Academic journal article History of Economics Review

Some Critical Perspectives on Bohm-Bawerk's Capital and Interest, Volume I, A Critical History of Economic Theory, with Special Reference to His Treatment of Turgot, John Stuart Mill and Jevons

Academic journal article History of Economics Review

Some Critical Perspectives on Bohm-Bawerk's Capital and Interest, Volume I, A Critical History of Economic Theory, with Special Reference to His Treatment of Turgot, John Stuart Mill and Jevons

Article excerpt

Abstract: Eugen von Bohm-Bawerk's Critical History of Economic Theory appeared in 1884 as the first volume of an eventual three-volume treatise on capital theory, of which the second volume, Positive Theory of Capital, appeared in 1889. An English translation of the Critical History by William Smart appeared as early as 1890, and attracted considerable criticism in England from Alfred Marshall and elsewhere (from Gustav Cassel and Knut Wicksell). This paper intends to critically review three significant and controversial aspects of Bohm-Bawerk's history, namely his views on 'Turgot's Fructification Theory' (Book I, chapter III) and 'the minor systems' developed by persons described by Bohm-Bawerk as 'eclectics', that is, John Stuart Mill and William Stanley Jevons. The last are treated in the same chapter by Bohm-Bawerk, that is, Book VII, chapter I. An earlier section of the paper will provide a brief overview of Bohm-Bawerk's Critical History to enable those unfamiliar with its text to situate the three short sections here critically reviewed, in their proper places. A final section presents some conclusions.

Introduction

Eugen von Bohm-Bawerk's Critical History of Economic Theory was first published in 1884 as the first volume of an eventual three-volume treatment of capital theory. Its second volume, Positive Theory of Capital, appeared in 1889. An English translation of the Critical History by the Scottish economist, William Smart, appeared in 1890 and attracted considerable criticism in England and elsewhere. Marshall, for example, was highly irritated by the book, critically annotating his personal copy of the Smart translation in the chapters devoted to A. R. J. Turgot, David Ricardo, William Stanley Jevons and Jean-Baptiste Say, and quarrelling about Bohm-Bawerk's treatment of his predecessors in correspondence with Knut Wicksell during 1904 (see Groenewegen 1995, pp. 473-5 for a summary of this discussion). Wicksell himself was also critical of aspects of Bohm-Bawerk's Critical History, as he confessed in 1911 in an article on Bohm-Bawerk's theory of capital. Wicksell was particularly critical of Bohm-Bawerk's treatment of Ricardo, but failed to see the merit which his Swedish compatriot Gustav Cassel saw in Turgot's theory of capital, which had been so harshly dealt with by Bohm-Bawerk. This was the major issue on which Wicksell had clashed with Marshall seven years before, even though Marshall, perhaps unknown to Wicksell, was in considerable agreement with Wicksell on Bohm-Bawerk's treatment of Ricardo and of Jevons (Wicksell 1911 [1958], pp. 176-7).

Although I examined Bohm-Bawerk's critique of Turgot's theory of capital and interest nearly four decades ago (Groenewegen 1971 [2002], chapter 17), it seems useful to re-trace the subject matter of this debate in the wider context of reviewing some other of Bohm-Bawerk's interpretations of his predecessors. For the major purpose of this paper, the authors selected for comment, in addition to Turgot, are two important British nineteenth-century economists, J.S. Mill and W. S. Jevons. Both of them suffered from what Marshall at one stage called Bohm-Bawerk's 'rather rough method of thumping' (Alfred Marshall to J. B. Clark, 24 March 1908, in Whitaker 1996, III, p. 182). The Mill and Jevons cases are particularly interesting since Bohm-Bawerk more or less dealt with them together in Book VII of his Critical History entitled 'Minor Systems', chapter I, 'The Eclectics'. Jevons was by then no longer alive, so he could not protest against this treatment which even Wicksell had found a little too much at one stage (Wicksell 1893 [1954], pp. 21-2). However, it should be stressed at the outset that Bohm-Bawerk's History can be criticised for its treatment of many other authors whose work he assessed within its pages and that, in some respects, the critique of his treatment of the three authors given here marks only a tip of the proverbial iceberg. …

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