Capital and Interest (Volume 1); A Critical History of Economical Theory

PDF-file by Eugen von Böhm-Bawerk

Capital and Interest (Volume 1); A Critical History of Economical Theory PDF ebook download This historic book may have numerous typos and missing text. Purchasers can download a free scanned copy of the original book (without typos) from the publisher. Not indexed. Not illustrated. 1922 Excerpt: ... TRANSLATOR'S PREFACE My only reasons for writing a preface to a work so exhaustive, and in itself so lucid, as Professor Bohm-Bawerk's Kapital und Kapitalzins, are that I think it may be advisable to put the problem with which it deals in a way more familiar to English readers, and to show that the various theories stated and criticised in it are based on interpretations implicitly given by practical, men to common phenomena. First, to state the problem. A manufacturer who starts business with a capital of 20,000 takes stock at the end of a year, and finds that he is richer by 2000—that is to say, if he sold plant, stock, and debts at a fair valuation, he would obtain for them 22,000. The increment of 2000 he will probably call his "profit." If asked to explain what is the origin of profit in general, and of this amount of profit in particular, and, further, why this profit should fall to him, his first answer will probably be tbat the goods he manufactures meet a want felt by a certain section of the public, and that, to obtain the goods, buyers are willing to pay a price high enough to allow him, over the whole field of his production for one year, to obtain the profit of 2000. This, however, immediately suggests the question why a public which, as a rule, is not willing to pay more than it can help for anything, should pay prices such as allow of this profit. The manufacturer's answer probably would be, that it would not be worth his while to put forth his energies in manufacturing for less than this amount of profit, as he could, with at least equal safety and without personal exertion, obtain, say 1000 by lending his capital to any ordinary productive undertaking. In this answer two statements are involved: first, ...

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