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Source link: http://archive.mises.org/5939/the-pure-theory-of-capital-by-f-a-hayek/

The Pure Theory of Capital, by F.A. Hayek

November 26, 2006 by

The Pure Theory of Capital (1941) by F.A. Hayek, Full text in PDF

My reluctance to undertake this work would have been even greater if from the beginning I had been aware of the magnitude of the task that awaited me. As at first contemplated, this study was intended as little more than a systematic exposition of what I imagined to be a fairly complete body of doctrine which, in the course of years, had evolved from the foundations laid by Jevons, Böhm-Bawerk, and Wicksell. I had little idea that this task of systematisation would uncover serious gaps in the reasoning which had yet to be bridged, and that some of the simplifications employed by the earlier writers had such far-reaching consequences as to make their conceptual tools almost useless in the analysis of more complicated situations. The most important of these inappropriate simplifications, of the dangers of which I became aware at a comparatively early stage, was the attempt to introduce the time factor into the theory of capital in the form of one single relevant time interval — the “average period of production.” But it gradually became clear that this supposed simplification evaded so many essential problems that the attempt to replace it by a more adequate treatment of the time factor raised a host of new questions which had never been really considered and to which answers had to be found.

{ 4 comments }

Robert November 28, 2006 at 6:39 am

I think Hayek’s Prices and Production has been more read and was more influential than the later Pure Theory of Capital. Would Austrians agree with this assement? If so, would that hold even among Austrians? And would you think that in this case, how relatively influential these works were reflects their contents accurately?

Daniel J. D'Amico November 28, 2006 at 5:02 pm

This is a rea treasure to finally have online. Is there anyway we can expect “Studies” and “New Studies” to appear next?

scott November 10, 2008 at 3:03 am

that was terrible. Wow, and to think he spent so much time on it. And was so uppity

dave July 4, 2010 at 12:58 am

It’s unfortunate that people are so turned off by rigorous thinking. To think that accurate thinking can somehow be considered deplorable by so many who presume to hold a higher intellectual ground is itself deplorable. Hayek’s Pure Theory of Capital is a masterpiece in the sense that it takes the Austrian theory of the business cycle to its rational limits, incorporating so many original ideas and thoroughly expounding the technical aspects of an already sophisticated line of thought. This book should be lauded for it is grand achievement rather than being mocked by so many “readers” for what I can only assume is their lack of willingness, or fortitude, or ability to see an argument through to its most comprehensive ends. I can only imagine what a tragic state we’d be in technologically had physicists given Newton’s Principia Mathematica the same tragic reception Hayek’s masterpiece gets for “being too hard”.

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