Ahiakpor bids us read (and believe) the following from Clark's attack on
Boehm-Bawerk:
"For the common and practical conception of capital as a
permanent fund or amount of wealth expressible in money, -- thought not
actually embodied in money, -- there is substituted (by Boehm-Bawerk) the
conception of
concrete goods, distinguishable from others by reason of the place that
they occupy in the order of industrial production ... This course has
entailed confusion in the writings of each one who has adopted it, and
it has caused needless controversies between different writers" (1893,
306)."
That of course is vintage Clark. Rereading it does not make it more
persuasive.
It seems to me that it is helpful here to distinguish intrinsic and
extrinsic value. B-B's capital has intrinsic value. Clark includes paper
claims to goods in general, which he endows with a kind of Rosicrucian
immortality.
The capital of society as a whole is the sum of the intrinsic values. Paper
claims, on the other hand, are generally layered and pyramided and add up to
more than the sum of intrinsic values. As to flows, there are speculations
in derivatives and foreign exchange etc. that go way beyond transfers of
real wealth.
In addition, paper claims include claims to landownership, to quotas and
licenses granted by politicians, etc., which are not capital in the sense of
man-made additions to social wealth. Clark's conflating of extrinsic with
intrinsic values is part of his enduring campaign to conflate landownership
and licenses, et al., with social capital.
They are also part of his world-view that social wealth is simply the sum of
individual (including corporate) claims to wealth. I am not aware that he
ever discussed slavery, but if he did you can infer what he would have said
about the Emancipation Proclamation. To push that a little farther (perhaps
too far, to illustrate a point) suppose The Mafia incorporated and sold
shares, before long Clark might well include their market value with his
kind of capital. Moderns would chime in and call it an "efficient market" so
long as no one could profit by further arbitrage in the shares.
B-B's emphasis on intrinsic values is more consistent with a study of social
economy than Clark's emphasis on extrinsic values. Accordingly, one might
say that the Austrians, or at least B-B, were more socially minded than
Clark, Knight, and their followers. It is thus perhaps a mistake to fault
Austrians in general for excessive individualism. Or at least we should ask
"Which Austrian", and "Compared to whom?"
Mason Gaffney
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