Ludwig Lachmann’s Capital and its Structure at its 70-year publication anniversary

Abstract Ludwig M. Lachmann published the first edition of Capital and its Structure in 1956, coming up to its seventieth publication anniversary. This work was an important milestone in his academic career cementing his pwrticular epistemology to his now iconic theory of Capital. The early reception of Lachmann’s work by Austrian scholars varied widely from admiration to severely critical. But current Austrian scholars are much more approving and appreciative of his work in general and of his capital theory in particular. In this paper we show how Lachmann’s approach to capital theory lends itself to the concept of Macaulay’s Duration (Hicks’s average period) and to “capital as finance.” When one incorporates such financial concepts into the Austrian tradition, we can grasp a better understanding of forward-looking, entrepreneurial attempts to create value.