Estructura De Capital

CAPITAL
AND ITS STRUCTURE

CAPITAL
AND ITS STRUCTURE
BY
LUDWIG M. LACHMANN

SHEED ANDREWS AND McMEEL, INC.
SUBSIDIARY OF UNIVERSAL PRESS SYNDICATE
KANSAS CITY

ToM.L.
This edition is published in cooperation with the programs of
the Institute for Humane Studies, Inc., Menlo Park, California;
and Cato Institute, San Francisco, California.
Capital and Its Structure Copyright ®1978 by the Institute for
Humane Studies.
Jacket and cover design copyright © 197ft by Cato Institute, San
Francisco.
The original edition of Capital and Its Structure was published
by Bell & Sons, Ltd., on behalf of the London School of Economics
and Political Science in 1956.
All rights reserved. Printed in the United States of America.
No part of this book may be used or reproduced in anymanner
whatsoever without written permission except in the case of
reprints in the context of reviews. For information write Sheed
Andrews and McMeel, Inc., 6700 Squibb Road, Mission, Kansas
66202.

Library of Congress Cataloging in Publication Data
Lachmann, Ludwig M.
Capital and its structure.
(Studies in economic theory)
Includes bibliographical references and index.
1. Capital. I.Title. II. Series.
HB501.L223 1978 332'.O4l
77-82807
ISBN 0-8362-0740-8
ISBN 0-8362-0741-6 pbk.
Lachmann, Ludwig M

CONTENTS
CHAP.

p age
PREFACE TO THE SECOND EDITION

PREFACE
I
II

T H E ORDER O F C APITAL

v ii

xiii
1

O N EXPECTATIONS

20

III

PROCESS ANALYSIS AND CAPITAL THEORY

35

IV

T H E MEANING O F C APITAL STRUCTURE

53

C APITAL STRUCTURE ANDECONOMIC PROGRESS

72

C APITAL STRUCTURE AND ASSET STRUCTURE

86

V
VI
VII

C APITAL IN THE TRADE CYCLE

100

INDEX

129

PREFACE
For a long time now the theory of capital has been under a
cloud. Twenty years ago, when Professor Knight launched
his attack on the capital theories of Boehm-Bawerk and
Wicksell, there opened a controversy which continued for years
on bothsides of the Atlantic. Today very little is heard of all
this. The centre of interest has shifted to other fields.
In practice of course problems concerning capital have by
no means lost their interest. There can be few economists who
do not use the word 'capital' almost every day of their working
lives. But apart from some notable exceptions, economists
have ceased to ask fundamentalquestions about capital. It is
pertinent to enquire why this has happened. It would seem
that there are three major reasons to account for this curious
neglect.
In the first place, many economists have evidently come to
believe that we do not require the conceptual framework of a
theory of capital in order to discuss problems germane to
capital, or at least those problems in which practicalinterest
has of late been greatest, such as investment. In other words,
the view appears to have gained ground that a theory of capital
is not really necessary. This, as I shall attempt to show in
this book, is an erroneous view. It is hardly possible to discuss
the causes and consequences of a change in a stock without some
knowledge of the nature and composition of this stock; or, it is
onlypossible to do so if we are prepared to abstract from all
those features of the situation which really matter. In the
discussion of capital problems, as of any other problems, we
cannot dispense with a coherent frame of reference.
A second reason for the present-day neglect of the theory
of capital has probably to be sought in the contemporary
preoccupation with quantitative precision ofstatement and
argument. Most contemporary economics is presented in a
quantitative garb. This is not the place to enquire into the
reasons for this predilection. To some extent of course economists, in spending so much effort on quantifying the terms in
xiii

PREFACE
which they present their theories, wittingly or unwittingly
merely reflect the spirit of our age.
But why should such...