Episode Synopsis "7. Capital, Interest and the Structure of Production"

The seventh of ten lectures from Joseph Salerno's Introduction to Austrian Economic Analysis seminar.All action takes time. Humans use time as a tool. Time preference ranking is now, not later, although time preferences will differ over time and for different people, like children who want things right now.Capitalists give up present money in order to pay labor present wages and in order to acquire the resources for the capital production stages. The capitalist has an expectation of future money at the end of the stages of the structure of production.  Consumption and investment takes place in every stage of production.  The capitalist can only invest. He cannot yet consume. The price spread is the difference between what the capitalist invests and what he receives. The interest rate determines what the capital value of the machine is.

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More episodes of the podcast Introduction to Austrian Economic Analysis

• 1. Scarcity, Choice, and Value
• 2. Exchange and Demand
• 3. The Determination of Prices
• 4. Price Controls: Case Studies
• 5. Profit, Loss and the Entrepreneur
• 6. Pricing of the Factors of Production and the Labor Market
• 7. Capital, Interest and the Structure of Production
• 8. Competition and Monopoly
• 9. Money and Prices
• 10. Banking and the Business Cycle