I am currently reading the first volume of Murray Rothbard’s Economic Thought Before Adam Smith, but after finishing with this book (hopefully by the end of December, since that is technically when we’re supposed to start discussing it, right?) I want to go into capital theory. I have Hayek’s The Pure Theory of Capital. I had started it before and then put it down, but I think I’m going to finish it this time as I want to work on my knowledge on capital theory. But, as I understand Hayek ammended his opinions after publishing The Pure Theory of Capital. So, after reading Hayek’s work, I want to read another book on capital which would effectively solidify my grasp on “basic” (not elementary, but basic in the sense that I would generally have the picture after reading it) Austrian capital theory. What is the best book on capital, in this regards?
If you really want to understand Austrian capital theory, there are two books that are, in my opinion, essential. These are “Capital and its Structure,” by Ludwig Lachmann, and “Capital in Disequilibrium,” by Peter Lewin. The first is a classic, like Hayek’s Pure Theory, and the second is a modern exposition and application of the theory. Lewin’s book is written quite well, and the denser sections can probably be skipped, so it is not too difficult of a read, but Lachmann’s work can be dense.
Of course, the other classic is Bohm-Bawerk’s work, although some of his ideas set Austrian thought on the wrong course.
I read a good portion of Lachmann’s work and would also recommend it. A free PDF version can be found online, which is double plus good.
I’m now interested in Lewin’s book, I haven’t heard of it before. I’ll have to pick it up.
Good luck with trying to do that. It’s very expensive ($200 or so) unless you can get it through a library or some other means. It contains a great, brief history of capital theory, and intriguing applications to theories of the firm. I have a review of it on my blog, by the way.
I first bought Hayek’s book, but was unable to digest it as the discussion was completely abstract.
I also tried Lachmann’s but the result was the same.
The one I’d avoided, Bohm-Bauwerk’s, turned out to be exactly what I was looking for. He wrote in plain English (well, German actually, but the translation is very well done) evidently aimed at an audience not already steeped in economics. Yes, parts of his theory have since been rejected, but those are well-documented and easy to find. I don’t think you’d find it a waste of time at all.