Political aspects of the capital controversies and capitalist crises

ABSTRACT

The Cambridge controversies about the theory of capital were ultimately underpinned by a clash between two different visions of capitalism, the neoclassical view, according to which distribution depends on the supply and demand curves of capital and labor, and the post Keynesian view, according to which distribution depends on political and institutional factors instead. I shall argue that the distinction between “meritocratic capitalism” and “patrimonial capitalism,” which underpins the discussions surrounding Thomas Piketty’s Capital in the Twenty-First Century, is also connected to those two different visions of capitalism, which were behind the Cambridge controversies. These two visions of capitalism have important implications for our understanding of political power over workers, and also to our understanding of political power over land and its natural resources. The role of land and natural resources was not discussed in the Cambridge controversies, but is addressed in Piero Sraffa’s Production of Commodities, and is implied in Piketty’s inclusion of land in his definition of capital, which brings in a geographical dimension to our understanding of capitalism and capitalist crises, as I shall argue.

KEYWORDS:

• Capital
• crises
• distribution
• land
• marginal productivity

JEL CLASSIFICATIONS:

• B41
• D30
• E12
• R14

Notes

¹On the differences between Walras’s approach and the neo-Walrasian perspective of Arrow–Debreu–MacKenzie, see also Dvoskin and Lazzarini (2013), Lazzarini (2011, ch. 6), Martins (2013, pp. 61–63), and Petri (2004, ch. 4).

²For a more detailed explanation, see Samuelson (2010, pp. 168–170).

Additional information

Notes on contributors

Nuno Ornelas Martins

Nuno Ornelas Martins is a Lecturer in Economics at Católica Porto Business School and CEGE, Universidade Católica Portuguesa.