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The third volume of The Collected Works of Israel M. Kirzner presents a collection of writings on capital theory that serve both as a discourse in the history of economic thought and as conceptual clarification in one of the most complex subjects in economics. This edition explores the notions of capital and interest in light of the controversies surrounding these topics.

The first essay in this volume is Kirzner's introduction to the 1996 edition. The second essay was published as a stand-alone book in 1966 and presents Kirzner's capital theory, focusing on multi-period production plans. In the third essay Kirzner offers an interpretation of Ludwig von Mises's view of capital and interest. The fourth essay, written in the late 1980s, is Kirzner's attempt to clarify the difficulties found in interest theory. Finally, the fifth essay deals with Sir John Hick's capital theory in light of Kirzner's own Austrian position.

Israel Kirzner has achieved greatest renown as an Austrian economist for his work on entrepreneurship. But he is also a distinguished capital theorist; the present volume usefully collects several of Kirzner's essays in this field, most notably his 1966 ""An Essay on Capital.""
This essays in this volume present an Austrian approach to the problems of capital and interest theory. This approach, based on the pure time preference theory, is seen as offering an alternative to both the orthodox neoclassical and the heterodox Sraffian approaches to economics. A subjectivist view is taken, with all capital and interest phenomena traced to individual multiperiod plans. Capital is seen not as an objective mass of tools and equipment, but as the interim state in which inter-locking multiperiod plans have manifested themselves at a particular point. The aim of such an approach is to present pure time (Fetter-Mises) preference theory of interest in understandable terms.

Israel M. Kirzner

Israel Meir Kirzner (Yisroel Mayer Kirzner) (1930) is a leading economist in the Austrian School.

After studying with the University of Cape Town, South Africa in 1947-48 and with the University of London External Programme in 1950-51, Kirzner received his B.A. summa cum laude from Brooklyn College in 1954, an MBA in 1955 and Ph.D. from New York University in 1957 (studying under Ludwig von Mises).

Kirzner's major work is in the economics of knowledge and entrepreneurship and the ethics of markets. He is emeritus professor of economics at New York University, and is a leading authority on Ludwig von Mises’' thinking and methodology in economics. Kirzner's research on entrepreneurship economics is also widely recognized In 2006, Kirzner received the Global Award for Entrepreuneurship Research "for developing the economic theory emphasizing the importance of the entrepreneur for economic growth and the functioning of the capitalist process."

No other economist in recent times has been so closely identified with Austrian School of economics as Israel M. Kirzner.