CHAPTER VI

CAPITAL STRUCTURE AND ASSET STRUCTURE

At an early stage of our enquiry we saw that treating capital resources as heterogeneous raises a problem of order; that where the number of relationships between the heterogeneous elements is large and their nature intricate, such order takes the form of a structure; and that in the world of planned human action such structural order ultimately rests on the complementarity of the means employed in a given area of action for distinct ends.

CHAPTER VII

CAPITAL IN THE TRADE CYCLE

In what follows we shall make use of our newly acquired knowledge of structural relationships between assets in general, and capital goods in particular, in order to elucidate some problems of the Trade Cycle. By ‘Trade Cycle’ we shall mean nothing more precise than the periodic ups and downs of output, incomes, and employment to which modern industrial economies seem to be prone.

INDEX

Acceleration coefficient, 103–4

Assets, 87–99

Austrian Theory of Industrial Fluctuations, 113 et seq., 126

Boehm-Bawerk, E. v., v, 11, 73, 78 et seq.

Boulding, K. E., 88n

Capital

—accumulation (see Investment)

—coefficients, 42, 80

—complementarity, 3, 12, 54, 80, 85, 108, 117–18, 121–2

—definition of, 11—12

—division of, 79 et seq., 103, 118

BY LUDWIG VON MISES

COPYRIGHT, 1944, BY YALE UNIVERSITY PRESS

Printed in the United States of America

All rights reserved. This book may not be reproduced, in whole or in part, in any form (except by reviewers for the public press), without written permission from the publishers.

PREFACE

THE main issue in present-day social and political conflicts is whether or not man should give away freedom, private initiative, and individual responsibility and surrender to the guardianship of a gigantic apparatus of compulsion and coercion, the socialist state. Should authoritarian totalitarianism be substituted for individualism and democracy? Should the citizen be transformed into a subject, a subordinate in an all-embracing army of conscripted labor, bound to obey unconditionally the orders of his superiors?

INTRODUCTION

1.  THE OPPROBRIOUS CONNOTATION OF THE TERM BUREAUCRACY

THE terms bureaucrat, bureaucratic, and bureaucracy are clearly invectives. Nobody calls himself a bureaucrat or his own methods of management bureaucratic. These words are always applied with an opprobrious connotation. They always imply a disparaging criticism of persons, institutions, or procedures. Nobody doubts that bureaucracy is thoroughly bad and that it should not exist in a perfect world.

I

PROFIT MANAGEMENT

1.  THE OPERATION OF THE MARKET MECHANISM