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Carl Menger’s Contribution to Capital Theory

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Abstract

The common interpretation of Carl Menger’s take on capital theory rests upon a few sentences in his Principles of Economics. His later monograph on the topic, Zur Theorie des Kapitals (A contribution to the theory of capital), is more or less ignored, although it must be seen as a recantation of his earlier views. As it becomes clear in this work, Menger would have opposed all attempts to define capital as a heterogeneous structure of higher-order goods – a definition that is associated with his name today. In his opinion capital is a homogeneous concept stemming from accounting practices. The debate about Menger’s view on capital does not only concern terminological points, but involves the subject matter of capital theory. A theory of capital based on Menger’s later view would concentrate on the way the market economy is organized and not on technical characteristics of a multi-stage production process.

Suggested Citation

  • Eduard Braun, 2013. "Carl Menger’s Contribution to Capital Theory," TUC Working Papers in Economics 0011, Abteilung für Volkswirtschaftslehre, Technische Universität Clausthal (Department of Economics, Technical University Clausthal).
  • Handle: RePEc:tuc:tucewp:0011
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    References listed on IDEAS

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    1. Frank H. Knight, 1936. "The Quantity of Capital and the Rate of Interest: II," Journal of Political Economy, University of Chicago Press, vol. 44, pages 612-612.
    2. Jacques-Laurent Ravix, 2006. "l'opposition entre Menger et Böhm-Bawerk sur la théorie du capital et de la production," Post-Print halshs-00462572, HAL.
    3. Andrés Álvarez & Vincent Bignon, 2013. "L. Walras and C. Menger: two ways on the path of modern monetary theory," The European Journal of the History of Economic Thought, Taylor & Francis Journals, vol. 20(1), pages 89-124, February.
    4. Erich Streissler, 1972. "To What Extent Was the Austrian School Marginalist?," History of Political Economy, Duke University Press, vol. 4(2), pages 426-441, Fall.
    5. Frank H. Knight, 1936. "The Quantity of Capital and the Rate of Interest: I," Journal of Political Economy, University of Chicago Press, vol. 44, pages 433-433.
    6. Braun, Eduard, 2014. "The Menger–Lachmann Trajectory On Capital: A Comment On Endres And Harper," Journal of the History of Economic Thought, Cambridge University Press, vol. 36(1), pages 97-102, March.
    7. George J. Stigler, 1937. "The Economics of Carl Menger," Journal of Political Economy, University of Chicago Press, vol. 45, pages 229-229.
    8. Mikael Stenkula, 2003. "Carl Menger and the network theory of money," The European Journal of the History of Economic Thought, Taylor & Francis Journals, vol. 10(4), pages 587-606.
    9. Charles A. Tuttle, 1903. "The Real Capital Concept," The Quarterly Journal of Economics, Oxford University Press, vol. 18(1), pages 54-96.
    10. Richard Arena & Sandye Gloria-Palermo, 2008. "Menger and Walras on Money: A Comparative View," History of Political Economy, Duke University Press, vol. 40(2), pages 317-343, Summer.
    11. Endres, Anthony M. & Harper, David A., 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, Cambridge University Press, vol. 33(3), pages 357-384, September.
    12. Andres Alvarez, 2004. "Learning to choose a commodity-money: Carl Menger's theory of imitation and the search monetary framework," The European Journal of the History of Economic Thought, Taylor & Francis Journals, vol. 11(1), pages 53-78.
    13. Yukihiro Ikeda, 2008. "Carl Menger's monetary theory: A revisionist view," The European Journal of the History of Economic Thought, Taylor & Francis Journals, vol. 15(3), pages 455-473.
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    Cited by:

    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. 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.
    3. Ferdinando Meacci & Carmelo Ferlito, 2018. "The classical roots of the Austrian theory of capital and entrepreneurship," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 31(3), pages 315-339, September.
    4. Peter Lewin & Nicolás Cachanosky, 2018. "Value and capital: Austrian capital theory, retrospect and Prospect," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 31(1), pages 1-26, March.

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    More about this item

    Keywords

    Carl Menger; Capital Theory; History of Economic Thought;
    All these keywords.

    JEL classification:

    • B1 - Schools of Economic Thought and Methodology - - History of Economic Thought through 1925
    • B53 - Schools of Economic Thought and Methodology - - Current Heterodox Approaches - - - Austrian
    • E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Investment; Capital; Intangible Capital; Capacity

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