Capital in disequilibrium : the role of capital in a changing world

A theoretical treatise is a rare event, a moment to celebrate. This is what Peter Lewin has provided in his Capital in Disequilibrium. Taking capital seriously is distinguishing mark of the Austrian School. The Austrians see capital as decisive in the wealth formation process, not just a big homogenous blob but an enormously complex structure that is heterogeneous in ways that really matter. This is how it must be in a world of relentless change where every economic decision is a speculation about an unknown future. Professor Lewin provides an excellent summary of the contributions of Bohm-Bawerk, Mises, Hayek, Rothbard, and Lachmann, and goes on to apply their theory to modern macroeconomic understanding. The topics cover range from microeconomic issues of interest rates to macroeconomic issues of business cycle. At every step, Lewin takes account of the real decisions of capital owners in a real world. In the years since its first publication the world in which we live has become even more dynamic. The pace of change has accelerated. The "digital-age" works its magic every day in the form of new products, new organizations, new production techniques, new modes of communication, and who knows what else. This increased dynamism has enhanced the relevance of the capital-based framework developed in this book. It is not possible to truly understand economic processes in a developed economy without taking full account of capital, its structure, and its role. Lewin is to be congratulated for providing the first contemporary account and thus adding to the Austrian corpus of economic understanding Title Page 4 Copyright Page 5 Table of Contents 6 Acknowledgments 8 Preface to the Second Edition 12 Introduction and Outline 16 Background: Equilibrium and Change 28 What Does Equilibrium Mean? A Discussion in the Context of Modern Austrian Ideas 30 Equilibrium and Expectations Re-Examined: A Different Perspective 46 Capital, Interest, and Profits 64 Capital in Historical Perspective 66 Modern Capital Theory 94 The Hicksian Marriage of Capital and Time 108 The Nature of Interest and Profits 124 Capital in a Dynamic World 136 Modern Mengerian Capital Theory 140 Capital and Business Organizations 162 Organizations, Money, and Calculation 192 Human Capital 208 Human Capital, the Nature of Knowledge, and the Value of Knowledge 240 Conclusion 252 Bibliography 258 Index 274