Editing Production function (section)

====On the concept of capital====
During the 1950s, '60s, and '70s there was a lively debate about the theoretical soundness of production functions (see the [[Capital controversy]]). Although the criticism was directed primarily at aggregate production functions, microeconomic production functions were also put under scrutiny. The debate began in 1953 when [[Joan Robinson]] criticized the way the factor input [[Capital (economics)|capital]] was measured and how the notion of factor proportions had distracted economists. She wrote:

"The production function has been a powerful instrument of miseducation. The student of economic theory is taught to write <math>Q = f (L, K)</math> where <math>L</math> is a quantity of labor, <math>K</math> a quantity of capital and <math>Q</math> a rate of output of commodities. [They] are instructed to assume all workers alike, and to measure <math>L</math> in man-hours of labor; [they] are told something about the index-number problem in choosing a unit of output; and then [they] are hurried on to the next question, in the hope that [they] will forget to ask in what units K is measured. Before [they] ever do ask, [they] have become a professor, and so sloppy habits of thought are handed on from one generation to the next".<ref>{{cite journal |title=The Production Function and the Theory of Capital |first=Joan |last=Robinson |year=1953 |journal=[[Review of Economic Studies]] |volume=21 |issue= 2|pages= 81–106 |doi= 10.2307/2296002|jstor=2296002 }}</ref>

According to the argument, it is impossible to conceive of capital in such a way that its quantity is independent of the rates of [[interest]] and [[wages]]. The problem is that this independence is a precondition of constructing an isoquant. Further, the slope of the isoquant helps determine relative factor prices, but the curve cannot be constructed (and its slope measured) unless the prices are known beforehand.