ABSTRACT
The capital theory debates lasted for a short period, early to mid-1960s; however, they were intense since the status of the neoclassical theory was at stake. Robinson raised the question of the consistent measurement of capital goods in a production function. Samuelson, through his “parable production function”, attempted to rescue the neoclassical principle of scarcity prices and the associate with it derivation of well-behaved demand schedules for capital, but soon he faced the criticism that his “capital” refers to the production of a single consumer good. The subsequent debate ended with the recognition that the neoclassical principle of scarcity prices is not general and there are cases treated as either paradoxes according to neoclassical economists, or logical inconsistencies according to Sraffians. The trouble with both neoclassicals and Sraffians is that their views were based on numerical examples detached from reality.
