IDEAS home Printed from https://ideas.repec.org/a/kap/revaec/v35y2022i2d10.1007_s11138-020-00515-8.html
   My bibliography  Save this article

Unmixing the metaphors of Austrian capital theory

Author

Listed:
  • Cameron Harwick

    (SUNY College at Brockport)

Abstract

A complement of metaphors inherited from the classical era has held back progress in Austrian capital theory (ACT). In particular, the attachment to circulating capital as the paradigmatic capital good, largely motivated by the business cycle theory, has locked ACT into a nonoperational point-output model of production. This paper draws out a distinct flow-output approach from work by Lachmann, Lewin, and Cachanosky, contrasts its associated metaphors and paradigms with those of the canonical Hayek-Garrison model, and argues that the former has the potential to bolster both the analytical coherence and the empirical relevance of ACT that it has so far found elusive. By focusing on the investment project rather than the capital good as the object of planmaking, the flow-output approach affirms the core appeal of ACT – a heterogeneous capital structure and a market process approach – by declaring independence from the business cycle theory.

Suggested Citation

  • Cameron Harwick, 2022. "Unmixing the metaphors of Austrian capital theory," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 35(2), pages 163-176, June.
  • Handle: RePEc:kap:revaec:v:35:y:2022:i:2:d:10.1007_s11138-020-00515-8
    DOI: 10.1007/s11138-020-00515-8
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s11138-020-00515-8
    File Function: Abstract
    Download Restriction: Access to full text is restricted to subscribers.

