Still more on why we should bury the Marginal Productivity Theory of the Price of Capital: A Supplementary Note
The purpose of this note is to supplement the authorâ€™s earlier remarks on the unsatisfactory nature of the neoclassical account of how the return on capital is determined. (See Strathclyde Discussion Paper 12-03: â€œThe Marginal Productivity Theory of the Price of Capital: An Historical Perspective on the Origins of the Codswallopâ€). The point is made via a simple illustration that certain matters which are problematical in neoclassical terms are perfectly straightforward when viewed from a classical perspective. Basically, the marginalist model of the nature of an economic system is not fit for purpose in that it fails to comprehend the essential features of a surplus-producing economic system as distinct from one merely of exchange.
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- Grieve, Roy, 2012. "The Marginal Productivity Theory Of The Price Of Capital: An Historical Perspective On The Origins Of The Codswallop," SIRE Discussion Papers 2012-05, Scottish Institute for Research in Economics (SIRE).
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