Capital theory is renowned for the controversies with which it is associated. In this book we survey the background to, and the issues of, the latest controversy, the debates between the two Cambridges – Cambridge, England and Cambridge, Mass. We designate the two sets of protagonists, for convenience but rather loosely, as the neo-neoclassicals and the neo-Keynesians. Geographically the borderlines get crossed; amongst the most prominent neo-neoclassicals are not only Samuelson and Solow of M.I.T. but also Meade of Cambridge, England. The most prominent neo-Keynesians include Joan Robinson, Kaldor and Pasinetti, all of Cambridge, England. The writings of another economist of Cambridge, England, Piero Sraffa, are also quite vital to the debates and issues though, in a sense, he has stood aloof from the recent exchanges.

The background to the ‘Cambridge controversies in the theory of capital’ is the renewed interest in the past quarter century in the causes and consequences of economic growth. Allied with this interest has been the examination of changes in the distribution of the growing social product between both the ‘factors of production’ and the different socioeconomic classes. This has involved analyses of expected and actual changes in distributive prices and shares. Capital theory is relevant at a number of points, for example, the course of capital accumulation over time, both in the absence and the presence of technical change; the attempts that have been made to estimate the relative contributions of technical progress and capital accumulation to the overall growth of productivity; and the choice which must be made amongst various alternative techniques when investment decisions are taken.