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Carl Menger’s Contribution to Capital Theory

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  • Eduard Braun

    (Clausthal University of Technology - Institute of Management and Economics)

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, 2015. "Carl Menger’s Contribution to Capital Theory," History of Economic Ideas, Fabrizio Serra Editore, Pisa - Roma, vol. 23(1), pages 77-100.
    • Handle: RePEc:hid:journl:v:23:y:2015:1:5:p:77-100
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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(5), pages 612-612.
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    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.
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    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.
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    Cited by:

    1. 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.
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    3. 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.
    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

    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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