On the Cambridge, England, Critique of the Marginal Productivity Theory of Distribution

Abstract

The Cambridge critique of the marginal productivity theory of distribution is entwined with the critics’ theories of value, price, distribution, capital, growth, and methodology that occurred alongside it. The article first discusses these dimensions, then the inescapable need to explain the origin and size and rate of profits in any approach to the theory of distribution. The need in the neoclassical approach to have a unit in which to measure capital that is independent of distribution and prices is examined. The alternative classical/Marxian alternative and the relationship of pricing and market structures to systemic relationships in Post-Keynesian theory are analysed. Unresolved debates among the critics of the mainstream are outlined including those between Garegnani and Hahn. Ways forward are suggested in the concluding section.