I don't understand why Mises, and every other Austrian School economist that I have read, thinks of waiting not as a factor of production, but as something else that they never explain.
Human Action by Ludwig von Mises: The operation of this market would stop if a situation were ever to emerge in which the sum of the prices of the complementary factors of production--but for interest--equaled the prices of the products and nobody believed that further price changes were to be expected.
The operation of this market would stop if a situation were ever to emerge in which the sum of the prices of the complementary factors of production--but for interest--equaled the prices of the products and nobody believed that further price changes were to be expected.
Why is everything else that goes into the production of something a factor of production except the waiting of the capitalist? I think that it would be a lot better to just think of waiting as yet an other factor of production, like labor and so on. If you don't think of it that way, you are just hypostatizing it from the rest of your system.
I think that the reason why people don't think of it as a factor of production probably has something to do with the history of economics, like because some economists used to think that "interest" was just exploitation, not something that we can't get rid of or whatever. But I think that we should complete the movement away from thinking that interest is just exploitation by including its cause, the fact that someone needs to wait for the return, as a factor of production, just like everything else.
If I wrote it more than a few weeks ago, I probably hate it by now.
http://mises.org/daily/1369
When an entrepreneur invests in factors of production that will yield consumption goods in one decade, he earns an interest dividend because presently available goods have a higher subjective value than future goods. When he purchases the factors of production, he really is exhausting the full market price of the consumption goods that they will eventually yield. However, at the moment when he actually buys the factors, those consumption goods are only future goods, and consequently their market price at that moment is less than what their market price will be when the entrepreneur actually sells them to consumers. In short, the entrepreneur is only paying for land, labor, and capital goods. He does not need to buy an additional input called "abstinence. - Robert P. Murphy
Where there is no property there is no justice; a proposition as certain as any demonstration in Euclid
Fools! not to see that what they madly desire would be a calamity to them as no hands but their own could bring
nirgrahamUK: http://mises.org/daily/1369 When an entrepreneur invests in factors of production that will yield consumption goods in one decade, he earns an interest dividend because presently available goods have a higher subjective value than future goods. When he purchases the factors of production, he really is exhausting the full market price of the consumption goods that they will eventually yield. However, at the moment when he actually buys the factors, those consumption goods are only future goods, and consequently their market price at that moment is less than what their market price will be when the entrepreneur actually sells them to consumers. In short, the entrepreneur is only paying for land, labor, and capital goods. He does not need to buy an additional input called "abstinence. - Robert P. Murphy
Awesome, thanks. I will read the entire article.