Synopses & Reviews
Synopsis
The third volume of
The Collected Works of Israel M. Kirzner presents a collection of writings on capital theory that serve both as a discourse in the history of economic thought and as conceptual clarification in one of the most complex subjects in economics. This edition explores the notions of capital and interest in light of the controversies surrounding these topics.
The first essay in this volume is Kirzner's introduction to the 1996 edition. The second essay was published as a stand-alone book in 1966 and presents Kirzner's capital theory, focusing on multi-period production plans. In the third essay Kirzner offers an interpretation of Ludwig von Mises's view of capital and interest. The fourth essay, written in the late 1980s, is Kirzner's attempt to clarify the difficulties found in interest theory. Finally, the fifth essay deals with Sir John Hick's capital theory in light of Kirzner's own Austrian position.
Israel M. Kirzner is a leading economist in the Austrian School and Emeritus Professor of economics at New York University.
Peter J. Boettke is the BB&T Professor for the Study of Capitalism at the Mercatus Center and a University Professor of economics at George Mason University. Since 1988 he has been the editor of the Review of Austrian Economics.
Frédéric Sautet is a Visiting Associate Professor of Economics at the Catholic University of America. Previously, he has taught at George Mason University, New York University, and the University of Paris Dauphine. He was also a senior economist at the New Zealand Treasury and the New Zealand Commerce Commission. He is the author of An Entrepreneurial Theory of the Firm and has widely published on entrepreneurship.
Synopsis
Essays on Capital and Interest presents a collection of writings on capital theory that serve both as a discourse in the history of economic thought and as conceptual clarification in one of the most complex subjects in economics.
Israel M. Kirzner is a leading economist in the Austrian School and Professor Emeritus of Economics at New York University.
Peter J. Boettke is University Professor of Economics and Philosophy at George Mason University and the BB&T Professor for the Study of Capitalism at the Mercatus Center.
Frederic Sautet is a visiting associate professor of economics at the Catholic University of America. Previously, he has taught at George Mason University, New York University, and the University of Paris Dauphine.
Table of Contents
Table of Contents
Introduction to the Liberty Fund Edition ix
by Peter J. Boettke and Frédéric Sautet
Essay 1. Introduction 1
The Mengerian Legacy 3
Mengerian Austrianism and the Cambridge Controversy 5
Subjectivism, Reswitching Paradoxes and All That 8
Complete and Incomplete Subjectivism in the
Theory of Capital and Interest 12
Essay 2. An Essay On Capital 14
Preface to the 1966 Edition of An Essay on Capital 14
Chapter 1. Unfinished Plans 15
Introduction 15
A Digression on Method 16
Individual Decisions and the Market 17
The Decisions of Crusoe: Multiperiod Decisions 18
The Half-Finished Project 24
Crusoe and an Overlapping Sequence of Plans 31
Multiperiod Planning by the Individual in a Market Economy 34
Interacting Plans 38
The “State of Affairs” of an Economy 42
Some Remarks on the Theory of Capital 44
Is a Theory of Capital Really Necessary? 47
Chapter 2. Stocks and Flows 50
The “Presence” of Capital Stocks 50
Stock Demand and Flow Demand 53
Are Capital Goods “Used Up” in Production? 55
Hicks and the Stock-Flow Production Function: A Digression 59
Capital Stocks and Income Flows 60
Knight and the Permanence of Capital 62
A Critique of the Knightian View 65
Capital and Income 68
Chapter 3. Capital and Waiting 75
Capitalistic Production as Exchange across Time 76
Lags vs. Simultaneity in Capitalistic Production 78
A Criticism of the Synchronization View 80
The Period of Production Concept in the Contemporary Literature 83
Capital and Waiting 88
Is “Waiting” a Factor of Production? 94
Chapter 4. Measuring Capital 101
A Discussion of the Problem of Capital Measurement 101
The Capital Measurement Problem in the Literature 117
Essay 3. Ludwig von Mises and the Theory of Capital and Interest 134
Mises on Capital and on Interest 135
Mises and Böhm-Bawerkian Theory 137
Mises and the Clark-Knight Tradition 141
Mises, Capitalists, and Entrepreneurship 145
Essay 4. The Pure Time-Preference Theory of Interest: An Attempt at Clarification 147
The Interest Problem 147
The Pure Time-Preference Theory of Interest 151
Sheep, Rice, and Austrian Hocus-Pocus 152
Interest, Own-Rates of Interest, and Intertemporal Exchange 155
The Interest Problem That Calls for Solution: The Competing Versions 158
The Existence of Interest vs. the Rate of Interest 161
Some Remarks on Methodological Essentialism 163
Science and Ideology: The Cambridge Controversy and PTPT 165
Conclusion 167
Essay 5. The Theory of Capital 169
Hicks, Materialists, and Fundists 169
Fundists: A Terminological Puzzle 170
Hicksian Fundism 171
Austrians, Materialists, and Fundists 173
On Measuring Capital: The Individual 174
Measuring Capital: The Economy 176
On the Notion of the Quantity of Capital per Head 177
References 179
Index 187