Hostname: page-component-8448b6f56d-c4f8m Total loading time: 0 Render date: 2024-04-23T19:01:13.885Z Has data issue: false hasContentIssue false
  • English
  • Français

The theory of capital as a theory of capitalism

Published online by Cambridge University Press:  01 December 2016

EDUARD BRAUN Open the ORCID record for EDUARD BRAUN [Opens in a new window]
EDUARD BRAUN*
Affiliation:
Institute of Management and Economics, Clausthal University of Technology, Julius-Albert Straße 2, 38678 Clausthal-Zellerfeld, Germany
*
*Email: eduard.braun@tu-clausthal.de
Get access Rights & Permissions [Opens in a new window]

Abstract

Before economists and sociologists came up with their own definitions of the term ‘capital’, it was commonly understood as money invested in businesses by their owners or shareholders, and it continues to be understood this way in everyday business practice. In a recent article, Hodgson (2014) advises economists to return to this pre-Smithian usage of the term. This paper takes up Hodgson's demand and develops a theory of capital that is based upon this business notion of capital. It also argues that the Austrian theory of capital, if interpreted correctly, can serve as a starting point. Despite the conviction of its adherents to the contrary, the Austrian theory of capital is not universal or ahistorical, but dovetails with Hodgson's vision of an approach to capital that analyses historically specific features of capitalism.

Type
Research Article
Information
Journal of Institutional Economics , Volume 13 , Issue 2 , June 2017 , pp. 305 - 325
Copyright
Copyright © Millennium Economics Ltd 2016 

