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Capital as in capitalism, or capital as in capital goods, or both?

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  • Eduard Braun

    (Clausthal University of Technology)

Abstract

Austrian economists employ two different concepts of capital. Sometimes they treat capital as a universal phenomenon of human action as such. Capital is then understood as a combination of heterogeneous capital goods that appear on the intermediate stages of the production process. In other instances, they understand capital as a homogeneous value magnitude expressed in money terms that is employed in business accounting. This paper argues that this practice not only creates terminological confusion, but leads to substantial misunderstandings when it comes to important theories held by the Austrian school. The point is exemplified by the Austrian theory of the business cycle.

Suggested Citation

  • Eduard Braun, 2020. "Capital as in capitalism, or capital as in capital goods, or both?," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 33(3), pages 383-395, September.
    • Handle: RePEc:kap:revaec:v:33:y:2020:i:3:d:10.1007_s11138-018-0415-6
    DOI: 10.1007/s11138-018-0415-6
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    References listed on IDEAS

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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Capital; Capitalism; Capital goods; Austrian business cycle theory;
    All these keywords.

    JEL classification:

    • B53 - Schools of Economic Thought and Methodology - - Current Heterodox Approaches - - - Austrian
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • P12 - Political Economy and Comparative Economic Systems - - Capitalist Economies - - - Capitalist Enterprises

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