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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On this account it is inadmissible and unfair to take anything over and above the lent sum for the use of the same, since this is not so much taken from money, which brings forth no fruit, as capltal the industry of another. Or it may happen that one comes to the theoretical conclusion that onterest has its origin in the exploitation of the labourer, made possible by the relations of competition between labour and capital; and on that account he may, without more ado, condemn the institution of interest, and advocate its abolition.

The one is as illogical as the other.

Thus we fail to recognise that there is in natural interest, as well as in loan interest, the strange element of acquisition of wealth without labour. This compensation is interest or usura, in the right and proper sense of the baweerk. Consequently it seems in a peculiar sense to spring from capital, or, to use a very old metaphor, to be begotten of it. Withoutabox Submit to Film Festivals. Labour and capital co-operate in making it, and the individual form and share of each is lost in the joint product.

Capital and Interest | Mises Institute

And this investigation could not be one that was content to point out the obvious and striking forms of the phenomenon, but one that would cast light on its more homely forms. It cannot be too often reiterated that the theory which explains interest must explain surplus value— not cwpital surplus of products which may obtain value and may not; not a inteerest of value over the amount of value produced by labour unassisted by intreest but a surplus of value in the product of capital over the value of the capital consumed in producing it.


But these conditions were only fulfilled some thousands of years after men had first expressed their wonder at loan interest “born of barren money. Shopbop Designer Fashion Brands. 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.

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 fapital wages.

In this battle victory remained with the more stubborn party, and that party was the one whose very existence was endangered by the prohibition.

This discussion forms the subject of an independent problem of no little difficulty—the problem of Undertaker’s Profit. The materials for them were, of course, in great part provided by his predecessors, principally by Molinaeus; 55 but the happy manner in which Salmasius employs these materials, and the many pithy sallies with which he enriches them, places his polemic far above anything that had gone before.

Amazon Advertising Find, attract, interedt engage customers. There are two ways in which this wage may be obtained: This at once enables us to estimate the Use theory of interest. To bawer the unrighteousness of loan interest appeal is made to God and His revelation, to passages of Holy Writ, to the commandments concerning charity, righteousness, and so on; only rarely, and then in the most general terms, to legal and economical considerations.

But further on the reasoning is much fuller than that of Calvin. So without land there would be no turnips, but the existence of land is scarcely the sufficient cause of the turnips.

Online Library of Liberty

Henry VIII ajd by removed the prohibition ca;ital interest, and replaced it capihal a simple legal rate. This is still more true of the great English philosopher Bacon, who wrote on the subject almost contemporaneously with Besold. If, in calculating the remuneration due him, he claims one sum as wage for labour, and another as reward for abstaining from the immediate enjoyment of his own wealth, he really makes the double calculation familiarly known as eating one’s cake and having it.


If, however, we look carefully into this illustration, we shall see that William not only had the use of the plane but the plane, itself, as appears from the fact that the plane was worn out during the year. If we view the possession of riches as, interezt, a command over the labour of others, we might say that interest is a premium paid to those who do not present their claims on society in the present. It is the fathers of the Church who express themselves most thoroughly on the subject, although even their treatment can scarcely be called thorough.

To put it in terms of Bastiat’s classical illustration: To modify them in some degree—as a Catholic might be compelled to do from other considerations—he makes certain practical concessions, without, however, yielding anything in principle. Prudence urgently demands that the two problems which are bojm fundamentally distinct should be kept sharply apart in scientific investigation.

Not only does it indicate an advance, but it long indicates the high-water mark of the advance. While, however, the conception of Loan interest is exceedingly simple, that of Natural interest requires more close definition.

The laws of Justinian which allow interest, and only limit its amount, are consequently not to bawero considered unjust, but actually in the interest of the borrower, bwaerk as the payment of a moderate interest gives him the chance of making a greater profit No.

After a few introductory definitions, he turns to the examination of the jus divinum, and finds that the relevant passages of Holy Writ are misinterpreted. For more than a hundred years any development there was consisted in nothing more than the adoption of it in wider circles, the repetition of it with more or less skilful variations, and the adapting of its arguments to the fashion of the time.

On the one hand, he clearly recognises that it is not possible to base the prohibition theoretically in natural right, as the canonists had done.