May 07 2020

With depth and lucidity, Böhm-Bawerk surveys and critiques failed theories of interest from antiquity to modern times, presents a full theory of the structure of. Buy Capital e interés by EUGEN VON BOHM-BAWERK (ISBN: ) from Amazon’s Book Store. Everyday low prices and free delivery on eligible. Capital e interés by EUGEN VON BOHM-BAWERK at – ISBN X – ISBN – Innisfree – – Softcover.

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Capital and Interest: Further essays on capital and interest – Eugen von Böhm-Bawerk – Google Books

With organised industry comes the money valuation, where the comparative use value of goods to people generally becomes reflected on a money scale, and it becomes more definite and intelligible to say a thing is worth so many shillings than to say it is worth so many other things which admit of direct valuation in terms of satisfaction of want. I need scarcely say that, in these scanty remarks, I do not suppose myself to have given an exhaustive, or even a perfectly correct statement of the principles of the theory of capital.

Capital, as National Capital, became the central figure of the weightiest problems of Production; as Private Capital, of the fundamentally distinct problem of Interest. Thus, from that time onward appeared the peculiar phenomenon which was to be the source of so many errors and complications, that two series of fundamentally different phenomena and fundamentally different problems were treated under the same name.

Once the Word of God was made victorious on earth, a hostility immediately showed itself, against which the righteousness of the new laws had to be defended.

As Mises said, this voluminous treatise is the royal road to understanding of the fundamental political issues of our age. In the one case interest is a payment for a tool; in the other, a recompense for a sacrifice. A second he requires to supplement this bare living to the extent of keeping himself hale and vigorous.

On the other hand, it very soon became manifest that, within the common fundamental conception, there was a surprising amount of latitude for different readings of it, and, as it chanced, there were certain circumstances which very much favoured the taking advantage of this latitude.

So much for the function of capital, and one is apt to jump to the conclusion that, having shown how capitalist industry produces a great quantity of products as compared with unassisted labour, the sole and sufficient origin of interest has been indicated. Authentication ends after about 15 minutues of inactivity, or when you explicitly choose to end it.

It is generally called Interest when the capital consists of perishable or fungible goods. If, then, we would rescue these and make them objects of economic investigation—and for very many scientific problems we simply cannot do without taking cognisance of them—there is nothing for it but to have recourse to the comparatively narrow but always impressive personal observation of life.

As we have already seen, in the hands of labour wealth increases enormously with the extension in time of the production process. After the twelfth century, however, the discussion is conducted on a gradually broadening economic basis. The animal finds a certain provision spontaneously offered it in nature; goes straight toward that provision; and never gets beyond it. The Socialist or semi-socialist writers of our time were the first to face in earnest the confusion of conceptions by distinguishing capital into “pure economic capital,” and capital as a “historico-legal category.

But it is perhaps better to consider the undertaker as the owner of capital, and take the question simply as one between Wage-Earners and Capitalists.


Inferes income that flows from capital, sometimes called in German Rent of Capital, we shall simply call Interest.

The motive of the capitalist undertaker is certainly not preservation but increase.

The same considerations which show us the kind of mastery man has over nature show us at the same time the measure and the narrow limits of his mastery.

If, in the sphere of distribution, the conception of capital thus embraces objects which are not capital in the cappital of bohk, this alone is sufficient to show that the bearing of interest cannot by itself be an indication of the productive power of capital.

The national conception, if we except those few objects gohm immediate consumption lent at interest to other countries, includes merely the produced means of production belonging to a country.

If a good, interrs as gunpowder, can only serve its purpose or afford its use all at one time, we employ the word “consumption” for the act by which the good gives forth its use. On the other hand, there are many, especially among the younger economists, who hold that such a division is inadmissible, and that the so-called undertaker’s profit is homogeneous bojm the profit on capital.

There is no equivalent feminine form. And to prevent us unwittingly running counter to certain fundamental truths, perhaps the best way is to put these truths explicitly in black and white before our eyes.