    File URL: https://libkey.io/10.1007/s11138-020-00515-8?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Avi J. Cohen, 2003. "Retrospectives: Whatever Happened to the Cambridge Capital Theory Controversies?," Journal of Economic Perspectives, American Economic Association, vol. 17(1), pages 199-214, Winter.
    2. William J. Luther & Mark Cohen, 2016. "On the Empirical Relevance of the Mises–Hayek Theory of the Trade Cycle," Advances in Austrian Economics, in: Studies in Austrian Macroeconomics, volume 20, pages 79-103, Emerald Group Publishing Limited.
    3. Alexander W. Salter & William J. Luther, 2016. "The Optimal Austrian Business Cycle Theory," Advances in Austrian Economics, in: Studies in Austrian Macroeconomics, volume 20, pages 45-60, Emerald Group Publishing Limited.
    4. Lewin, Peter & Cachanosky, Nicolás, 2018. "The Average Period Of Production: The History And Rehabilitation Of An Idea," Journal of the History of Economic Thought, Cambridge University Press, vol. 40(1), pages 81-98, March.
    5. Nicolás Cachanosky & Peter Lewin, 2016. "Financial Foundations of Austrian Business Cycle Theory," Advances in Austrian Economics, in: Studies in Austrian Macroeconomics, volume 20, pages 15-44, Emerald Group Publishing Limited.
    6. Nicolás Cachanosky & Peter Lewin, 2018. "The Role of Capital Structure in Austrian Business Cycle Theory," Journal of Private Enterprise, The Association of Private Enterprise Education, vol. 33(Summer 20), pages 21-32.
    7. William Luther & Mark Cohen, 2014. "An Empirical Analysis of the Austrian Business Cycle Theory," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 42(2), pages 153-169, June.
    8. F. A. v. Hayek, 1936. "The Mythology of Capital," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 50(2), pages 199-228.
    9. Yeager, Leland B, 1976. "Toward Understanding Some Paradoxes in Capital Theory," Economic Inquiry, Western Economic Association International, vol. 14(3), pages 313-346, September.
    10. Scott Gordon, 1973. "The Wage-Fund Controversy: The Second Round," History of Political Economy, Duke University Press, vol. 5(1), pages 14-35, Spring.
    11. Michael Bruno & Edwin Burmeister & Eytan Sheshinski, 1966. "The Nature and Implications of the Reswitching of Techniques," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 80(4), pages 526-553.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. William J. Luther, 2021. "Two paths forward for Austrian macroeconomics," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 34(2), pages 289-297, June.
    2. Nicolás Cachanosky, 0. "Microfoundations and macroeconomics: 20 years," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 0, pages 1-10.
    3. Nicolás Cachanosky, 2021. "Microfoundations and macroeconomics: 20 years," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 34(2), pages 279-288, June.
    4. Carlo Milana, 2024. "Refuting Samuelson’s capitulation on the re-switching of techniques in the Cambridge capital controversy," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 37(2), pages 179-197, June.
    5. Carlo Milana, 2024. "Refuting Samuelson’s capitulation on the re-switching of techniques in the Cambridge capital controversy," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 37(2), pages 179-197, June.
    6. Simon Bilo, 2021. "Hayek’s Theory of Business Cycles: A Theory That Will Remain Obscure?," Journal of Private Enterprise, The Association of Private Enterprise Education, vol. 36(Fall 2021), pages 27-47.
    7. Nicolás Cachanosky & Peter Lewin, 2018. "The Role of Capital Structure in Austrian Business Cycle Theory," Journal of Private Enterprise, The Association of Private Enterprise Education, vol. 33(Summer 20), pages 21-32.
    8. Cameron Harwick, 2019. "Bubbles and Broad Monetary Aggregates: Toward a Consensus Approach to Business Cycles," Eastern Economic Journal, Palgrave Macmillan;Eastern Economic Association, vol. 45(2), pages 250-268, April.
    9. Peter Lewin & Nicolas Cachanosky, 2019. "Re-switching, the average period of production and the Austrian business-cycle theory: A comment on Fratini," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 32(4), pages 375-382, December.
    10. J. Barkley Rosser, 2020. "Austrian themes and the Cambridge capital theory controversies," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 33(4), pages 415-431, December.
    11. Kazuhiro Kurose & Naoki Yoshihara, 2018. "The Heckscher—Ohlin—Samuelson Trade Theory and the Cambridge Capital Controversies: On the Validity of Factor Price Equalisation Theorem," Working Papers SDES-2018-17, Kochi University of Technology, School of Economics and Management, revised Nov 2018.
    12. Kurose, Kazuhiro & Yoshihara, Naoki, 2016. "The Heckscher-Ohlin-Samuelson Model and the Cambridge Capital Controversies," UMASS Amherst Economics Working Papers 2016-05, University of Massachusetts Amherst, Department of Economics.
    13. Carlo Milana, 2019. "Solving the Reswitching Paradox in the Sraffian Theory of Capital," Applied Economics and Finance, Redfame publishing, vol. 6(6), pages 97-125, November.
    14. Saverio M. Fratini, 2019. "A note on re-switching, the average period of production and the Austrian business-cycle theory," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 32(4), pages 363-374, December.
    15. Anthony J. Evans & Nicolás Cachanosky & Robert Thorpe, 2022. "The upper turning point in the Austrian business cycle theory," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 35(1), pages 89-97, March.
    16. Nicolás Cachanosky & Peter Lewin, 2016. "Financial Foundations of Austrian Business Cycle Theory," Advances in Austrian Economics, in: Studies in Austrian Macroeconomics, volume 20, pages 15-44, Emerald Group Publishing Limited.
    17. Michael Osborne & Ian Davidson, 2016. "The Cambridge capital controversies: contributions from the complex plane," Review of Political Economy, Taylor & Francis Journals, vol. 28(2), pages 251-269, April.
    18. Fratini, Saverio M., 2018. "A note on re-switching and the neo-Austrian concept of the average period of production," MPRA Paper 87306, University Library of Munich, Germany.
    19. George Bitros, 2010. "The theorem of proportionality in contemporary capital theory: An assessment of its conceptual foundations," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 23(4), pages 367-401, December.
    20. Nicolás Cachanosky & Alexander W. Salter, 2017. "The view from Vienna: An analysis of the renewed interest in the Mises-Hayek theory of the business cycle," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 30(2), pages 169-192, June.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:kap:revaec:v:35:y:2022:i:2:d:10.1007_s11138-020-00515-8. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.