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|The Positive Theory of Capital; Böhm-Bawerk, Eugen v.|
4 paragraphs found.
And if proof be needed that I was right in doing so, and that indeed it was impossible for me to do otherwise, I may appeal to witnesses whose authority, as regards this question, is beyond dispute, namely, the leaders and adherents of the "historical school" itself. For full thirty years the historical and statistical tendency has been the prevailing one in German economics. During the whole of this long period there has not been even an attempt to solve the great problem of interest by the tools of the historical method, although this problem has always occupied a front place in economical discussion. Perhaps the nearest attempt to a really historical treatment was that of Rodbertus, with his famous statement of the different forms under which, in various ages, the ruling economic classes have always drawn the better part of the product of the nation's labour to themselves. But, accurately speaking, Rodbertus, in these historic flights, aimed only at winning assent to his exploitation theory, while the characteristic feature of that theory is that it makes use from end to end of the abstract deductive machinery of the classical school, the labour theory of Ricardo. Or to mention only the recognised leaders of the historical school;—Roscher has put together his interest theory out of elements taken partly from J. B. Say, partly from Senior—that is to say, altogether from " pre-historic " theory; while Knies, following Hermann, invents a theory of the "use" of goods, which not only has nothing in the world in common with history and statistics, but, as I at least believe, dispenses with any inductive foundation whatever, and is the result of simple speculation—and not even happy speculation.
Thus occasionally Adam Smith, J. B. Say,, and others.
Finally, there remain those conceptions which see in capital not a complex of goods, but an abstract quantity hovering over goods, as it were; as, for instance, Kühnast's "sum of value," or M'Leod's "circulating power." I have, generally speaking, a very poor opinion of such idealisations of economic conceptions. They are usually cheap expedients for getting round difficulties. If in any difficult subject there occurs some troublesome, angular kind of conception that corresponds with real life and will not fit in to the particular line of explanation, there are always certain theorists ready to disembody it, whereby, of course, it loses its unmannerly angles and edges, but, at the same time, its strength and truth. It becomes a phrase and leads to phrases. We have an instance of this here. If we were to take the sponsors of those definitions at their word, and ask them whether they would seriously say that an immaterial sum of value or circulating power can grind corn, or spin yarn, or plough up land, or carry a load; or whether it is not the case that these good things are done by the common material goods called mills, looms, ploughs, locomotives, they would be very much perplexed. For, asking at their own consciousness, they could scarcely deny that, under the name capital, they have always and peculiarly thought of that something which helps man to work in his production; and the rude materiality of this something agrees but ill with the high-sounding abstract definition of "sum of value" or "circulating power." It is very significant, as regards this group of definitions of capital, that their origin may be traced to a slipshod expression of a writer who was always too careless about the way in which he stated his conceptions—J. B. Say. Say first—and quite correctly—gives the name of capital to certain results of labour that serve as tools to further production, such as Seed, Dye-stuffe, Wool, Tools, Machines, Buildings, Cattle, etc., and calls their total value Capital Value. Later on he makes the remark that a capital value may take very different forms, such as money, houses, utensils, commodities, etc., and this gives him occasion to call "this value a
capital, so soon as it is contained in objects, whatever they be, which are destined to productive activity."
Evidently a careless and contradictory expression, which, however, his economical disciples made the basis of a serious theory!
ibid. So also J. B. Say, "Il faut, pour ainsi dire, que les capitaux travaillent de concert avec l'industrie" (
Traité, i. 3).