Selected Papers on Economic Theory

THE theory of interest on capital which Böhm-Bawerk put forward more than twenty years ago has been well to the fore in theoretical economic discussion ever since, and particularly during the last decade. That is sufficient proof of its importance, even if smaller or greater parts of it in the end may not be able to withstand scientific criticism. I have faithfully read through what must be the greater part of this critical literature, and my long-standing admiration for BU+0F6hm-Bawerk's achievement has not been diminished thereby, although it has led me to take up a more definite position with regard to some of the points at issue. Most of the objections raised against Böhm-Bawerk are, in my opinion, undoubtedly based on misunderstandings and incomplete comprehension of his arguments. But, of course, a writer cannot be said to be entirely blameless if his presentation is not sufficiently lucid and precise to exclude the possibility of misconceptions arising in the mind of a reasonably attentive reader.

The work I mainly intend to deal with here is Positive Theory of Capital, the second of his more important books.

There have been relatively fewer critical objections to his earlier historical work, Geschichte und Kritik der Kapitalzinstheorien (History and Criticism of Interest Theories), which was subsequently published in a new and considerably enlarged edition--a huge, almost too comprehensive, volume of seven hundred pages. The appearance of the second work also diminished interest in the first in some ways, for, once in possession of a fully rational theory, it is less important to remind ourselves of all the earlier, more or less unsuccessful attempts; our interest is rather directed towards the origins of the more correct conception that may be detected in earlier writings, side by side with the mistakes.

Nevertheless, even this first work is of considerable value: it might

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