Modernizing Böhm-Bawerk's Theory of Interest

Robert Dorfman

Journal of the History of Economic Thought, 2001, vol. 23, issue 1, 37-54

Abstract: In 1690, John Locke proclaimed, “Whatsoever [anyone]; removes out of the State that Nature hath provided … hath mixed his Labour with, and joyned to it something that is his own, and thereby makes it his Property.” Ever since this dictum was pronounced philosophers, economists, and, especially, capital theorists have been embarrassed by the virtually universal disregard of it in practice. At the very inception of economic theorizing, Ricardo declared that explaining the division of the national income into wages, rents, and interest was “the principal problem in Political Economy.” He proposed an ingenious explanation, but was far from settling the matter. Some fifty years later, Marx, building on Ricardo's concept of value, brought the debate to a sharp focus; after him, it became largely an argument between Marxists and everyone else. Put starkly, Marx defined the value of any good or service to be the amount of labor required to produce it. Since a worker and his family can be supported for a year by the product of a good deal less than a full year's labor, this definition implies a gap between the value of a year's labor and the value of its products. Owners of land and capital are only too glad to close the gap by claiming the “surplus value.” Marx's diagnosis of the nature and origin of surplus value became the focus of discussions of the distribution of income for most of the following century.

Date: 2001
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.cambridge.org/core/product/identifier/ ... type/journal_article link to article abstract page (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cup:jhisec:v:23:y:2001:i:01:p:37-54_00

Access Statistics for this article

More articles in Journal of the History of Economic Thought from Cambridge University Press Cambridge University Press, UPH, Shaftesbury Road, Cambridge CB2 8BS UK.
Bibliographic data for series maintained by Kirk Stebbing ().