CARL MENGER AND HIS FOLLOWERS IN THE AUSTRIAN TRADITION ON THE NATURE OF CAPITAL AND ITS STRUCTURE

We examine various, sometimes divergent, conceptions of capital and its structure in the Austrian tradition from Menger (1871) to Lachmann (1956). We outline Menger’s methodological and philosophical position that recommends investigating the morphology of capital—its shape, form, and structure; it also recommends maintaining some “realisticness” in the treatment of capital in economics. Prominent Austrian contributions are examined and compared along various dimensions: the existence or otherwise of “original” factors of production; time conceptions; analytical domain assumptions; real and money capital doctrines; the causal role of the entrepreneur in creating capital; and the fundamental question of capital aggregation into a stock or fund. We consider the extent to which Menger’s avowed followers and successors diverged from his original vision of capital, subsequent consequences for the development of Austrian capital theory, and implications of Mengerian structural analysis for the study of capital more generally.