Dvoskin, Ariel and Fratini, Saverio M.
(2015):
*On the Samuelson-Etula Master Function and Marginal Productivity: some old and new critical remarks.*

Preview |
PDF
MPRA_paper_63415.pdf Download (838kB) | Preview |

## Abstract

The paper addresses the ambiguity that surrounds the conception of capital and its role in neoclassical price-and-distribution theory. The difficulties encountered in the various attempts to define the marginal product either of capital or of a capital good are recalled and the conclusion is drawn that neither concept appears theoretically sound. This is combined with critical discussion of the recent attempt by Samuelson and Etula to determine income distribution by means of their ‘Master Function’ and its ‘non-neoclassical’ marginal products. Rather than the existence of a continuum of alternative technical possibilities, Samuelson and Etula assume the simultaneous coexistence of a discrete number of methods of production for the same commodity. Even though each technique employs the inputs in fixed proportions, the coexistence of various techniques permits the full employment of an arbitrarily given vector of input endowments. As is shown here, however, the coexistence of methods required for the differentiability of the Samuelson-Etula Master Function can take place, if capital goods are used in production, neither in the case with stationary relative prices nor in the non-stationary Arrow-Debreu framework.

Item Type: | MPRA Paper |
---|---|

Original Title: | On the Samuelson-Etula Master Function and Marginal Productivity: some old and new critical remarks |

Language: | English |

Keywords: | capital – capital goods – marginal product of capital – Master Function - neoclassical theory of value and distribution –Samuelson |

Subjects: | B - History of Economic Thought, Methodology, and Heterodox Approaches > B2 - History of Economic Thought since 1925 > B21 - Microeconomics C - Mathematical and Quantitative Methods > C6 - Mathematical Methods ; Programming Models ; Mathematical and Simulation Modeling > C61 - Optimization Techniques ; Programming Models ; Dynamic Analysis D - Microeconomics > D2 - Production and Organizations > D24 - Production ; Cost ; Capital ; Capital, Total Factor, and Multifactor Productivity ; Capacity D - Microeconomics > D4 - Market Structure, Pricing, and Design > D46 - Value Theory D - Microeconomics > D5 - General Equilibrium and Disequilibrium > D51 - Exchange and Production Economies |

Item ID: | 63415 |

Depositing User: | Saverio M. Fratini |

Date Deposited: | 06 Apr 2015 13:05 |

Last Modified: | 07 Oct 2019 20:48 |

References: | Dantzig, G.B. (1951). “Maximization of a Linear Function of Variables Subject to Linear Inequalities,” in T.C. Koopmans (ed.), Activity Analysis of Production and Allocation. John Wiley & Sons: New York Etula, E (2006) “The two-sector von Thu¨nen original marginal productivity model of capital; and beyond”; MIT working paper. Fratini, S. (2007) “Reswitching of techniques in an intertemporal equilibrium model with overlapping generations”; Contributions To political Economy; 26(1): 43-59. Fratini, S. (2010) “Reswitching and decreasing demand for capital”; Metroeconomica, Vol. 61(4), pp. 676-682. Fratini, S. (2013a) “Real Wicksell effect, demand for capital and stability”; Metroeconomica, Vol. 64(2), pp. 346-360. Fratini, S. (2013b) “Malinvaud on Wicksell’s Legacy to Capital Theory:Some Critical Remarks” in Levrero, S.; Stirati, A.; Palumbo, A. (eds.) Sraffa and the reconstruction of economic theory. Vol. 1. London: McMillan. Garegnani, P. (1984) “On some illusory instances of marginal products”; Metroeconomica, 36, pp. 143-160. Garegnani, P. (2007) “'Samuelson's misses: A rejoinder”, The European Journal of the History of Economic Thought, Vol. 14(3), pp. 573 – 585. Hahn, F. (1975) “Revival of political economy: the wrong issues at the wrong argument”; Economic Record, Vol. 51, pp. 360-364. Hatta, T. (1976) “The paradox in capital theory and complementarity of inputs”; The Review of Economic Studies, Vol. 43(1), pp. 127-142. Hicks, J.R. (1932) “Marginal productivity and the principle of variation”, Economica, 35, pp. 79-88. Malinvaud, E. (1953) “Capital Accumulation and Efficient Allocation of Resources”; Econometrica, Vol. 21(2), pp. 233-268. Marx, K. (1909 [1867-1894]) Capital. 3 Vol. Chicago: Charles H. Herr & Company. Pasinetti, L. (1969) “Switches of Technique and the "Rate of Return" in Capital Theory”; The Economic Journal, Vol. 79(315), pp. 508-531 Robertson, D. (1931), “Wage wrumbles”, in: D.H. Robertson. Economic Fragments. London: P.S. King & Son. Samuelson, P. A. (1962) “Parable and Realism in Capital Theory: The Surrogate Production Function”; The Review of Economic Studies, Vol. 29(3), pp. 193-206. Samuelson, P. A. (1966) “A summing-up”; The quarterly journal of economics, Vol. 80 (4), pp. 568-583. Samuelson, P.A.; Etula, E. (2006) “Complete work-up of the one-sector scalar-capital theory of interest rate: Third installment auditing Sraffa’s never-completed ‘Critique of Modern Economic Theory’’’; Japan and the World economy, Vol. 18, pp. 331-356. Samuelson, P.A. (2007) “Classical and Neoclassical harmonies and dissonances”; The European Journal of the History of Economic Thought, Vol. 14 (2), 243 - 271 Sraffa, P. (1960) Production of commodities by means of commodities. Prelude to a critique of economic theory; Cambridge: Cambridge University Press. Swan, T.W. (1956) “Economic growth and capital accumulation”; Economic Record, 32, pp. 334.361. Trabucchi, P. (2011) “Capital as a Single Magnitude and the Orthodox Theory of Distribution in Some Writings of the Early 1930s”; Review of political economy; Vol. 23(2), pp. 169–188. Wicksell, K. (1934 [1901]) Lectures on Political Economy. 2 vols.; London: Routledge. |

URI: | https://mpra.ub.uni-muenchen.de/id/eprint/63415 |