Essays on Capital and Interest: An Austrian Perspective

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.

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Essays on Capital and Interest: An Austrian Perspective

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.

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Essays on Capital and Interest: An Austrian Perspective

Essays on Capital and Interest: An Austrian Perspective

Essays on Capital and Interest: An Austrian Perspective

Essays on Capital and Interest: An Austrian Perspective

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Overview


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.


Product Details

ISBN-13: 9780865977808
Publisher: Liberty Fund, Incorporated
Publication date: 06/26/2012
Series: The Collected Works of Israel M. Kirzner , #3
Pages: 208
Sales rank: 894,179
Product dimensions: 6.00(w) x 9.00(h) x 0.75(d)
Age Range: 18 Years

About the Author

Israel M. Kirzner, Formerly Professor of Economics, New York University, US

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

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