Capital And Its Structure
Capitaland Its Structure
CAPITAL
AND ITS STRUCTURE
Title Page
AND ITS STRUCTURE
BY
LUDWIG M. LACHMANN
SHEED ANDREWS AND McMEEL, INC.
SUBSIDIARY OF UNIVERSAL PRESS SYNDICATE
KANSAS CITY
Copyright Page
To M.L.
This edition is published in cooperation with the programs of the Institute for Humane Studies, Inc., Menlo Park, California; and Cato Institute, San Francisco, California.
Capital and Its Structure Copyright © 1978 by the Institute for Humane Studies.
Jacket and cover design copyright © 1978 by Cato Institute, San Francisco.
Preface To The Second Edition
PREFACE
For a long time now the theory of capital has been under a cloud. Twenty years ago, when Professor Knight launched his attack on the capital theories of Boehm-Bawerk and Wicksell, there opened a controversy which continued for years on both sides of the Atlantic. Today very little is heard of all this. The centre of interest has shifted to other fields.
I. The Order Of Capital
CHAPTER I
THE ORDER OF CAPITAL
The realm of economics consists of many provinces between which, in the course of time, a fairly high degree of interregional division of labour has evolved. Naturally, development in some of these regions has been faster than in others. There are some ‘backward areas’, and a few of them actually appear to merit description as ‘distressed areas’. None seems to have a better claim to this unenviable status than the Theory of Capital.
II. On Expectations
CHAPTER II
ON EXPECTATIONS
The explicit introduction of expectations into the economic theories of the last thirty years has given rise to a host of new problems. Of these the most fundamental is the question whether expectations have to be regarded as independent ‘data’ or as the results of economic processes. As yet, economists appear to disagree on the answer; hence the unsatisfactory state of the theory of expectations.
III. Process Analysis And Capital Theory
CHAPTER III
PROCESS ANALYSIS AND CAPITAL THEORY
The theory of capital has to start from the fact that the capital goods with which entrepreneurs operate are heterogeneous. These heterogeneous capital goods have to be used together. Heterogeneity here implies complementarity in use. The mode of this complementarity, the proportions in which the various heterogeneous factors of production are being used for a given purpose, must find its expression in the Production Plan.
IV. The Meaning Of Capital Structure
CHAPTER IV
THE MEANING OF CAPITAL STRUCTURE
In what follows we shall be concerned with the question what is meant by capital structure; in what circumstances it might exist or continue to exist; what forms it might take in varying circumstances; and what effects its changes or its disappearance would have on the economic system.
V. Capital Structure And Economic Progress
CHAPTER V
CAPITAL STRUCTURE AND ECONOMIC PROGRESS
In Chapter III we saw how entrepreneurs form and dissolve capital combinations in response to the varying needs of changing situations, and how these capital combinations, embodied in plans, have to be regarded at each moment as the ‘atoms’ of the capital structure.