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Böhm-Bawerk, E. [1889](1930), The Positive Theory of Capital (W. Smart Trans.), New York: G. E. Stechert & Co. Google Scholar
Braun, E. (2014), ‘The Menger-Lachmann Trajectory on Capital: A Comment on Endres and Harper’, Journal of the History of Economic Thought, 36 (1): 97–102.CrossRefGoogle Scholar
Braun, E. (2015a), ‘Carl Menger's Contribution to Capital Theory’, History of Economic Ideas, 23 (1): 77–99.Google Scholar
Braun, E. (2015b), ‘Unsuspected Origins of Modern Austrian Economics: The Historical School of Economics on Capital and Economic Calculation’, in Bylund, P. and Howden, D. (eds.), The Next Generation of Austrian Economics. Essays in Honor of Joseph T. Salerno, Auburn, AL: Mises Institute, pp. 75–87.Google Scholar
Braun, E. (2016), ‘The Ecological Rationality of Historical Costs and Conservatism’, in Accounting, Economics and Law: A Convivium, doi: 10.1515/ael-2015-0013.Google Scholar
Braun, E., Lewin, P., and Cachanosky, N. (2016), ‘Ludwig von Mises's Approach to Capital as a Bridge between Austrian and Institutional Economics’, Journal of Institutional Economics, 12 (4): 847–866.Google Scholar
Deakin, S., Gindis, D., Hodgson, G., and Huang, K. (2016), ‘Legal Institutionalism: Capitalism and the Constitutive Role of Law’, Journal of Comparative Economics, doi: 10.1016/j.jce.2016.04.005.Google Scholar
Endres, A. and Harper, D. (2011), ‘Carl Menger and His Followers in the Austrian Tradition on the Nature of Capital and Its Structure’, Journal of the History of Economic Thought, 33 (3): 357–384.CrossRefGoogle Scholar
Erlei, M. (2012), ‘Die Wirtschaftskrise aus Sicht der Österreichischen Konjunkturtheorie’, Jahrbuch normative und institutionelle Grundfragen der Ökonomik, 11: 183–212.Google Scholar
Fetter, F. (1937), ‘Reformulation of the Concepts of Capital and Income in Economics and Accounting’, The Accounting Review, 12 (1): 3–12.Google Scholar
Foss, N. and Klein, P. (2013), Organizing Entrepreneurial Judgment, Cambridge: Cambridge University Press.Google Scholar
Garrison, R. (2001), Time and Money: The Macroeconomics of Capital Structure, London and New York: Routledge.Google Scholar
Hagemann, H. (1990), ‘Capital Goods’, in Eatwell, J., Milgate, M., and Newman, P. (eds.), The New Palgrave: Capital Theory, New York and London: W. W. Norton, pp. 123–127.Google Scholar
Harcourt, G. (1972), Some Cambridge Controversies in the Theory of Capital, Cambridge: Cambridge University Press.CrossRefGoogle Scholar
Hayek, F. (1935a), Prices and Production, 2nd edn., New York: Augustus M. Kelly.Google Scholar
Hayek, F. (1935b), ‘The Maintenance of Capital’, Economica, New Series, 2 (7): 241–276.Google Scholar
Hayek, F. (1941), The Pure Theory of Capital, London: Macmillan and Co.Google Scholar
Hodgson, G. (2001), How Economics Forgot History: The Problem of Historical Specificity in Social Science, London and New York: Routledge.CrossRefGoogle Scholar
Hodgson, G. (2010), ‘Albert Schäffle's Critique of Socialism’, in Vint, J., Metcalfe, S., and Kurz, H. (eds.), Economic Theory and Economic Thought, London: Routledge, pp. 296–315.Google Scholar
Hodgson, G. (2014), ‘What is Capital? Economists and Sociologists have Changed Its Meaning: Should It be Changed Back?’ Cambridge Journal of Economics, 38 (5): 1063–1086.CrossRefGoogle Scholar
Hodgson, G. (2015), Conceptualizing Capitalism, Chicago and London: University of Chicago Press.CrossRefGoogle Scholar
Huerta de Soto, J. (2006), Money, Bank Credit, and Economic Cycles (M. A. Stroup Trans.), Auburn, AL: Mises Institute.Google Scholar
Hülsmann, G. (2003), ‘From Value Theory to Praxeology’, in von Mises, L., Epistemological Problems of Economics (G. Reisman Trans.), 3rd edn., Auburn, AL: Mises Institute, pp. ix–lv.Google Scholar
Kirzner, I. (1997), ‘Entrepreneurial Discovery and the Competitive Market Process: An Austrian Approach’, Journal of Economic Literature, 35 (1): 60–85.Google Scholar
Lachmann, L. (1978), Capital and Its Structure, 2nd edn., Kansas City, MO: Sheed Andrews and McNeel.Google Scholar
Lewin, P. (2011), Capital in Disequilibrium, 2nd edn., Auburn, AL: Mises Institute.Google Scholar
Lewin, P. and Cachanosky, N. (2016), ‘A Financial Framework for Understanding Macroeconomic Cycles: The Structure of Production is Relevant’, Journal of Financial Economic Policy, 8 (2): 268–280.Google Scholar
Menger, C. [1871](2007), Principles of Economics (J. Dingwall and B. F. Hoselitz Trans.), Auburn, AL: Mises Institute.Google Scholar
Menger, C. (1888), ‘Zur Theorie des Kapitals’, Jahrbücher für Nationalökonomie und Statistik, 17: 1–49.Google Scholar
Mises, L. [1912](1953), The Theory of Money and Credit (H. E. Batson Trans.), New Haven, CT: Yale University Press.Google Scholar
Mises, L. [1922](1951), Socialism: An Economic and Sociological Analysis (J. Kahane Trans.), New Haven, CT: Yale University Press.Google Scholar
Mises, L. (1949), Human Action – A Treatise on Economics, New Haven, CT: Yale University Press.Google Scholar
Rothbard, M. (2009), Man, Economy, and State: A Treatise on Economic Principles, 2nd edn., Auburn, AL: Mises Institute.Google Scholar
Stolzmann, R. (1909), Der Zweck in der Volkswirtschaft, Berlin: Puttkammer & Mühlbrecht.Google Scholar
Strigl, R. [1934](2000), Capital and Production, Hülsmann, G. (ed.) (M. Hoppe, H.-H. Hoppe Trans.), Auburn, AL: Mises Institute.Google Scholar
Weber, M. [1922](1964), Wirtschaft und Gesellschaft. Grundriss der Verstehenden Soziologie, Tübingen: Mohr.Google Scholar
Wicksell, K. [1898](1936), Interest and Prices (R. F. Kahn Trans.), London: MacMillan.Google Scholar
Zwiedineck-Südenhorst, O. (1930), ‘Kapital und Kapitalismus’, Schmollers Jahrbuch, 54 (2): 1059–1092.Google Scholar