The Marginal Productivity Theory of the Price of Capital : An Historical Perspective on the Origins of the Codswallop

Grieve, Roy (2012) The Marginal Productivity Theory of the Price of Capital : An Historical Perspective on the Origins of the Codswallop. Discussion paper. University of Strathclyde, Glasgow.

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    Abstract

    Although it might have been expected that, by this point in time, the unacceptability of the marginal productivity theory of the return on capital would be universally agreed, that is evidently not the case. Popular textbooks still propound the dogma to the innocent. This note is presented in the hope that a succinct indication of the origins of the theory it will contribute to a more general appreciation of the unrealistic and illogical nature of this doctrine.