Economics Dictionary of ArgumentsHome
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| Capital: Capital in economics refers to assets used to produce goods and services, including financial capital, machinery, buildings, and human skills. It represents an investment in productive resources, contributing to economic growth, productivity, and wealth generation. Capital can be physical or human, and its accumulation is crucial for development._____________Annotation: The above characterizations of concepts are neither definitions nor exhausting presentations of problems related to them. Instead, they are intended to give a short introduction to the contributions below. – Lexicon of Arguments. | |||
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Ludwig Lachmann on Capital - Dictionary of Arguments
Rothbard III 966 Capital/Lachmann/Rothbard: (…) "capital" is not just a homogeneous blob that can be added to or subtracted from. Capital is an intricate, delicate, interweaving structure of capital goods. All of the delicate strands of this structure have to fit, and fit precisely, or else malinvestment occurs. Free market: The free market is almost an automatic mechanism for such fitting; (…) the free market, with its price system and profit-and-loss criteria, adjusts the output and variety of the different strands of production, preventing any one from getting long out of alignment.(1) 1. Cf. L.M. Lachmann, Capital and Its Structure. Also see P.T. Bauer and B.S. Yamey, The Economics of Underdeveloped Countries (London: James Nisbet and Co., 1957), pp. 129 ff. - - - Coyne I 16 Capital/Lachmann/Coyne/Boettke: The idea that the same good can be used by different people for different purposes refers to heterogeneity in use, which rell«orces-the idea that- whether something as a capital good depends on how people view the good as fitting into their broader plans and goals. >Capital goods/Menger. Capital stock: This suggests that there is no fixed and pre-defined stock of capital since whether something is capital depends on how individuals subjectively perceive its use. In addition to being heterogeneous, each individual capital good can itself be employed in multiple potential uses. This illustrates the multispecific nature of capital, which means that heterogeneous capital has many, albeit limited, uses. Economic actors must determine the best use of these scarce resources from an array of competing alternatives. The heterogeneity and multi-specificity of capital goods imply that capital goods are complementary to one another and must be used in capital combinations to achieve a production plan. Entrepreneurs need to discover these combinations and determine how they fit in the broader process of production in order to yield the desired consumer goods. >Production, >Production structure. Coyne I 17 These capital combinations make up what is referred to as the capital structure within an economy. This structure is characterized by a complex set of relationships with a coherent pattern of order. The capital structure is not fixed. Instead it is in a constant state of change as a result of three factors. >Capital structure/Lachmann._____________Explanation of symbols: Roman numerals indicate the source, arabic numerals indicate the page number. The corresponding books are indicated on the right hand side. ((s)…): Comment by the sender of the contribution. Translations: Dictionary of Arguments The note [Concept/Author], [Author1]Vs[Author2] or [Author]Vs[term] resp. "problem:"/"solution:", "old:"/"new:" and "thesis:" is an addition from the Dictionary of Arguments. If a German edition is specified, the page numbers refer to this edition. |
Lachmann, Ludwig Rothbard II Murray N. Rothbard Classical Economics. An Austrian Perspective on the History of Economic Thought. Cheltenham, UK: Edward Elgar Publishing. Cheltenham 1995 Rothbard III Murray N. Rothbard Man, Economy and State with Power and Market. Study Edition Auburn, Alabama 1962, 1970, 2009 Rothbard IV Murray N. Rothbard The Essential von Mises Auburn, Alabama 1988 Rothbard V Murray N. Rothbard Power and Market: Government and the Economy Kansas City 1977 Coyne I Christopher J. Coyne Peter J. Boettke The Essential Austrian Economics Vancouver 2020 |
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