The Theory of Capital as a Theory of Capitalism – Hidden Austrian Contributions to a Historically Specific Approach to Capital

Eduard Braun

TUC Working Papers in Economics from Abteilung für Volkswirtschaftslehre, Technische Universität Clausthal (Department of Economics, Technical University Clausthal)

Abstract: Before economists and sociologists came up with their own definitions of the term “capital,” it was commonly understood as money invested in businesses by their owners or shareholders, and it continues to be understood this way in everyday business practice. In a recent article, Geoffrey Hodgson (2014) advises economists to return to this pre-Smithian usage of the term. The present paper takes up Hodgson’s demand and develops a theory of capital that is based upon this business notion of capital. It also argues that the Austrian theory of capital, if interpreted correctly, can serve as a starting point. Despite the conviction of its adherents to the contrary, the Austrian theory of capital is not universal or ahistorical, but dovetails with Hodgson’s vision of an approach to capital which analyses historically specific features of capitalism.

Keywords: Capital Theory; Capitalism; Austrian Economics; Institutional Economics (search for similar items in EconPapers)
JEL-codes: B25 B26 D24 (search for similar items in EconPapers)
Pages: 34 pages
Date: 2015
New Economics Papers: this item is included in nep-his, nep-hme, nep-hpe and nep-pke
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Persistent link: https://EconPapers.repec.org/RePEc:tuc:tucewp:0015

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