microeconomics: A Proposed Reconstruction," Working Papers 1206, New School for Social Research, Department of Economics.
    15. Wei Bin ZHANG, 2016. "Oscillations In The Walrasian General Equilibrium Theory With Endogenous Wealth And Human Capital Accumulation," EcoForum, "Stefan cel Mare" University of Suceava, Romania, Faculty of Economics and Public Administration - Economy, Business Administration and Tourism Department., vol. 5(1), pages 1-41, January.
    16. G. C. Harcourt, 2015. "On the Cambridge, England, Critique of the Marginal Productivity Theory of Distribution," Review of Radical Political Economics, Union for Radical Political Economics, vol. 47(2), pages 243-255, June.
    17. Nadeem Naqvi, 2011. "Demystifying Sraffa’s Theory of Value in the Light of Arrow and Debreu," MAGKS Papers on Economics 201150, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).
    18. Enrico Bellino & Christian Bidard & Saverio M. Fratini & G.C. Harcourt & Arrigo Opocher & Ian Steedman & Naoki Yoshihara & Heinz D. Kurz, 2017. "Symposium on Arrigo Opocher and Ian Steedman (," Metroeconomica, Wiley Blackwell, vol. 68(4), pages 586-624, November.
    19. Freni, Giuseppe, 2016. "Back to the Sixties: A Note on Multi-Primary-Factor Linear Models with Homogeneous Capital," MPRA Paper 73677, University Library of Munich, Germany.
    20. Thomas Michl, 1999. "Biased Technical Change and the Aggregate Production Function," International Review of Applied Economics, Taylor & Francis Journals, vol. 13(2), pages 193-206.

    More about this item

    Statistics

    Access and download statistics

    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:23:y:2016:i:6:p:1032-1058. See general information about how to correct material in RePEc.

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

    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 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.

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

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.