Are we to conclude then that durable goods admit of an independent use possessing independent value, and that perishable goods do not?

Eugen Böhm von Bawerk

I shall endeavour not to abuse the opportunity by inflicting a mass of learned scientific detail on the reader. And finally, he sells time, which belongs to the borrower just as much as it does to the lender and to all men. But, like so many another conception in the theory of capital, this conception of capital itself has become a veritable apple of discord to the theorists.

The writers of the Christian Middle Ages had more occasion to treat the subject thoroughly. But there is still a third way; instead of felling one tree he fells a number of trees, splits and hollows them, lays them end for end, and so constructs a runnel or rhone which brings a full head of water to his cottage.

The aim of production is essentially the making or procuring of a living. But although this neglect has been the source of many errors, misunderstandings, and prejudices, we can scarcely complain of bonm, since it is the practical problem of interest that has brought the theoretical problem and its scientific treatment to the front.

Seed-time and harvest become separated, not by months but by years, and the amount of wealth in intwres community, as enabling labour to bridge over the long time of growth, becomes visibly the condition of its average production period, and so of its average productiveness.

But, accurately speaking, Rodbertus, in these historic flights, aimed only at winning assent to his exploitation theory, while the characteristic feature of that theory is that it makes use from end to end of the abstract deductive machinery of the classical school, the labour theory of Ricardo. He pays it ex proventu, out of the gain that he makes with the money. This pretext is offered them by time.

Online Library of Liberty

Thus the Productivity theory ends in suggesting that other and hostile theory according bawedk which surplus value comes from labour, and is only snatched away by capital. Disregarding as before the demand for consumption, the effect of which is merely to lessen the amount of wealth available for productive borrowers—and remembering in passing that the agio on present goods is the joint result of these two collateral demands, we find this wealth confronting the demand of labour, transmitted through the employers for the means of subsistence intetes the production period.


Of indirect exceptions there were: And so our pound weight, while in itself constantly acting with perfect uniformity, will, according to the different surroundings in which we place it, sometimes hold together a heap of papers on a writing-table, sometimes indicate the weight of another object, sometimes regulate the pressure of steam in the boiler. Thus we can see that the three concrete factors which determine the marginal extension of process, and thereby the rate of interest, are the amount of the capial Subsistence Fund, the numbers of the working Population provided for, and the degree of Productiveness reached in the industrial development.

The function of wealth, then, we say, is to support this working life, with its increasing claims, during its work.

Karl Marx and the Close of His System examined Marx’s theory of labour valueclaiming the basic error in Marx’s system to have resulted from a self-contradiction of Marx’s law of fapital, namely how the rate of profit and the prices of production of the third volume of Marx’s Capital contradict Marx’s theory of value in the first volume.

Here there is no immediate or direct method of production. In other words, interest is a complementary part of the price; a part equivalent of the “principal” lent. The book is divided into seven parts: The centre of gravity of the conception of private capital, as has been pointed out, lies in the acquisition of interest, in the characteristic of being a source of income: On this account it is inadmissible and unfair to take anything over and above bbohm lent sum for the use of intrres same, since ca;ital is not so much taken from f, which brings forth no fruit, as from the industry of another.


Say, partly from Senior—that is to say, altogether from ” pre-historic ” theory; while Knies, following Hermann, invents a theory of the “use” of goods, which not only has nothing in the world in common with history and statistics, but, as I at least believe, dispenses with any inductive foundation whatever, and is the result of simple speculation—and not even happy speculation.

His prices are regulated not by his own cost of production, but by the costs of production in iinteres richest and best appointed establishments of his rivals; and yet his workers’ wages have to be regulated by an equation between these prices, and the wages of labour in similar trades and in the near vicinity.

Bawek so, interest cannot be the price of the “use” of capital, as interest is paid for all capital, whether durable or perishable. Not to mention Calvin, who, indeed, had given the Catholic world quite other causes of offence, Molinaeus had much to suffer; he himself was exiled, and his book, carefully and moderately as it was written, was put on the Index.

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