ИПИ Библиотека

The great economist and finance minister of the Austro-Hungarian Empire is a pillar of the Austrian School. As a champion of the new marginalist school, this great work brought him more fame than even Carl Menger had in his day.
Here is the original English translation by Scottish economist William Smart, the one that had the largest impact on the American and British economic scene, and the one that remains lucid and penetrating. This edition is the first time it has been available in more than half a century.
With depth and lucidity, Boehm-Bawerk surveys and critiques failed theories of interest from antiquity to modern times, presents a full theory of the structure of production, and defends the importance of capital in production and time in the determination of the interest rate.
The broad implications of this work are being rediscovered today by younger Austrians building on his foundation for Austrian production theory. It's not only economics being addressed here. As Mises said, this voluminous treatise is the royal road to understanding of the fundamental political issues of our age.
The book is divided into seven parts: 1) The Development of the Problem, 2) The Productivity Theories, 3) The Use Theories, 4) The Abstinence Theory, 5) The Labour Theories, 6) The Exploitation Theory, 7) Minor Systems of Thought.
The goal of each section is to present the fairest possible case for the theory, examines its claims in detail, and finally reveals its most profound errors. The effect is to completely clear the field for his next book, The Positive Theory of Capital.

The fundamental idea of the Use theory is the following. Besides the substance of capital, the use (Gebrauch or Nutzung) of capital is an object of independent nature and of independent value. To obtain a return for capital it is not enough to sacrifice substance of capital alone; the use of the capital employed must be sacrificed also during the period of the production. Now since, as a matter of theory, the value of the product is equal to the sum of the values of the means of production spent in making it, and since, in conformity with this principle, the substance of capital and the use of capital, taken together, are equal to the value of the product, this product naturally must be greater than the value of the substance of capital by itself. In this way the phenomenon of surplus value is explained as being the share that falls to the part sacrifice, the "use of capital."

Eugen von Böhm-Bawerk

Eugen von Böhm-Bawerk (February 12, 1851 – August 27, 1914) was in the right place at the right time to contribute importantly to the development of Austrian economics.
Böhm-Bawerk together with Carl Menger and Friedrich von Wieser were the three pillars that established the Austrian school.
Böhm-Bawerk's contributions laid the foundation for the theory of capital, and in later development by others such as Knut Wicksell, the modern understanding of interest in terms of compensation for the use of capital. He emphasized the role of time in determining the value of goods, and developed marginal utility theory into a theory of prices. His work addressed significant economic questions such as how to increase capital, and what is the justification for charging interest. Böhm-Bawerk was the first economist to refute Karl Marx's claim that capitalists exploit workers. He argued that in fact they provide a service to workers by paying them in advance of payment the owners receive for sale of the goods produced by workers. Böhm-Bawerk's view of economic processes included the actual situation and expectations of people involved, not just material measures of quantity of goods and hours of labor. In this way, his answers came closer to addressing the real situation of human society and how we can cooperate together to the benefit of all.