Abstract
Economic theory focuses today, as it has for more than a hundred years, on two important problems: on scarcity on the one hand, and on the formation and distribution of income, as well as assets, on the other. Discussion concerning scarcity led historically to the development of allocation theory. The questions of how income is created, how it will be distributed among different socio-economic groups, and how its distribution influences the welfare of a single individual as well as the welfare of a whole nation, were responsible for the emergence of welfare theory and, more recently, for political economy, where distributional aspects are analyzed in terms of political systems, their structures, and the distribution of power.
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References
Science discerns today between three different time concepts: (1) cosmological time, (2) thermo-dynamic time, and (3) psychological time. From an economic point of view psychological time is the most important one (for a more detailed discussion, see O’DRISCOLL and RIZZO 1985). Modern physics (see HAWKING 1988) shows, however, that the three different time concepts are identical. Hence, the way we usually experience time, i.e., the psychological time, is directed by the entropy-law. Further, uncertainty and directedness are only two, but in our view the most important, functions of time in economic considerations. For a comprehensive discussion of the role, time plays in economic systems, the interested reader is referred to FABER and PROOPS (1986) and the references cited there.
For an overview on capital theory controversies, especially the Cambridge controversies, see HARCOURT (1972), BURMEISTER (1980), BLAUG (1985) and AHMAD (1991). A good introduction in capital theory controversies and the historical evolution of capital theory is provided by SPECK (1995).
For an explanation see Chapter 2, Section 2.3, or VARIAN (1984).
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© 1995 Springer-Verlag Berlin Heidelberg
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Stephan, G. (1995). Introduction and Motivation. In: Introduction into Capital Theory. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-662-03081-3_1
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DOI: https://doi.org/10.1007/978-3-662-03081-3_1
Publisher Name: Springer, Berlin, Heidelberg
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