Cambridge Capital Controversy: Some Old-Fashioned Questions Reconsidered

Cambridge Capital Controversy (1950s–1970s) was a debate between Cambridge, UK, and Cambridge, MIT, USA, representative of two differing conceptions of production and distribution – a division in economic thought that rendered visible the unresolved tensions in capital theory. Despite the substantive results obtained in its development, the high mathematical abstraction and the strong theoretical oppositions presented in the debate hindered systematic assessment. This paper narrows this gap by reconstructing the historical and theoretical context of Joan Robinson's (1953) seminal contribution and analyzing the social dynamics of the Golden Age of Capitalism, particularly through the lens of American critical economists (Paul A. Baran, Paul M. Sweezy, John Kenneth Galbraith), whose connection to the post-Keynesian economists is explained. Theoretically, we argue that Cambridge, UK, missed an opportunity to formalize multiple equilibria – a notion made explicit in Pierangelo Garegnani (1970) and not pursued further out of concern for the stability of equilibrium, but that was later developed in the field of Search Theory (1980s–1990s). Finally, we critique scarcity –a foundational concept in marginalist economics– by reassessing the notion through formal logic to challenge the universality and the applicability of this postulate. The present analysis aims to begin to clarify some unresolved tensions in the Cambridge Capital Controversy, as well as to shed light on its contemporary relevance for economic thought and economic theory.