The student who, more than thirty years after its original publication in 1941, turns to Hayek's Pure Theory of Capital cannot but be baffled by the wayward nature of the progress of economic thought, the sudden turns and twists he finds in the discussion of most economic problems, and the futility of much learned dispute. We know of course that most ideas are likely to become transformed as they are being absorbed by a growing number of minds. We have even heard of thinkers who prospered more when they were misunderstood than they otherwise might have done. But these facts account for little of what has happened to the theory of capital in recent years.
Today's reader of Hayek's book is struck, no less than was the reader of three decades ago, by the profusion of ideas and the depth of the level of comprehension the author attains. He will also be intrigued by the thought of how many of these ideas have turned up in recent controversies, though mostly in a shape noticeably different from the one they were here given originally. Yet, for all the fertility of these ideas, the theory of capital as originally set out by Hayek has made little progress in three decades. 'Our main concern will be to discuss in general terms what type of equipment it will be most profitable to create under various conditions, and how the equipment existing at any moment will be used, rather than to explain the factors which determined the value of a given stock of productive equipment and of the income that will be derived from it.' (Hayek 1941:3) A theory of capital in this sense can hardly be said to exist today. What goes by the name of 'capital theory' in our days is still mostly concerned with the