LIBERTAS Vol. 6, Num. 1

El Volumen 6, Número 1 de LIBERTAS: Segunda Época está dedicado al 150 aniversario de la Escuela Austriaca.


[1] Introducción al número especial: 150 Aniversario de la Escuela Austriaca
Wenceslao Giménez Bonet

[2] The Austrian School: 150 Years
Nicolás Cachanosky

[3] Introduction to Juan C. Cachanosky’s The Great Depression
Peter Lewin

[4] The Great Depression
Juan C. Cachanosky

[5] Capital: Three-Dimensionally Speaking
Peter Lewin and Nicolás Cachanosky

[6] Uber y la Economía Colaborativa: Un Caso de Regulación Cautiva
Facundo Guadagno y Santiago Ferraro

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Interview with Bob Muprhy

Check my interview with Bob Murphy. We talked about my work with Peter Lewin financial applications to capital theory and its implications for the austrian business cycle theory, fractional reserve banking, and how the Fed “broke” the usual way to perform monetary policy.

Access the interview here.

Austrian Capital Theory: A Modern Survey of the Essentials

For some time now, Peter Lewin and I have been working on the implications of applying finance to capital theory. This work has taken place mostly in journal articles.

We now offer a short book on the historical development of Austrian Capital Theory (ACT). This book is a part of the new “Elements” series by Cambridge University Press. The book is part of Elements in Austrian Economics edited by Peter Boettke.

The book is scheduled to be published in January (2019), but is already available to pre-order.

Book description

This Element presents a new framework for Austrian Capital Theory, starting from the notion that capital is value. Capital is the value attributed by the valuer at any moment in time to the combination of production-goods and labor available for production. Capital is the result obtained by calculating the current value of a business-unit or business-project that employs resources over time. It is the result of a (subjective) entrepreneurial calculation process that relates the flow of consumptions goods to the value of the productive resources that will produce those consumptions goods. The entrepreneur is a ubiquitous calculating presence. In a review of the development of Austrian Capital Theory, by Carl Menger, Eugen von Böhm-Bawerk, Ludwig von Mises, Friedrich Hayek, Ludwig Lachmann as well as recent contributions, the Element incorporates the seminal contributions into the new framework in order to provide a more accessible perspective on Austrian Capital Theory.

WP: Hayek’s Average Period of Production (A step forward and a missed opportunity)

Latest work with Peter Lewin, Hayek centered, for a forthcoming Hayek Companion edited volume by Rosolino Candela.

One of Hayek’s most important contributions is his work on capital theory and business cycles as presented in Prices and Production. Hayek made significant contributions in this field. Significant contribution, however, usually are not free of issues. In this chapter, we discuss the distinctive characteristics of Hayek’s work on capital theory and how the questions his treatment raised can be answered with modern financial calculations. We also discuss Hayek’s work on capital theory after Prices and Production.

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WP: The Role of Capital Structure in ABCT

En este corto paper junto a Peter Lewin resumimos nuestro trabajo en teoría del capital y ciclos económicos que hemos realizado en los últimos dos o tres años. Este paper fue para un panel especial sobre el rol de la teoría del capital en la teoría austriaca del ciclo económico. Para los interesados en una lectura corta y no técnica sobre nuestro trabajo en temas de ciclos, este paper es un buen resumen.

We argue that the application of financial analysis, especially that of duration, clarifies and supports the application of the average period of production in ABCT. We also suggest that the focus in the recent ABCT literature should be more on the average period of production (APP) and less in the stages of production as depicted in Hayek’s triangle in Garrison’s model.

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WP: Value and Capital: Austrian Capital Theory, Retrospect and Prospect

Último paper co-escrito con Peter Lewin: Value and Capital: Austrian Capital Theory, Retrospect and Prospect. En esta ocasión resumimos contribuciones de nuestros trabajo conjunto con énfasis en una audiencia austriaca. Resaltamos aspectos de la teoría del capital que, creemos, merecen un nuevo foco de atención, especialmente con los aportes que el cálculo financiero puede traer a la economía.


The time is right for a reexamination of Austrian capital-theory. We attempt to capture the essence of Carl Menger’s approach to capital, highlighting the important distinction between goods and the valuable services they yield (implying that goods are valuable only because they yield valuable services) and highlighting also the importance of money in facilitating exchange and production and in providing the means to value them. We look at the capital-theory of Böhm-Bawerk and suggest that, in many respects, this was a wrong turn, although it did set in motion valuable efforts to clarify the importance of the heterogeneity of productive-resources and their growing complexity over time. We examine the production-function, micro and macro, and show that it is logically untenable and useless as an instrument for empirical investigation, and that this has been known for decades. Of the Austrians after Menger, only Mises followed Irving Fisher in focusing on valuation. He did so in the context of explaining the importance of calculation. Mises’s approach to capital has been insufficiently understood and appreciated. By way of conclusion we draw from our considerations to provide a research agenda in Austrian capital theory.

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WP: Ludwig Von Mises’s Approach to Capital as a Bridge between Austrian and Institutional Economics

New working paper with Eduard Braun and Peter Lewin about how Mises’s treatment of the concept of “capital” can be a bridge between Austrian Economics and Institutional Economics.


Ludwig von Mises seems to be something of an outlier within the Austrian school when it comes to capital – though his position is clearly foreshadowed in a neglected article by Carl Menger (1888). In this paper we examine Mises’s view on capital and suggest that it constitutes a bridge between Austrian and institutional economics. As an outflow of Mises’s approach, an incipient financial approach may be discerned, an approach to capital that integrates concepts from financial theory into a broader view of capital that contains both institutional and Austrian elements.

Download the paper from SSRN.

WP: Putting Capitalism back into Capital

Working paper junto a Peter Lewin donde una vez más trabajamos con la interesección entre finanzas y teoría del capital. En esta ocasión ponemos la atención en un intercambio entre Hodgson y Braun sobre la importancia de entender “capital” con un punto de vista financiero.

En nuestro paper seguimos la recomendación en general del Hodgson y Braun pero extendemos su aplicación haciendo uso de conceptos financieros como duration.


We agree with the recommendations of Hodgson (2014) and Braun (2015) to shift the focus away from capital as physical production-goods back to the common-sense and historical understanding of capital as money-borrowed for the purpose of acquiring productive resources to produce value. Much controversy, obscurity and confusion might have been avoided with this focus. The colloquial understanding of capital as financial-capital is to preferred to thinking of capital as a collection of physical things. A consideration of the role of time in production brings one to the realization that capital is the result of a process of evaluation, the result of ‘capital-accounting’. It is the ability to use capital-accounting that is in large part responsible for the phenomenal success of capitalism. Productive physical resources are all capital-goods, or preferably production-goods. They are different types of production-goods, human or non-human, and constitute a stock of potential value over time.

Acceder al paper en SSRN.