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Source link: http://archive.mises.org/6423/the-mythology-of-capital/

The Mythology of Capital

March 23, 2007 by

What is that medium, asked F.A. Hayek, through which the substance — commonly called capital in the abstract — can be said to be transformed from one concrete form into another? Is there such a thing, as is implied in the habitual use of terms by economists? Or is it not conceivable that the thing which they all have in mind is that condition affecting the possibilities of production which cannot be expressed in terms of a substantive quantity? To assume that under changing conditions capital will be maintained constant in any quantitative sense is to assume something which will never happen, and any deductions derived from this assumption will therefore have no application to anything in the real world. FULL ARTICLE

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