ABSTRACT
Alternative methods of production generally use different kinds of capital goods and not different proportions of the same capital goods, as would be required for any high substitutability between factors to be postulated independently of the admittedly inconsistent reduction of heterogeneous capital goods to quantities of homogeneous capital. Complex systems do not exhibit a tendency to equilibrium, but despite the fact that they can amplify shocks, they do not explode. General equilibrium is about markets, but it must be about markets which are coupled with nature, in which natural resources play a very special role, and also markets in which knowledge plays a very special role as well. In a general equilibrium model there is no real sense in which one factor causes another: everything is determined simultaneously by the whole collection of relationships. Neoclassical general equilibrium theory does not require the existence of aggregate capital as a factor in an aggregate production function.
