Hayek’s brief journal discussion comment responds to Dr. Lutz’s criticism of the treatment of interest in The Pure Theory of Capital. It combines a clarification of that book’s method with an acknowledgment of its unfinished argument. Hayek cannot offer the considered reply Lutz deserves, but suggests that the criticism stops before the chapters containing the beginnings of a solution. His central distinction is between a provisional device used to simplify exposition and the analysis ultimately required to explain interest.
The assumption of a “constant income stream,” Hayek explains, belongs to the earlier stages of the book and was intended to be discarded. The relevant question is not simply how an unchanged income stream is valued, but how preferences differ for additional income available at different times:
A complete solution can emerge only after this assumption is given up and replaced by an analysis of the preferences for increments of income at different dates.
Chapters XVII and XVIII sketch this approach, yet Lutz excludes them from consideration. Hayek thus challenges the scope of the criticism without claiming that the omitted chapters supply a finished theory. He explicitly accepts that their treatment may be inadequate or insufficiently integrated into the exposition.
The comment then turns from defense to methodological self-criticism. Comparing preferences between two dates is relatively simple; extending the comparison to every future date for which a planner must provide becomes overwhelmingly complicated. Hayek admits that he abandoned the fuller investigation. An analysis of time preferences comparable in detail to his treatment of productivity seemed unlikely to justify the effort demanded of either author or reader. This explains the sketch’s brevity, but does not establish that time preference is theoretically secondary.
Hayek consequently regrets that compressed treatment and unguarded generalizations may have understated its importance:
It is in this respect more than in others that I am now most conscious that my exposition requires revision.
The comment’s significance lies in this qualified concession: Hayek preserves the intended direction of his argument while identifying the temporal structure of preferences as its chief outstanding expository problem. He offers a principle for further analysis, not a completed resolution of Lutz’s objections.
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