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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In no other way can I account for the fact that, a bawrk years after the appearance of Wealth of Nations, the great American and German economists should be devoting so much of their time to elementary and neglected conceptions.

Online Library of Liberty

If both problems are attempted at the same time, these will find entrance only too easily into the theoretical part of the inquiry, and there, in virtue of the real importance they have in their proper place, weigh down one of the scales—perhaps that very one which would have remained the lighter if nothing but grounds of reason had been put in the balance. Their usual treatment of the interest problem is to co-ordinate capital with the other factors of production, land and labour, and assume that interest is the payment for the services of capital, as wage is for the services of labour, give ample illustration of the triumphs of capitalist production, and pass on to discuss the rise and fall of its rate.

Notwithstanding this limitation of subject, there will be no lack of material for a critical history, either as regards the historical or as regards the critical part. Under one clause the borrower agreed beforehand that the lender should be released from the obligation of authenticating the borrower’s mora; and under the other a definite rate of interesse was agreed on in advance. The lender could with the money purchase land for himself, or he could request that the land bought with his money be hypothecated to him till the debt is wiped out.

Knterest the taking of interest was forbidden by the Church, and to the clergy only. The insufficiency of the present theory to meet these requirements may be shown in another way. The one is positive—that capital does something; the other negative—that the capitalist abstains from doing something.


The strength of the Abstinence theory is that the facts it rests on really give the explanation how capital comes into being in primitive conditions and in new countries. To the question as to the causes of interest there can be only one answer, and its truth every one must recognise if the laws of thought are correctly applied. The first combatants of the new school were the reformer Calvin and the French jurist Dumoulin Carolus Molinaeus.

Capital and Interest | Mises Institute

Yet the payment demanded at the year’s end is not the capital value of the plane, the sum lent, but also a surplus, a plank, under the name of interest. Too weak to hazard open war against the principle of prohibition, the business world yet managed to prevent its strict and complete legal enforcement, and to establish a number of exceptions some direct and some indirect.

Of the two phases of the canonist writings on this subject, the first is almost without value for the history of theory. Human labour, employing itself on the materials given free by nature, and making use of no powers beyond the natural forces which manifest themselves alike in the labourer and in inferest environment, can always produce a certain amount of wealth.

Of indirect exceptions there were: A little consideration will show that the idea of a “mere surplus” is untenable.

Thus it was inevitable that its collisions with the economical world should become much more numerous and much more serious. And, finally, it flows in to the capitalist without intrrest exhausting the capital from which it comes, and therefore without any necessary limit to its continuance.

The rest of the polemic against the canonists has little theoretical interest. We get interest simply because we prefer a remote to a present result. The power wielded by the owners of wealth in the present day needs no statement.

In these words Molinaeus sets himself in the most direct opposition to the Church’s doctrine. From Wikipedia, the free encyclopedia. In particular, it elaborates on the principles that govern the allocation of incomes, that is, the amounts of interest, wage, and profit.


First of all, it is necessary and useful that a certain practice of taking interest be retained and permitted. 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. In other words, is it something obtained either by chance or force, and corresponding to no service rendered by anybody or anything; or intsrest it something connected with capital or the capitalist that, economically speaking, deserves a bawetk or a wage?

And this investigation could not be one that was content to point out the ingerest and striking forms of the phenomenon, but one that would cast light on its more homely forms. In the same way money can be made fruitful. In this answer two statements are involved: But they now touch only rarely, and then, as a rule, quite casually, on the question of its economic nature, of its origin, and of its legitimacy. Its most natural ally, public opinion, which had originally given it the fullest support, bawrek to withdraw from it.

It is the fathers of the Church who express themselves most znd on the subject, although even their treatment can scarcely be called thorough.

People were concerned less to investigate the nature of loan interest for its own sake than to find in theory something that would help them to an opinion on the good or evil of interest, and would give that opinion a firm root in religious, moral, or economical grounds.

But, of the two, labour is the living factor, and if surplus value does emerge in capitalist production as a regularly recurring phenomenon, it is more likely that it comes from the living agent than from the dead tool. But, on the other hand, he considers the passages in Holy Writ forbidding interest to be undoubtedly binding.