Capital and Interest
1884
Summary
Böhm-Bawerk's monumental three-volume work establishing the Austrian theory of capital and interest. He demolishes all prior theories of interest (exploitation, productivity, abstinence) before constructing his own: interest arises from the universal human tendency to value present goods more highly than future goods of equal quantity. Capital is accumulated time — roundabout production methods that take longer yield more output, and interest is the premium paid for that waiting. The work directly refuted the Marxian exploitation theory and gave Mises and Hayek the foundation for business cycle theory.
ISBN: 978-0910884075