In the Introduction I have tried to show that neoclassicism cannot encompass a concept of capital rich enough to account for both capital as a fund and capital as specific equipment and goods; so that it cannot present both a theory of the firm and a theory of distribution, determined by supply and demand in product and factor markets, respectively. Yet it must present both if it is to be true to its contradictions. Defenders of the faith where factor endowments include fertile imaginary lands, have produced a plentiful supply of models whose lithe proportions may enable them to evade one or another of these objections. But the purpose of this book is not criticism. It is important to understand the shortcomings of neoclassicism, but it is more important to try to develop a more adequate account of the working and misworking of the capitalist system. That is the chief object of the essays collected here.

Two principal positions are set forth in Part I and run throughout the book. One, which could be dubbed a post-Keynesian position, represented by my essay, starts from the fact that neoclassicism misrepresents the nature of circulation and distribution. Correcting this requires the reconstruction of the theory of effective demand, and, in particular, developing a theoretical link between pricing and investment decisions.

The other, which could be called neo-Marxian, represented by Hymer's paper, begins from orthodoxy's failure to grasp the relations of dominance and subordination in production. Correcting this leads to a rethinking of the way theory represents both the relationships of production and the way markets operate.