J. Barkley Rosser — Paul Krugman Really Blows It

It is in his parenthetical aside, that "you shouldn't" think that Robinson and Kaldor (who was not one of the main participants in that debate from the Cambridge, UK side, and I say that as one who has recently been labeled a "Kaldorian") were right in the debate. The problem is that Paul Samuelson agreed that in fact Robinson and Piero Sraffa (and Garegnani and Pasinetti) were in fact right. The possibility of reswitching does undermine profoundly the marginal productivity theory of factor income distribution, especially for capital. He did so in his "Summing Up" paper after the symposium on reswitching in the QJE in 1966. His final sentence of that paper, after going through the arguments in several papers was "The foundations of economic theory are built on sand."

Krugman makes a lot of good points, but he really needs to get it together about what went down during the Cambridge capital theory controversies. Robinson and Sraffa were right, and Paul Samuelson said so. Period.

Smacking down the revisionists.

Econospeak
Paul Krugman Really Blows It
J. Barkley Rosser | Professor of Economics at James Madison University in Harrisonburg, Virginia