Carl Menger’s revisited theory of capital in opposition to the Classical and Marginalist scholars’
Keywords:capital theory, economic calculation, history of economic thought, marginalist revolution, austrian school of economics
Among several contributions, Carl Menger proposed a division of economic goods in orders. This sets the foundations for the Austrian capital theory, usually maintained as a complex of higher orders goods in a production process. Curiously, Menger dismissed this concept of capital, in favor of one used in common parlance. This change of view is often overlooked, but represents a turning point in the field of capital theory. This paper assesses how Menger's popular notion of capital differs from the scientific one. To achieve this goal, we investigate the concept of capital in Classical and Marginalist economists. One of the implications is that the popular concept is related to the theory of capitalism. Capital, as used in business language for economic calculations, is better suited for analyzing the capitalist system, as it captures the usage in monetary economies and business accounting.
BÖHM-BAWERK, Eugen von. Kapital und Kapitalzins: Positive Theorie des Kapitales, zweite Abteilung, zweiter Band. Jena: Gustav Fischer, 1921.
BRAUN, Eduard. Carl Menger's Contribution to Capital Theory. History of Economic Ideas, v. 23, n. 1, 2015.
BRAUN, Eduard. Carl Menger: Contribution to the Theory of Capital (1888). Journal of Institutional Economics, v. 5, n. 16, 2020.
BRAUN, Eduard. The Theory of Capital as a Theory of Capitalism. Journal of Institutional Economics, v. 13, n. 2, 2017.
BRAUN, Eduard; LEWIN, Peter; CAHANOSKY, Nicolás. Ludwig von Mises's Approach to Capital as a Bridge between Austrian and Institutional Economics. Journal of Institutional Economics, v. 12, n. 4, 2016.
ENDRES, Anthony, and HARPER, David. Carl Menger and His Followers in the Austrian Tradition on the Nature of Capital and Its Structure. Journal of the History of Economic Thought, v. 33, n. 3, 2011.
FETTER, Frank Albert. Recent Discussion of the Capital Concept. Quarterly Journal of Economics, 1900.
FISHER, Irving. Precedents for Defining Capital. Quarterly Journal of Economics, v. 18, n. 3, 1904.
FISHER, Irving. What is Capital? The Economic Journal, v. 6, n. 24, 1896.
HAMBERGER, Klaus. Böhm-Bawerk, Jevons and the 'Austrian' theory of capital: 'a quite different relation'. The European Journal of the History of Economic Thought, v. 8, n. 1, 2001.
HAYEK, Friedrich August von. Carl Menger. Economica, v. 1, n. 4, 1934.
HAYEK, Friedrich August von. The Pure Theory of Capital. Chicago: University of Chicago Press, 1941.
HICKS, John. Capital Controversies: Ancient and Modern. The American Economic Review, v. 64, n. 2, 1974.
HODGSON, Geoffrey M. What is capital? Economists and sociologists have changed its meaning: should it be changed back? Cambridge Journal of Economics, v. 38, n. 5, 2014.
JEVONS, William Stanley. The Theory of Political Economy. New York: Sentry Press, 1965 .
KEYNES, John Maynard. The General Theory of Employment, Interest, and Money. London: Macmillan and Co., 1936.
LEWIN, Peter. Capital in Disequilibirum. The Role of Capital in a Changing World. Auburn: Ludwig von Mises Institute, 2011.
LEWIN, Peter; CACHANOSKY, Nicolás. Austrian Theory of Capital. A Modern Survey of the Essentials. Cambridge: Cambridge University Press, 2019.
MENGER, Carl. Grundsätze der Volkswirtschaftslehre. Wien: Wilhelm Braumüller, 1871.
MENGER, Carl. Zur Theorie des Kapitals. Jahrbücher für Nationalökonomie und Statistik, v. 17, 1888.
MILL, John Stuart. Principles of Political Economy: with some of their applications to social philosophy. London: Longmans, Green, Reader, and Dyer, 1871 .
MISES, Ludwig von. Human Action: A Treatise on Economics. New Haven: Yale University Press, 1949.
OLIVA, Gabriel. The Capital Controversy of Hayek-Knight. MISES: Interdisciplinary Journal of Philosophy, Law and Economics, v. 3, n. 2, 2015.
PETRZAK, Yannis. An Outline of Carl Menger's Capital Theory 1867–1888. Paper presented at the Austrian Student Scholars Conference 2020, Grove City, 2020.
RICARDO, David. The Principles of Political Economy and Taxation. London: J. M. Dent and Sons Ltd, 1937 .
SILVA, Felipe Rosa da; BRANDA, Domingos Crosseti; FEISTEL, Paulo Ricardo. A Teoria do Capital e o Papel da Poupança Voluntária na Criação de Vantagens Comparativas em Bens Intensivo-Capital. MISES: Revista Interdisciplinar de Filosofia, Direito e Economia, v. 2, n. 2, 2014.
SMITH, Adam. An Inquiry into the Nature and Causes of the Wealth of Nations. Indianapolis: Liberty Press, 1981 .
WALRAS, Leon. Elements of Pure Economics or the Theory of Social Wealth London: Allen and Unwin, 1954 .
How to Cite
Copyright (c) 2021 MISES: Interdisciplinary Journal of Philosophy, Law and Economics
This work is licensed under a Creative Commons Attribution 4.0 International License.
This Journal is licensed under a Creative Commons Attribution 4.0 International License.