Great Economists Since Petty and Boisguilbert
Edited by Gilbert Faccarello and Heinz D. Kurz
Chapter 49: Eugen von Böhm-Bawerk (1851–1914)
Eugen Ritter von Böhm-Bawerk is best known to us for his theory of capital and interest. It will also be the main topic of this entry. Nevertheless, there are other relevant contributions of Böhm-Bawerk to economic theory and policy. Life Böhm-Bawerk was born on 12 February 1851 in Brünn (Brno) in the Czech part of the Austrian-Hungarian Empire. His father was a high civil servant. Böhm-Bawerk studied law in Vienna and then entered the civil service. He soon took leave to become an economist by studying in Heidelberg, Leipzig and Jena. In 1880 he obtained his Habilitation at the Faculty of Law in Vienna as a student of Carl Menger. His Habilitation thesis “Whether legal rights and relationships are economic goods” was published in 1881. In this he deals with the question of whether immaterial property like patent rights or goodwill positions in markets could be seen as part of net national wealth. In opposition to earlier writers such as Albert Schäffle and also to his own mentor Carl Menger, he gave a negative answer by emphasizing the similarity with loans which also could not be seen as part of net national wealth. The private value of such immaterial property rested on the fact that other people in the future will pay more for material goods than their cost of production. If these margins were considered to be paid above cost as a future burden of consumers, their capitalized value just cancels the capital...
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