His theories of interest and capital were catalysts in the development of economics, but Böhm-Bawerk gave three reasons why interest rates are positive. First. Translator’s Preface↩. My only reasons for writing a preface to a work so exhaustive, and in itself so lucid, as Professor Böhm-Bawerk’s Kapital und Kapitalzins. Capital and Interest (LvMI) – Kindle edition by Eugen von Böhm-Bawerk, William Smart. Download it once and read it on your Kindle device, PC, phones or.

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Interest seems to be defined as that annual return to capital which may be obtained, as a rule, without personal exertion. It is very rarely indeed that, when a bhm-baaerk first attracts attention, it is seen in its full extent, with all its constituent and peculiar details, and is then made the subject of one comprehensive inquiry.

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The dark days which preceded and followed the break up of the Roman Empire had bmh-bawerk a reaction in economical matters, which, in its turn, had the natural result of strengthening the old hostile feeling against interest.

If then we accept “dividend” as the equivalent of “interest”” we shall have to conclude that varying rates of interest are obtainable on equal amounts of capital. The first part of it has a great resemblance, perhaps accidental, to Calvin’s line of intterest.

It is only after these funds are capita, for that the dividend is paid over to the shareholders, and this accentuates two important facts: On one or other of these grounds, the capitalist is said to deserve a remuneration, and this remuneration is obtained by him in the shape of interest.

I shall very shortly state those rational arguments that have an interest for us, and verify them by one or two quotations from such writers as have given them clear and practical expression. But time is a common good that belongs to no one in particular, but is given to jnterest equally by God.


As a champion of the new marginalist school, this great work brought him more fame than even Carl Menger had in his day. That the writers of old pagan times did not go more deeply into the question admits of a very simple explanation.

The time I have given to this work may excuse my suggesting that a valuable service might be rendered to the science, and a valuable training in economics given, if clubs were organised, under qualified professors, to translate, adapt, and publish works which are now indispensable to the economic student.

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Bohm-Bawerk was an economist from the Austrian School. The difficulties, however, which surround lnterest special subject, the problem of interest, are so considerable that I do not feel it my duty to add to them by taking up another.

It is of course a familiar expression of everyday life that interest is the price paid for the “use of capital,” but most writers seem to have accepted this formula without translating it. The most cogent argumentation on this point, though it may convince many who thought otherwise, will never convert all.

The essential difference between the two transactions is that, on 1st January the price of the plane is another similar plane; on the 31st December it is a plane plus a plank.

He begins by giving his own theory. Firstly, by adopting it a certain harmony will be maintained, so far, at least, as terminology is concerned, with the majority of those writers whose views we shall have to state; and secondly, this limitation of the conception of capital defines also most correctly the limits of the problem with which we mean to deal.

Alexa Actionable Analytics for the Web. To put it another way. The social and political problem asks whether there should be interest on capital—whether it is just, fair, useful, good,—and whether it should be retained, modified, or abolished. The rest of the polemic against the canonists has little theoretical interest.

It is not only that “every gate is barred with gold,” but that, year by year, the burden of the past is becoming heavier on the present. But it would be easy to misunderstand the precise incidence of this criticism, and perhaps it is well to point out what it does and what it does not affect. Here also he asks two prices for one article; he asks for replacement of a similar article and he asks a price for the use of the article, which we call interest or usury.


From this short abstract it will be seen that Besold is a frank and able follower of Molinaeus. So without land there would be no turnips, but the existence of land is scarcely the sufficient cause of the turnips. As the champion integest the then-emerging marginalist school, this great work brought him more fame than even Carl Menger had in his day.

Capital and Interest | Mises Institute

First, to state the problem. By using this site, you agree to the Terms of Use and Privacy Policy. If a sound industrial company is known to be paying a dividend higher than a certain capitla percentage on its capital, the value of the stock, or parent capital, will rise to the point where dividend corresponds to an interest no greater than this definite percentage— e.

Any return above this level we should consider, either as due bhm-bawegk the insecurity of the capital as invested i.

There is, in short, in every country, although varying from country to country, a certain annual return which can be obtained by capital bhm-bawek a minimum of risk, without personal exertion of the owner. That is shown most simply by the usual rate of interest obtainable for a perfectly safe loan of capital.