Ludwig Lachmann – Capital and Its Structure
Published in 1956, this book is a useful antidote to the Samuelsonian blackboard economics that were beginning to dominate the profession in Lachmann’s day and still do in ours. Capital is not some featureless black box that can be plugged into an equation; it is a multi-faceted, ever-changing part of the economic process that is subject to whatever an entrepreneur thinks the best use might be for a given resource at a given time. Sometimes they guess right, and sometimes they guess wrong.
Lachmann’s theory of capital doesn’t fit so well on the classroom blackboard, but it does fit human behavior. I leave it to the reader to decide which is more important.