An Elaboration of the Theory of Capital Is a Prerequisite for a Thorough Disposal of Keynes’s Argument

I ought to explain why I failed to return to the charge after I had devoted much time to a careful analysis of his writings—a failure for which I have reproached myself ever since. It was not merely (as I have occasionally claimed) the inevitable disappointment of a young man when told by the famous author that his objections did not matter since Keynes no longer believed in his own arguments. Nor was it really that I became aware that an effective refutation of Keynes’s conclusions would have to deal with the whole macroeconomic approach. It was rather that his disregard of what seemed to me the crucial problems made me recognize that a proper critique would have to deal more with what Keynes had not gone into than with what he had discussed, and that in consequence an elaboration of the still inadequately developed theory of capital was a prerequisite for a thorough disposal of Keynes’s argument. 

So I started on this task intending it to lead to a discussion of the determinants of investment in a monetary system. But the preliminary ‘pure’ part of this work proved to be much more difficult, and took me very much longer, than I had expected. When war broke out, making it doubtful that publication of such a voluminous work would be possible, I put out as a separate book what had been meant as a first step of an analysis of the Keynesian weaknesses, which itself was indefinitely postponed.⁷

__________

⁷F. A. Hayek, The Pure Theory of Capital

—F. A. Hayek, “The Keynes Centenary: The Austrian Critique,” in The Collected Works of F. A. Hayek, vol. 9, Contra Keynes and Cambridge: Essays, Correspondence, ed. Bruce Caldwell (Indianapolis: Liberty Fund, 1995), 251-252.