In the late 1950s and early 1960s MIT economists, led by Paul Samuelson and Robert Solow, became involved in a long controversy with economists in Cambridge, England, led by Joan Robinson, Luigi Pasinetti, and Nicholas Kaldor, over the theory of capital. This article looks at that controversy from the perspective of MIT, trying to establish why Samuelson and Solow became so involved. It is argued that Robinson was challenging propositions about linear models and their relationship to models with smooth substitution, on which they had been working, in Samuelson’s case, since the 1940s. The article then turns a by-product of the controversy—the model of short-run disequilibrium by Solow and Joseph Stiglitz—arguing that this marked a turning point in macroeconomics at MIT. Throughout it is argued that the close personal contacts between MIT economists and their Cambridge counterparts are important to understand how the debate evolved.

This content is only available as a PDF.
You do not currently have access to this content.