Preliminaries to the main bout

Another offshoot of the criticisms of the use of the concept of malleable capital both in theoretical analysis and in the aggregate production function is the work on the social rate of return on investment, which is associated especially with Solow. His views are set out in the 1963 De Vries Lectures, Solow [1963a], in his contribution to the Dobb Fest-schrift, Solow [1967], and in the subsequent exchanges with Pasinetti in Solow [1970] and Pasinetti [1970]. (In the company of Tobin, von Wiezsacker and Yaari [1966], he added further thoughts in the analysis of ‘quickening’.) These sources, together with Joan Robinson's review article of Solow [1963a] (Robinson [1964b], reprinted as Robinson [1965b], pp. 36–47), help to crystallize the nature of the approach and to highlight some of the causes of the controversies between Cambridge, England, and Cambridge, Mass.

Partly the debate is about definitions and the meaning of tautologies; partly it is about whether any positive or normative significance may be attached to results that imply that the rate of return on investment is equal to the rate of profits. Here, as elsewhere, though, there seem to be legitimate doubts as to whether one side really understands what the other is supposed to be saying. But if one side may be said to be guilty of setting up straw men of their own making, the better and more effectively to knock them down again, the other is equally as guilty of employing dodges and feints which, in typical ‘learning by doing’ fashion, were acquired as a result of the experience gained in previous rounds.