КРИТИЧКА ИСТОРИЈА
НА ЕКОНОМСКАТА ТЕОРИЈА
Analytical
Table of Contents
INTRODUCTION
The
Problem of Interest
The
phenomenon of an income flowing constantly from all kinds of capital, without
personal exertion of the owner
The
conditions of solution
The
theoretical must be distinguished from the social and political problem.
Characteristic of each
Danger of
confounding the two; its common effects
Our tasks
is the critical history of the theoretical problem
Preliminary
definitions. Capital a “complex of produced means of acquisition”
The
difference between National and Individual capital
between
Gross interest and Net interest
between
Natural and Contract (or Loan) interest
Interest as
distinguished from Undertaker’s profit
Limitation
of the subject to Interest proper
BOOK I
The
development of the Problem
Chapter I
The
opposition to interest in classical and medieval times
Loan
interest, or Usury, as evidently income without labor, was discussed long
before Natural interest, where labor is always present, and is supposed to
account for the income
The first
period – a rather barren one, extending to the eighteenth century – is taken up
with the struggle for and against usury
Dislike of
interest shown to all undeveloped stages of industry
Hostility
of the philosophic writers
Aristotle’s
argument, that money does not breed
Thus far
the question is only theoretical, interest being recognized as an established
institution
Reaction
under Christianity; victory of the Church over temporal legislation;
prohibition of interest
The subject
treated theoretically till twelfth century, when begin appeals to the jus
divinum, jus humanum, and jus
naturale
The
explanation of this; - the vexatious pressure of the prohibition on industry,
and the necessity for rational defense of it
Stock
argument of this period
(1) The
barrenness of money
(2) The
consumability of money (Thomas Aquinas)
(3) The Use
transferred with the capital
(4) The
selling of Time, a good common to all
But the
prohibition did not apply to profit made by personal employment of capital
Chapter II
The
defense of interest from the sixteenth till the eighteenth century
Zenith of
the prohibition in the thirteenth century
The
struggle for practical life. Direct exceptions to the prohibition; evasions of
it. The “interesse”
The effect
on theory. Compromise of the reformers with the “parasitic profit”
Rise of
direct opposition to the prohibition
Calvin
rejects authority, and dismisses the rational arguments, but does not unreservedly
allow interest
Molinaeus;
his scholastic review and criticism of the canon arguments; his conclusions and
concessions
Calvin and
Minaeus, however, stand almost alone in the sixteenth century
Besold an
able follower of Molnaeus
Bacon sees
in interest an economical necessity, but only tolerates it
In the
seventeenth century there is a great development of theory, especially in the
mercantile
Salmasius’s
argument; - if the Commodatum is allowable, so also is the Loan. To the
objection founded on the perishable nature of goods, he answers: (1) that such
an argument would prevent the lending of perishable things even without
interest, and (2) that the perishableness is another argument for interest
Character
of his writings
His work
marks high water for a hundred years
In
Justi says
nothing about it. Sonnefels, who has nothing good to say of it, ridicules the
cannon doctrine and the prohibition
In
Thus
Culpepper, Child, North
Locke goes
deeper into the subject. Money, he admits, is barren, but interest is
justified; for, owing to bad distribution, one has lands which he cannot use,
and another has capital, and interest for the one is as far as rent for the
other
Locke’s
real importance, however, lies in the idea kept in the background, that all
wealth is made by labor. Thus also Steuart
Hume on the
connection between profit and interest
By the time
of Bentham (1787) the cannon doctrine is only a subject for ridicule
In
But before
the eighteenth century there appeared no theoretical defense of interest
Galiani’s
pregnant idea (1750). From the analogy of bills of exchange, he argues that present
sums of similar amount, and that interest represents the difference
But he
ascribes this to the different degree of their security, and so makes interest
a mere insurance premium
Beccaria.
