Roger Backhouse remarks in “MIT and the Other Cambridge” (History of Political Economy 46, supplement) that the capital theory controversy came to be seen by most of the economics profession as a waste of time. Joan Robinson's 1953 paper “The Production Function and the Theory of Capital” started the controversy. An abbreviated version, published in the second volume of her Collected Economic Papers, made clear that her critique came in two parts. The “constructive” part drew attention to the phenomena of reverse capital deepening and re-switching of techniques and attracted the interest of theorists at MIT and elsewhere. The “negative” part concerned the problem of getting into equilibrium and was, for Robinson, the essence of the controversy. A close reading of the literature shows not only that Robinson was never credited with an understanding of the Achilles' heel that plagues dynamic general equilibrium models, but also that the problem, though variously recognized, was essentially ignored. The suggestion that the capital theory controversy was a waste of time fails to recognize that Robinson had drawn attention to a fundamental unsolved problem in economic theory.

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