Friday, April 25, 2014

David F. Ruccio — Capital controversy

David Ruccio calls out Paul Krugman on his minimization of the Cambridge capital controversy, too.

But the thinks that not the central issue.
But Krugman is right in arguing “you really don’t need to reject standard economics either to explain high inequality or to consider it a bad thing.” I agree. What’s interesting is that, as Piketty shows, it’s possible to analyze and criticize inequality using some of the tools of neoclassical economics. Not easy but it’s possible. Which means that neoclassical economists, for the most part, choose not to try to analyze and criticize inequality. In other words, the fact that they don’t spend much of their time—in teaching, research, and offering policy advice—in analyzing and criticizing the grotesque levels of inequality we’ve seen in recent decades is, in part, an ethical question. They could but they don’t.
And that’s perhaps an even more damaging critique of mainstream economics than the capital controversy itself.
Occasional Links & Commentary
Capital controversy
David F. Ruccio | Professor of Economics University of Notre Dame Notre Dame


Dan Kervick said...

I'm not sure why everyone keeps saying that Piketty uses the "tools of neoclassical economics". Piketty's approach is eclectic and empirical. For example, Piketty both makes nuanced use of and severely criticizes the marginal productivity account. And he criticizes the "stable growth path" account pf the MIT side of the capital controversies while denying that they were ever really committed to it. His main point about the capital controversies is that both parties lacked the empirical resources to decide what the truth was, and so the discussion degenerated into sterile a priori arguments.

Krugman keep trying to paint a domesticated, Krugmaesque version of Piketty, and for some reason the heterodox folks keep agreeing with him.

Matt Franko said...

Dan not sure what you mean by "domesticated"? rsp