In
Fanatical
opposition by the elder Mirabeau
Finally,
Turgot gave the canon doctrine its coup-de-grace. Summary of the Memoire
Critical
retrospect. The canon had said that interest was a defrauding of the borrower;
for (1) money is barren, and (2) there is no separate use of it. The new
doctrine said (1) money is not barren when the owner, employing it himself, can
make profit by it, and (2) there is a use of capital separable from capital
itself
In short,
it explained Loan interest from Natural interest, but did not go on to ask the
meaning of Natural interest
All the
same it was no small gain that the question was now formally put, Why can a
man, employing his own capital, make a profit?
It was not
long before a part of employer’s profit was seen to be an income sui
generis
Chapter III
Turgot’s
Fructification Theory
The reason
why Contract interest was first studied
Scientific
research now replaced the outside motive. The Economists: Quesnay, De La
Riviere
Turgot’s
argument – the possession of land guarantees rent. But land may be priced in
capital, and so every capital becomes the equivalent in the value of a piece of
land. Capital must therefore bare as much profit as lands bears rent; otherwise
all forms of industry would be abandoned for agriculture
This,
however, is arguing in a circle. Land is priced by discounting its future uses;
calculating so many years’ purchase at a customary rate of interest.
Rate and interest then are forms of the one phenomenon which we are
investigating
Chapter IV
Adam
Smith and the Development of a Problem
Adam Smith
has no distinctive theory of interest
His
principal suggestion – its necessity as an inducement to the productive
employment of capital
His
contradictory accounts of its origin (1) in an increased value of products over
the labor value, (2) in a curtailment of wage
While Adam
Smith is thus neutral, these suggestions formed the germs of later theories
The growth
of capital and the antagonism of capital and labor soon made neutrality
impossible, and compelled discussion of interest as income obtained without
work
Hence the
appearance of a number of interest theories
Division of
the subject. The various interest theories as answers to the central question:
Why is Surplus Value a constant phenomenon of capitalist production?
Chapter V
The
Colorless Theories
Sartorius,
Lueder, Kraus, Hufeland, Seuter, Politz, Murhard, Schmalz, Canerin
Count Soden
on interest as diverted from the product of labor.
Lotz makes
the capitalist’s sole claim replacement of his expenses; but this would not be
sufficient inducement to the productive employment of capital; hence the
necessity of interest
Insufficiency
of this illustrated from rent
Jakob,
Ricardo’s
account –
(1) Of the
origin of interest – the inducement to productive employment of capital
(2) Of the
rate of interest. As a result of his rent theory, profit and wage together are
determined by the return to the worst land in cultivation
But wages
being determined by the “Iron Law”, profit is the remainder. And as more
unfavorable cultivation is resorted to, the decreasing product leaves less to
profit
But profit
cannot disappear, otherwise accumulation would cease, and wealth and population
be checked
In this
Ricardo has neglected the constant causes which prevent the absorption of
profit by wage;
for the
weakening of the motives of accumulation may prevent resort to land which
yields too small a profit
(3) Of a
connection between profit and value. Profit as paid out of increased price.
Inconsistency of this with the “Labor principle”
M’Culloch
finds that value is determined by labor alone, capital being only the product
of previous labor; includes profit among costs; and at the same time defines
profit as a surplus
His absurd
illustrations of the cask of wine;
of the two
capitals – in leather and wine; of the timber. General untrustworthiness
M’Leod sees
no problem; considers profit self-explanatory and necessary
His faith
in formula of supply and demand
Garnier.
Canard; “necessary” and “superfluous” labor
Possible
agreement of Canard with Turgot’s theory
Droz makes
saving an element of productive power, but devotes his alienation chiefly to
Contract interest
BOOK II
The
productivity Theories
Chapter I
The
Productive Power of Capital
Apparent
simplicity of the new explanation that Capital produces its own interest
Real
ambiguity of the word “productive”, as (a) producing more goods, (b) producing
more value
…
(EUGEN
V. BOHM-BAWERK: “CAPITAL AND INTEREST – A Critical history of Economical
Theory”; London, MACMILLAN and co. and New York – 1890)
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