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Capital and Its Structure
Book
- GenresEconomics
130 pages, Hardcover
First published January 1, 1956
10 people are currently reading
112 people want to read
About the author
Ludwig Lachmann
10 books14 followersGerman economist who became a member of and important contributor to the Austrian School of economics.
He grew to believe that the Austrian School had deviated from Carl Menger's original vision of an entirely subjective economics. To Lachmann, Austrian Theory was to be characterized as an evolutionary, or "genetic-causal", approach against the equilibrium and perfect knowledge found in mainstream Neoclassical economics.
Lachmann's "fundamentalist Austrianism" was rare—few living Austrian economists saw their work as departing from the mainstream. He underscored what he viewed as distinctive from that mainstream: economic subjectivism, imperfect knowledge, the heterogeneity of capital, the business cycle, methodological individualism, alternative cost and "market process". His brand of Austrianism now forms the basis for the "radical subjectivist" strand of Austrian Economics.
His work was highly influential upon later, American developments of the Austrian School.
He was also a strong advocate of using hermeneutic methods in the study of economic phenomena.
He grew to believe that the Austrian School had deviated from Carl Menger's original vision of an entirely subjective economics. To Lachmann, Austrian Theory was to be characterized as an evolutionary, or "genetic-causal", approach against the equilibrium and perfect knowledge found in mainstream Neoclassical economics.
Lachmann's "fundamentalist Austrianism" was rare—few living Austrian economists saw their work as departing from the mainstream. He underscored what he viewed as distinctive from that mainstream: economic subjectivism, imperfect knowledge, the heterogeneity of capital, the business cycle, methodological individualism, alternative cost and "market process". His brand of Austrianism now forms the basis for the "radical subjectivist" strand of Austrian Economics.
His work was highly influential upon later, American developments of the Austrian School.
He was also a strong advocate of using hermeneutic methods in the study of economic phenomena.
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Displaying 1 of 1 review
August 3, 2024
AN AUSTRIAN ECONOMIST LOOKS AT THE "FUNDAMENTAL PROBLEMS OF CAPITAL”
Ludwig Lachmann (1906-1990) was a German economist who was a member of the Austrian School. This book was originally published in 1956. He wrote in the Preface to the second edition, "This book deals with the stock of social capital and its structure, not with income accruing to the various classes of its owners."(Pg. viii) He explained in the original Preface, "The chief object of this book is ... to outline a new approach and to show that it can be applied... and, above all, to emphasize the transmission of knowledge, the interaction of minds, as the ultimate agent of al economic processes." (Pg. xv-xvi)
He states, "this subjectivism of interpretation is something altogether different from the subjectivism of want which underlies our utility theory. The former yields provisional judgments to be confirmed by later experience, imperfect knowledge capable of being perfected. The latter can provide us with no new knowledge: we either have a want or do not have it." (Pg. 21)
He argues, "the results of past mistakes are there not merely to provide lessons, but to provide resources. In revising our expectations we not only have the knowledge, often dearly bought, of past mistakes ... to learn from, but also their physical counterpart, malinvested capital. Malinvested capital is still capital that can be adapted to other uses. This is the main problem of the theory of capital in a world of unexpected change." (Pg. 25)
He also asserts, "History shows that whenever left sufficiently free from political interference to evolve its responses to such challenges, the market economy has 'grown' the institutions necessary to deal with them. In particular, it has evolved institutions to protect the integrating forces of the price system from the disintegrating forces just described. Among these institutions 'forward markets' and the 'Stock Exchange' call for our particular attention." (Pg. 67)
Lachmann's works are of interest to anyone studying Austrian economics.
Ludwig Lachmann (1906-1990) was a German economist who was a member of the Austrian School. This book was originally published in 1956. He wrote in the Preface to the second edition, "This book deals with the stock of social capital and its structure, not with income accruing to the various classes of its owners."(Pg. viii) He explained in the original Preface, "The chief object of this book is ... to outline a new approach and to show that it can be applied... and, above all, to emphasize the transmission of knowledge, the interaction of minds, as the ultimate agent of al economic processes." (Pg. xv-xvi)
He states, "this subjectivism of interpretation is something altogether different from the subjectivism of want which underlies our utility theory. The former yields provisional judgments to be confirmed by later experience, imperfect knowledge capable of being perfected. The latter can provide us with no new knowledge: we either have a want or do not have it." (Pg. 21)
He argues, "the results of past mistakes are there not merely to provide lessons, but to provide resources. In revising our expectations we not only have the knowledge, often dearly bought, of past mistakes ... to learn from, but also their physical counterpart, malinvested capital. Malinvested capital is still capital that can be adapted to other uses. This is the main problem of the theory of capital in a world of unexpected change." (Pg. 25)
He also asserts, "History shows that whenever left sufficiently free from political interference to evolve its responses to such challenges, the market economy has 'grown' the institutions necessary to deal with them. In particular, it has evolved institutions to protect the integrating forces of the price system from the disintegrating forces just described. Among these institutions 'forward markets' and the 'Stock Exchange' call for our particular attention." (Pg. 67)
Lachmann's works are of interest to anyone studying Austrian economics.
Displaying 1 of 1 review