Carl Menger’s revisited theory of capital in opposition to the Classical and Marginalist scholars’
DOI:
https://doi.org/10.30800/mises.2021.v9.1430Keywords:
capital theory, economic calculation, history of economic thought, marginalist revolution, austrian school of economicsAbstract
Among several contributions, Carl Menger proposed a division of economic goods in orders. This sets the foundations for the Austrian capital theory, usually maintained as a complex of higher orders goods in a production process. Curiously, Menger dismissed this concept of capital, in favor of one used in common parlance. This change of view is often overlooked, but represents a turning point in the field of capital theory. This paper assesses how Menger's popular notion of capital differs from the scientific one. To achieve this goal, we investigate the concept of capital in Classical and Marginalist economists. One of the implications is that the popular concept is related to the theory of capitalism. Capital, as used in business language for economic calculations, is better suited for analyzing the capitalist system, as it captures the usage in monetary economies and business accounting.
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