Final answer:
The Knightian view of capital, centered on incalculable risk, differs from the Austrian view which focuses on capital's heterogeneous structure and economic calculation even under uncertainty. These views have influenced economic theories and practices in areas like risk management and critiques of central planning.
Step-by-step explanation:
The Knightian view of capital is fundamentally different from the Austrian view in that Knightian uncertainty, named after economist Frank H. Knight, refers to an absolute incalculable risk. This contrasts with the Austrian view which suggests capital is a heterogeneous structure with multiple uses that are subject to economic calculation even in uncertain conditions. Schools of thought that have made use of the Knightian view include the Chicago School, wherein the emphasis is on market risks and uncertainties that can't always be predicted or quantified.
The effect on economic theory has included a broader understanding of unknowns in market operations, and has led to the development of various financial instruments and policies that seek to manage the unpredictability inherent in economic activities. The Austrian perspective, championed by economists in the Austrian School like Friedrich Hayek, focuses on the importance of time and individual plans in the structure of capital, which has influenced advocates of free-market policies and critics of central planning.