Books / Digital Text

Quarterly Journal of Austrian Economics 19, no. 2 (Summer 2016)

Howden (2016) dedicates a large part of his response to criticizing my way of dealing with and classifying the concept of opportunity costs in my book (Braun, 2014). I must start by saying that the main arguments in my book do not depend on my approach to the cost problem. The main reason why I considered it necessary to abandon the opportunity cost concept is that I found it impossible to apply it to the analysis of human action in the passing of time. For this purpose, the concept of costs as employed in business life, where profits are traditionally not calculated on the basis of opportunity costs but as historically incurred monetary expenses, are much more useful. It appeared to me that if “the interest rate expresses itself in the difference between income and costs at each stage” (Huerta de Soto, 2012, p. 557), the costs must not be understood as foregone opportunities but as historical outlays.