Algumas verdades "austriacas"

Study Guide to "Man, Economy, and State" Robert P. Murphy

4. Capital Accumulation and the Length of the
Structure of Production

Böhm-Bawerk demonstrated that longer, wisely chosen processes would always be more physically productive than shorter processes. That is, the quantity of physical output from a given input could always be increased by investing the input in a longer process. This of course does not mean that every longer process will be more physically productive, but merely that there always exists at least one such process (that is both longer and more productive).

5. The Adoption of a New Technique

Other things equal, actors prefer to achieve their consumption goals sooner rather than later. Consequently, they will first exploit the shortest processes, i.e., the ones that involve the least amount of waiting time. The only reason an actor would invest his resources in a longer process is that it promises a greater quantity of output. It is time preference that acts as the ultimate “brake” on engaging in indefinitely lengthy processes.

Thus, because of a process of selection, at any given time there are always lengthier, more productive processes “on the shelf,” that have not been yet exploited because of the waiting involved. For this reason, new savings (and investment) can always yield a higher return to the original factors (after the required delay). Thus capital accumulation alone, even without scientific discoveries or other technological advances, can allow for a continual rise inthe standard of living.

6. The Beneficiaries of Saving-Investment

When land and labor factors are invested in lengthierprocesses, their physical output is greater, leading (eventually) to higher per capita consumption. Net investment (and the corresponding aggregate profits) allow for temporary gains to the investors, but ultimately all increases in productivity will be imputed to the land and labor factors (raising rents and wages).

7. The Progressing Economy and the Pure Rate of
Interest

An increase (decrease) in gross investment can only occur because of an antecedent drop (rise) in time preferences, which will also cause a drop (rise) in the pure rate of interest.