Treatment of the Capital Structure as a Given Datum Is Implied Whenever We Focus on “the Quantity of Capital”

Hayek also made a point against Pigou similar to one he would make against Knight: when an economist limits his attention to stationary states, he cannot analyze how the structure of capital responds to shifts in time preference or technology. When a structure of capital, “which is the result of the equilibrating process, is treated as if it were a datum”— that is, the set of capital goods is treated as “given”— the result is a blindness to capital adjustment issues. Treatment of the capital structure as a datum is implied whenever an economist focuses exclusively on “the quantity of capital,” and whenever said “quantity” is held constant.

—Lawrence H. White, ed., editor's introduction to The Collected Works of F. A. Hayek, vol. 11, Capital and Interest, by F. A. Hayek (Chicago: University of Chicago Press, 2015), xxix.