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Asevere problem arises when an economic theory, which is itself institutionfree, is applied to the reform of institutions. There is the risk that economics compromises the institutions that it and our current economic order are based upon. If economists want to avoid counterproductive reforms of fundamental institutions, they must adopt a more realistic theory of capital that incorporates the institutional framework of capitalism. This point is exemplified by the recent harmful reform of financial accounting regulation – the substitution of historical-cost with fair-value accounting – which was justified within the framework provided by neoclassical economics.

AbstractSeveral scholars anticipated Ludwig von Mises's calculation argument against socialism. The present paper summarises the contributions by the members of the German Historical School of Economics who preceded Mises and provides several examples of anticipation that have not been discussed in the literature. Furthermore, the paper explains why it is not a coincidence that members of the Historical School claimed as early as the nineteenth century that socialism was unfeasible due to calculation and knowledge problems. In their attempts to understand historically specific features of capitalism, they developed an approach to capital that involved the institutions of private property, money, the market, the enterprise, and monetary calculation. Starting from this institutional approach to capital and capitalism, it was only a small step to the question of what it means for socialist systems that those institutions are lacking.

Los principios que caracterizan el enfoque tradicional de ingresos y gastos en la contabilidad no pueden remontarse a un evento histórico particular, son racionales ecológicamente. Su funcionalidad es la consecuencia de la evolución cultural y no de un diseño humano específico. Ésta es la razón por la que los esfuerzos por defender el enfoque de activos y pasivos, avalado por los emisores de estándares, han encontrado dificultades sustanciales. Sólo este último enfoque se basa claramente en un modelo económico puntual a saber, la economía neoclásica.
En contraposición, se argumenta que una base sólida para explicar la racionalidad de los principios de contabilidad que evolucionaron culturalmente se puede encontrar en la economía del comportamiento. Estos principios están en línea con las conductas humanas que se han evidenciado en numerosos experimentos de campo y laboratorio. Es especialmente con respecto a la teoría prospectiva que se identifica un paralelo cercano.
Además, este análisis se combina con una visión del proceso de mercado en la economía. La contabilidad financiera según el enfoque de activos y pasivos no agrega nueva información al mercado, solo resume a nivel de la empresa la información proporcionada por este. Por el contrario, el enfoque de ingresos y gastos suministra información privada al mercado, al estilo de lo descrito por Hayek (1945). El enfoque de ingresos y gastos resulta, por tanto, compatible con la organización de la economía de mercado.

ZusammenfassungIm Regelfall versteht man den Sozialismus als eine kollektivistische Ideologie und daher als einen Gegenspieler des Liberalismus. Im vorliegenden Aufsatz wird ein Standpunkt ausgeleuchtet, der dieser Interpretation widerspricht. Demnach ist der Sozialismus die extreme Form des Individualismus und als solche die ideologische Fortsetzung des Liberalismus. Die marxistische Ausbeutungstheorie und der derzeitige Kampf für Minderheitenrechte – die "Identitätspolitik" – sind von individualistischen Vorstellungen beseelt. Die übliche Interpretation des Sozialismus als kollektivistisch lässt sich erklären aus der historischen Tendenz des modernen, individualistischen Staates, seine Macht im Namen der Freiheit und der Gleichheit auszudehnen und die Gesellschaft in diesem Zuge mit einer wachsenden Anzahl von bürokratischen Regeln zu überziehen, die paradoxerweise die Freiheit und die Gleichheit einschränken, die sie eigentlich garantieren sollen.

Abstract
This paper combines the market process approach developed by the Austrian School of Economics with the theory of capital as worked out by the Historical School in order to provide a suitable framework for discussing the two competing approaches to financial accounting. Within this framework, it becomes clear that the revenue-expense approach with its emphasis on actually realized, historical transactions plays an important role in creating a tendency towards market equilibrium. Net income determined according to this approach provides information to the market on where there are gaps in the price structure. The balance-sheet approach, on the other hand, and particularly fair value measurement take market equilibrium for granted. Based on fair value accounting, an equilibrium could never be accomplished in the first place. Ironically, in order to be applicable, the balance-sheet approach presupposes the perfect working of the market process, including financial reporting based on the revenue-expense approach.

Abstract
The principles characterizing the traditional revenue-expense approach to accounting cannot be traced back to a distinct event. I argue that they are ecologically rational. Their functionality is the result of cultural evolution, not of unitary human design. This is the reason why the efforts to defend them against the balance-sheet approach endorsed by standard-setters have encountered severe difficulties. Only the latter is clearly based on a coherent model of the economy, namely neoclassical economics. I further argue that a solid basis for explaining the rationale of the culturally evolved accounting principles can be found in behavioral economics. These principles are in line with human behavior as found in numerous laboratory and field experiments. It is especially with respect to Prospect Theory that a close parallel can be identified. I combine this observation with a market process view of the economy. Financial accounting according to the balance-sheet approach does not add new information to the market process; it only summarizes on the firm level information provided by the market. In contrast, the revenue-expense approach provides private information to the market à la Hayek (1945). The revenue-expense approach thus turns out to be congenial to the organization of the market economy.

AbstractBefore economists and sociologists came up with their own definitions of the term 'capital', it was commonly understood as money invested in businesses by their owners or shareholders, and it continues to be understood this way in everyday business practice. In a recent article, Hodgson (2014) advises economists to return to this pre-Smithian usage of the term. This paper takes up Hodgson's demand and develops a theory of capital that is based upon this business notion of capital. It also argues that the Austrian theory of capital, if interpreted correctly, can serve as a starting point. Despite the conviction of its adherents to the contrary, the Austrian theory of capital is not universal or ahistorical, but dovetails with Hodgson's vision of an approach to capital that analyses historically specific features of capitalism.

Abstract
This paper critiques Rothbard's ([1962] 2004. Man, Economy, and State – A Treatise on Economic Principles. Auburn, AL: Mises Institute) concept of gross investment. Rothbard introduced the concept in order to demonstrate his point that it is not consumer spending that primarily drives the economy, like the mainstream Keynesian view maintains, but the capitalists' spending. In this paper, it is argued that, contrary to Rothbard's opinion, the amount of gross investment as he defines it does not contain significant information concerning the question as to whether the capital structure of a society can be upheld or not. Instead, it is an arbitrary figure that depends on the length of the different stages of production. This problem has not been recognized by Rothbard because his exposition rests upon the assumption of an equal time length for all stages. Apparently, he has been led astray by his intention to find arguments against the importance of consumer spending in the determination of output.

Endres and Harper (2011) maintain that, within the Austrian tradition of capital theory, Carl Menger and Ludwig M. Lachmann form a distinguishable trajectory. Both these authors, they argue, consider capital as a heterogeneous structure of higher-order goods. In this comment, it is demonstrated that the opposite is true. Menger and Lachmann endorsed contrasting views on the nature of capital. Whereas Lachmann indeed adhered to a heterogeneous capital concept, Menger considered capital to be a homogeneous concept employed in economic calculation.

Judging from the tenor of some recent publications, time preference is still not generally accepted as the cause of originary interest. Up to the present day, the theory has not been formulated in a way to rest its case beyond doubt. In this paper it is argued that the time preference theory is deterministic and therefore incompatible with freedom of choice. The reason for originary interest must not be looked for in preferences, but in the logic of action itself. Based on the critique uttered in the earlier chapters, a positive and truly praxeological theory of originary interest is developed. The reason for originary interest has to be looked for in the value-spread between the psychic costs and the psychic revenues of actual human actions, not in contingent preferences.