An Alternative Theory of Capital From An Austrian Economics Perspective

Abstract

The article introduces an alternative theory of capital. The existence and growth of an economy are described by analogy with a living organism, which exists and develops as a single whole. The parallelism of consumer and durable capital goods production processes in time in space and their complementarity along the whole production chain are introduced as building blocks. Based on the above, a new, graphical structure of an economy, which grows without net saving, is developed. Economic growth, retrogression, and reaction to externally-caused crises under the condition of a fixed monetary supply are described with its help.