Capital and Interest (German: Kapital und Kapitalzins) is a three-volume work on finance published by Austrian economist Eugen Böhm von Bawerk. 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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Next, a distinction must be drawn between Natural interest and Contract or Loan interest. All the more strongly was its attention drawn to a new controverted question raised by the change in legislation—the question whether there should be a legal rate, and what should be the height of it.

To the first category belongs all work of which the farmer’s is the natural type: Its strongest argument, that of the barrenness of money pecunia non parit pecuniamhe finds of “little weight.

After thus stating his own position Salmasius devotes himself to refuting the arguments of his opponents point by point. And it is on the margin, and not with a view to the big picture, that we make economic decisions. Yet the statement just given is elaborate and logical in comparison with that of many of the economists who profess the Productivity theory.

Then the farmer lost one sack of grain.

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Briefly it amounts to this, that all material “goods,” the objects of economical attention as distinct from mere “things,” are economic only in virtue of their use, real or imaginary.

The philosophic writers, capitl Plato, Aristotle, the two Catos, Cicero, Seneca, Plautus, and others—usually touch on the subject too cursorily to give any foundation in theory for their unfavourable judgment. First of all, we meet with Aristotle’s argument of the barrenness of money; only that the theoretically important point of interest being a parasite on the produce of other people’s industry, is more sharply brought out by the canonists.

And now the lawyers begin to take a more active part in the movement alongside the theologians—first the canon lawyers and then the legists. Skip to main content. But if we take the case of coals, or grain, or perishable goods generally, and ask how it is possible to conceive of these goods giving off a use and being returned to us substantially the same as before, less wear and tear, we must perceive that interest, in this case at least, cannot be a payment for the “use” of goods, but for the consumption of them, for the goods themselves.


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If the consumers, again, will only pay a price equal to the value of the capital consumed, the various workers, including the employer proper, will get their wage, and the value of the capital itself will be unimpaired, but there will be no interest. On the other hand, the increase of wealth over population gradually displaces labour, and allows the same amount of work to be done by fewer hands; this brings into existence a “reserve” to the industrial army, always competing with those left in work, and forcing down wages.

The explanation of this reproduction is to be found in the work of those who employ the capital, both manual and intellectual workers. Such a balance sheet will generally show two funds—a Depreciation Fund and an Insurance Fund.

Senior included abstinence among the costs of production as a second and independent sacrifice. From Molinaeus indeed, as the numerous quotations show, he has taken the better part of his doctrine.

Capital and Interest – Wikipedia

It may with reason appear questionable if the entire profit realised by an undertaker from a process of production should be put to the account of his caapital. Interest then is in some sense what Aquinas called it, a price asked for time.

Value only arises in the relation between human wants and human satisfactions, and, if men do not “value” commodities when made, all the labour and capital expended in the making cannot confer on them the value of the smallest coin.

Share your thoughts with other customers. Natural interest, on the other hand, if not obtained though the labour, is certainly obtained under co-operation with the labour of the capitalist-undertaker; and to superficial consideration labour and co-operation with labour are too easily confounded, or, at any rate, not kept sufficiently distinct.

The rational arguments which were found to agree with the divine prohibition were scarcely more than a kind of flying buttress, which could afford to be the slighter that it had not to carry the main burden of proof.

In the Netherlands, as I have already said, the works of Salmasius were almost immediately followed by a whole series of writings of similar tenor. Only a comparatively small number of them—mostly deductions from the jus naturale— can lay claim to any theoretical interest. And if, as we saw, productivity cannot account for interest, no more can abstinence.


Its level is usually determined by the bawerj price of the national security. In the social and political question there naturally come into play all sorts of wishes, inclinations, and passions. If, on the contrary, it is so constituted that its life-work extends over a period of time, then each individual use diminishes the sum of uses snd constitutes the essential nature of the good.

In the one case the capitalist is paid because the capital he lends produces, or helps to produce, new wealth; in the other he is paid because he abstains from diminishing wealth already produced. But Calvin would have the whole question judged in a reasonable spirit, and he shows, by the following example, how the lender’s claim of interest may, from this point of view, be well grounded.

There was urgent need of assistance from theory, and this assistance was readily obtained from the growing science. To put it another way. In all production labour sacrifices life, and capital sacrifices immediate enjoyment. The prohibition had originally been imposed in capiral circumstances of such a nature that it was easily borne.

Capitalists, no less than labourers, are under the domination of the capitalist system, and, under the steady pressure of competition, it is difficult for an employer to be just, not to say generous. In course of time the authority of the state had become reconciled to the taking of interest.

The views of Salmasius on interest are put together most concisely and suggestively in the eighth chapter capial his book De Usuris. These commodities, under certain known conditions, will usually possess value, though their value is little proportioned to their amount; indeed, is often in inverse ratio.

In concluding, I should like interrest say with Dr. Before I can apply myself to my proper task I must come to an understanding with my readers as to some conceptions and distinctions which we shall have to make frequent use of in the sequel.

And finally, he sells time, which belongs to the borrower just as much as it does to the lender and to bohmm men. This is still more true of the great English philosopher Bacon, who wrote on the subject almost contemporaneously with Besold.