Capital and interest, a critical history of economical theory by Böhm-Bawerk Eugen von 1851-1914

Author:Böhm-Bawerk, Eugen von, 1851-1914
Language: eng
Format: epub
Tags: Capital, Interest, Usury
Publisher: New York : Brentano
Published: 1922-03-25T05:00:00+00:00

the amount of the capital advanced." This is an explanation which, in economical precision, leaves almost everything to be desired.

Of a second follower of Say, Nebenius, it cannot at any rate be said that the theory received any harm at his hands.

In his celebrated work on Public Credit, 1 Nebenius has devoted a brief consideration to our subject, and given a somewhat eclectic explanation of it. In the main he follows Say's Use theory. He accepts his category of the productive services of capital, 2 and bases interest on the fact that these services obtain exchange value. But in course of the argument he brings out a new element, in pointing to " the painful privations and exertions" 3 which the accumulation of capital requires. In the long run he shows ample agreement with the Productivity theory. Thus on one occasion he remarks that the hire which the borrower has to pay for a capital which he employs to advantage may be considered as the fruit of that capital itself (p. 21); and, on another occasion, he emphasises the fact that," in the reciprocal valuation by which the hire is determined, it is the productive power of the capitals that forms the chief element" (p. 22).

Nebenius, however, does not enter on any more exact explanation of his interest theory; nor does he analyse the nature of the productive services of capital, obviously taking the category without question from Say.

At this point I may mention a third writer who rose into prominence later—writing long after Hermann—but never got beyond Say's standpoint; Carl Mario, in his System der Wdtokonomie.*

1 Oeffcntliche Credit. I quote from the second edition, 1829.

2 See, e.g. pp. 19, 20.

3 "On the one hand, the necessity and the usefulness of capital for the business of production in its most multifarious forms, and on the other, the hardship of the privations to which we owe its accumulation ; these lie at the root of the exchange value of the services rendered by capital. They get their compensation in a share of the value of the products, to the production of which they have cooperated " (p. 19).

"The services of oapital and of industry necessarily have an exchange value ; the former because capitals are only got through more or less painful privations or exertions, and people can be induced to undergo such only by getting an adequate share. ..." (p. 22)

4 Kassel, 1850-57.

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