Capital, Interest, and Waiting: Controversies, Puzzles, and New Additions to Capital Theory

Prominent economists including Nassau Senior, Eugene von Bӧhm-Bawerk, Gustav Cassel, Irving Fisher, Walter Eucken, and Robert Dorfman have recognized or toyed with the idea of waiting as a factor of production, but this concept has not yet been explored in its entirety until now. In this book, Leland B. Yeager and Steve H. Hanke dive into the economic theory behind waiting and contextualize its relevance to modern-day monetary policy.

Capital, Interest, and Waiting challenges economists to reconsider capital theory. The arguments presented within the book embrace extant literature on capital theory, including the numerous controversies, puzzles, and debates crowding the subject. These debates range from the Cambridge controversies triggered by Joan Robinson’s work to the famous “reswitching” problem to a broader array of important problems in capital theory that were laid out by Walter Eucken, among others.

Leland B. Yeager and Steve H. Hanke present, discuss, and resolve these many complexities of capital theory. Chapters break new ground again and again by demonstrating how waiting is a factor of production and interest is its price. Those who read this book will challenge long-held beliefs relevant to monetary economics and reconsider their approach to capital theory.

Leland B. Yeager (1924–2018) was Ludwig von Mises Distinguished Professor Emeritus of Economics at Auburn University and Paul Goodloe McIntire Professor of Economics Emeritus at the University of Virginia. He was former president of the Southern Economic Association, the Atlantic Economic Society, the Interlingua Institute, and the Consilio of Union Mundial pro Interlingua. A distinguished American economist and polymath, Yeager is known best for his significant contributions to the fields of monetary theory, international trade, and political economy as well as his mastery of many languages, including a three-year stint as a Japanese cryptanalytic translator for the US army during WWII.

Steve H. Hanke is Professor of Applied Economics and Founder and Co-Director of the Institute for Applied Economics, Global Health, and the Study of Business Enterprise at The Johns Hopkins University in Baltimore. Hanke was also a member of the faculties at the Colorado School of Mines and the University of California, Berkeley. He served on President Reagan’s Council of Economic Advisers and as an adviser to five foreign heads of state and five foreign cabinet ministers. Hanke holds eight honorary doctorate degrees and is an honorary professor at four foreign institutions. He was President of Toronto Trust Argentina in Buenos Aires, the world’s best-performing emerging market mutual fund in 1995. Hanke is known as the “Money Doctor” for his work as the architect of numerous currency reforms.