The Positive Theory of Capital

by Eugen von Böhm-Bawerk

This is the second book in the series of Boehm-Bawerk translations by English economist William Smart, originally published in 1891. It is, as the title suggests, the positive theory of capital.

It begins with full front matter by Smart himself, and then we come to book one: The Nature and Conception of Capital. Six sections follow: Capital as an Instrument of Production, Value, Price, Present and Future, The Source of Interest, The Rate of Interest, and finally a rich and detailed index.

It follows the author's legendary method of systematically thinking and clear exposition to present what is called today the time-preference theory of interest, that is to say, that the passage of time and the preference for the present over the future are the necessary and sufficient conditions for the emergence of interest. Capital is the correlary to that notion: all production takes place over time.

This is the first time this translation has been in print in longer than half a century.

468 pages, paperback 2007

Genres: Economics, Politics, Philosophy, History

468 pages, Paperback

First published January 1, 1891

About the author

Austrian economist who made important contributions to the development of the Austrian School of Economics. He served intermittently as the Austrian Minister of Finance between 1895 and 1904. He also wrote a series of extensive critiques of Marxism.

Reviews

[Marcus Christianson · Rating 4 out of 5]

Interesting book. Probably the most substance you’ll get out of the Austrian school of economics though it needs to be adjusted for diminishing returns.

[Kevin Carson · Rating 3 out of 5]

I added a star on rereading, based on his attempts at thoroughness in developing his arguments.
But he largely ignores institutional effects on the steepness of time preference, and greatly exaggerates the differences between his time preference theory and similar theories like Nassau Senior's "abstinence" (basically what also became Marshall's "waiting"). All just minor variations on the same "advance" approach.