The Application of the Pure Theory of Population Change to the Theory of Capital

Abstract

Böhm-Bawerk's concept of capital essentially that of a fund which supports factors of production during the period of production. — The “lake and stream” analogy, 647. — A better analogy is that of a population: capital, input, output, and the average period of production corresponding to population, births, deaths, and the average length of life, 650. — An analysis of pure population theory for a stationary state, 655; for a geometrically progressive state, 657. — Input as primarily the flow of services from all factors of production, 659. — Output as primarily the flow of services to consumers, 662. — An average period of production defined, which does not go back to any “primary” factors of production, 664. — Its length is between ten and twenty years, 665. — The existence of a period of production increases the probability of price disturbances, 666. — The concept objectively vague in a system of changing prices, but not so when considered as a subjective determinant of economic behavior, 666.