Abstract
Problems of capital theory have been controversial both in the past and in the present. In 19 37 an article by Kaldor appeared in Econometrica under the heading “Annual Survey of Economic Theory: The Recent Controversy on the Theory of Capital”. More than 30 years later, in 1969, Harcourt published a survey-article in the Journal of Economic Literature: “Some Cambridge Controversies in the Theory of Capital”. (A substantially extended version of this article was edited as a book under the same title in 1972.) The present state of capital theory is best characterized by Bliss in the foreword of his book Capital Theory and the Distribution of Income [1975]:
“When economists reach agreement on the theory of capital they will shortly reach agreement on everything. Happily, for those who enjoy a diversity of views and beliefs, there is very little danger of this outcome”, (p.VII) There are several reasons for the permanent conflicts on the field of capital theory.
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References
A more detailed, elegantly written introduction is found in Dewey [1963].
A good introduction is given by Krelle, [1969], pp.63–72.
Circularity is used here and later on in the meaning use of a good to produce that same good i.e. use of a hammer to hammer out a new hammer; another example would be the sowing of corn in its reproduction. We also use instead of circularity recycling.
Using von Böhm-Bawerk’s simple interest calculation one obtains for the value of one unit of the consumption good after n periods: (1+nr) units instead of (1+r)n with compound interest.
An extensive representation of the concept of the average period of production is given by Fehl [1976].
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© 1979 Springer-Verlag Berlin Heidelberg
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Faber, M. (1979). Introduction. In: Introduction to Modern Austrian Capital Theory. Lecture Notes in Economics and Mathematical Systems, vol 167. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-642-48310-3_1
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DOI: https://doi.org/10.1007/978-3-642-48310-3_1
Publisher Name: Springer, Berlin, Heidelberg
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