By now, most economists are aware of the flaws in the aggregative neoclassical models of growth, productivity, and income distribution. Whether neoclassicism in its full generality is open to the same sorts of objections is still a matter of dispute. It is not the object of this book to enter that dispute. Instead, it will first chart some of the territory that neoclassicism has been forced to yield, and then stake out a claim and begin building new edifices there. This introduction will try to relate one of the central purposes of these constructions – understanding what capital is – to the critique of neoclassical theory.

For many economists neoclassicism is economic science, and attacks upon it simply create a sense of unease. Without theory, there is no science; economists will be left with nothing to say that could not be said as well by any intelligent observer who takes the trouble to study the facts. But the attacks on neoclassicism are not attacks on theory as such. They are attacks on a theory regarded as wrong and have been designed as a prelude to replacing that theory with a better one. As will become evident, there is more agreement on the defects of orthodox theory than there is on what theory is to replace it; but all are agreed that the point of the criticism is to clear the ground for construction.

The standard version of orthodox theory

The critique of neoclassicism grew out of a concern with the way orthodox economics treated capital and wage–labor, and has been principally directed against what may be called the standard version of orthodox theory.