Reviews for The Cambridge controversies in capital theory

The average rating for The Cambridge controversies in capital theory based on 2 reviews is 3 stars.

Review # 1 was written on 2010-06-20 00:00:00 Anton Schrama How do you measure Heterogenous inputs? Broken down well here.

Review # 2 was written on 2010-12-14 00:00:00 Michael Nass Problem identified; solution in doubt It is a curiosity of modern economic thought that some people--Brian Czech identifies them as "neoclassical" economists, led in part by the late Julian Simon--think there is no end to economic growth. When I first became aware of this idea some years ago I dismissed it out of hand along with what I saw as a couple of similar delusions, that of perpetual population growth and an ever-increasing agricultural yield. But maybe the seemingly impossible is possible after all! To get right to the heart of the matter--which Czech does after noting that economic growth is a national goal; that is, a political and (one might say) an emotional goal somewhat in the manner of "manifest destiny" from the nineteenth century--we need to ask why Simon (and other respected economists) think that such a fantastic thing as perpetual economic growth is possible. First they start with "substitutability," the idea that when we run short of some resource another will be developed or otherwise come along to take the place of the now scare resource. Thus plastic replaces wood; coal will replace oil, wind power and mirrors in space will replace coal, and farmed fish will take the place of the wild variety. Second, there is the notion that the efficiency of engines and other technological developments will increase endlessly. And third, there is the relatively new idea of "human capital," a kind of fuzzy--one is tempted to say mystical--belief that human intelligence, education and knowledge will just keep right on growing and growing and growing, getting more and more from less and less. Perhaps these guys never heard of entropy or diminishing returns--or they think that such things are so far in the future that they needn't be mentioned. I suppose somewhere along the way the neoclassicists do recognize that in the very long run even the universe will grow cold, and economic growth will become but a faint and very distant cosmic whisper. What Czech observes, as he convincingly destroys Simon's perpetual growth arguments as Simon articulated them in The Ultimate Resources 2 (1996), is that "Eventually they will recharge their arguments...by resorting to the topic of space travel" (p. 44)--meaning that if we run out of resources on earth, we'll just go to the moon, to Mars, to Alpha Centauri! So what Julian L. Simon and the others are really saying is not clear. What is clear is that they want no limits on economic growth, and they especially do not like to hear sob stories about what we are doing to the environment in pursuit of an ever expanding economy. But what Brian Czech does in this sprightly tome is throw a kind of Niagra Falls flood of water on America's love affair with what he calls "liquidation"--that is, the liquidation of natural capital for present consumption to the impoverishment of future generations. As others have pointed out he does a good job of demolishing what he dubs "the Ptolemaic theory of perpetual economic growth" (p. 51) in favor of "a more Copernican economics...in which economic growth is limited." (p. 49) He calls this new paradigm, "steady state economics" or "ecological economics," in which the natural resources of the planet are not wantonly wasted and destroyed by greedy "liquidators" bent only on self-gratification and status display, but instead maintained by more frugal steady-staters seeking self-actualization as their primary goal in life. This recall of psychiatrist Abraham Maslow's hierarchy of needs fits right in with Czech's hope for a sustainable economy since self-actualization need not require more fuel than the planet has. What Czech does not do well is convince this reader that his steady state plan has a snowball's chance in the boiler room of his runaway train of becoming the accepted paradigm before we use up most of the world's non-renewable resources. What with the acquisitive nature of the human animal (which Czech delineates very well in his portrait of the "Liquidating Class") and the need of corporations and government leaders to go from "ups to upper ups" economically-speaking (to recall Lucy's words in the Peanuts comic strip), there is little prospect that conservation-minded individuals will have enough influence to stop the train before it crashes. What is terrible about this--and this is what Czech is warning us about--is that it will be our grandchildren who will pay the price as the rain forests turn to burgers and the ocean's fisheries to a whopping fish story in the memory of the last fisherman. What kind of world will it be? I don't think that the Bush administration and the present political leaders of most of the world really care. They see it as somebody else's problem downstream. Czech's optimism that the train can be stopped seems like so much whistling Dixie in the dark. I think the deeper issue here is that of the capitalist/corporate economic system itself. Capitalism defeated communism, and we can say hurrah for that. But can a planet with finite resources survive an economic system that seems to function well only when it is spiraling upward? Since capitalism is the current paradigm, to suggest that it needs replacing amounts to something like blasphemy. Consequently Czech does not target capitalism per se. After all he has a career and a reputation to consider. However, I have neither to worry about, and I can say it: capitalism as an economic system is becoming a cancer on the planet. Perhaps the system that will replace it (still awaiting its genius) will build on Czech's steady state ideas. --Dennis Littrell, author of "The World Is Not as We Think It Is"