Capital theory traditionally spans two major compartments of economic theory: the theory of production of both individual products and the total product, and the theory of the distribution of the aggregate product between the different classes of capitalist society. It has always been controversial, partly because the subject matter is difficult and partly because rival ideologies and value systems impinge directly on the subject matter. In the present book the various topics associated with the exchanges between the 'neo-Keynesians' and the 'neo-neoclassicals' are discussed and evaluated. The topics include the measurement of capital, the revival of interest in Irving Fisher's rate of return on investment, the double-switching debate, Sraffa's prelude to a critique of neoclassical theory, and the 'new' theories of the rate of profits in capitalist society.

In "The Production Function and the Theory of Capital, " Joan Robinson (1953-1954 . . . the production function has been a powerful instrument of miseducation. The student of economic theory is taught to write Q ϭ f (L, K ) where L is a quantity of labor, K a quantity of capital and Q a rate of output of commodities. He is instructed to assume all workers alike, and to measure L in man-hours of labor; he is told something about the index-number problem in choosing a unit of output; and then he is hurried on to the next question, in the hope that he will forget to ask in what units K is measured. Before he ever does ask, he has become a professor, and so sloppy habits of thought are handed on from one generation to the next.

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