Capital and Time: A Neo-Austrian Theory

By J. R. Hicks | Go to book overview

XIII The Measurement of Capital—Value and Volume

1

What I hope to do, in this final Part, is to throw some light on the Controversy about Capital, which has drawn so much attention from economists in the last twenty years. I shall make no attempt to go through the literature—neither the modern literature, which has sprung from the famous articles by Joan Robinson 1 and Robert Solow, 2 nor the classical and 'neo-classical' literature which (I am convinced) lies behind it. My object is just to see what light we can get, on these disputed matters, from the work we have been doing. But it is necessary to begin more generally, insisting that the issue is a wide one, wider than it often appears. It is nothing less than an opposition between alternative concepts of capital—each, I think I can show, a respectable and useful concept of capital; or rather between families of such concepts, for within each main type there are several varieties. Part of the trouble with modern discussions is that they rarely reveal more than a part of the issue; when it is filled in it becomes more intelligible.


2

Consider (for a closed economy) the stock of real goods, commodities having value, that exists at a moment of time. Many economists would be prepared to identify that stock with the Capital of the economy; all, I think, would admit that the Capital stands in some relation to it. But even those who accept the identification will grant that for macro-economic purposes we need some single measure, by which the stock can be represented. All that we get from the physical goods is a list—so much of this, so much of that; for macro-economics there must be aggregation.

The obvious aggregate is an aggregate in value terms. Suppose that it is possible (though whether it is possible turns out to be one of the questions) to set a market price on each good in the

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Capital and Time: A Neo-Austrian Theory
Table of contents

Table of contents

  • Capital and Time iii
  • Preface v
  • Contents ix
  • Part I- Model 1
  • I- Goods and Processes 3
  • II- The Process and Its Profiles 14
  • III- Social Accounting 27
  • IV- Technique and Technology 37
  • V- Full Performance and Full Employment 47
  • VI- Steady States 63
  • II- Traverse 80
  • VII- The Standard Case and the Simple Profile 81
  • VIII- The Fixwage Path 89
  • IX- The Full Employment Path 100
  • X- Substitution 110
  • XI- Shortening and Lengthening 125
  • XII- Ways Ahead 135
  • Part III- Controversy 149
  • XIII- The Measurement of Capital—value and Volume 151
  • XIV- The Accumulation of Capital 167
  • XV- The Production Function 177
  • Appendix 185
  • Index 211
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