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Frank Knight and the Productivity of Capital: Another Piece of the Puzzle

Published online by Cambridge University Press:  11 June 2009

Nimai Mehta
Affiliation:
Center for Study of Public Choice, George Mason University, Fairfax, Virginia, 22030, USA; and the School of Economics, University of the Philippines, Philippines.

Extract

Through the 1930s, Frank H. Knight engaged the economic profession in a prodigious exchange over the nature and productivity of capital. Knight's efforts here were driven by three significant objectives: first, that capital theory had to be able to explain the broad fact of capital accumulation and growth as actually experienced by progressive societies; second, that existing doctrines had to be purged of the flawed vestiges of the classical-Ricardian theory of production if any progress was to be had in achieving the first objective; third, and last, that an alternative theory of capital needed to provide an explanation of the productivity of capital consistent with the fulfillment of the first two tasks. Knight failed in the third task or, at best, left the task incomplete.

Type
Research Article
Copyright
Copyright © The History of Economics Society 2003

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