Capital and Interest Theory

Salmasius pointed out that moneylending was a business like any other, and thereby entitled to charge a market price.

As Böhm-Bawerk declared, Salmasius's views on usury were the high-water mark of interest theory, to remain so for over 100 years.

Presented by Rothbard at New York Polytechnic University in 1972.

Presented by Rothbard at New York Polytechnic University in 1972.

John Calvin’s main contribution to the usury question was in having the courage to dump the prohibition altogether.

The time market determines the pure rate of interest. Price per unit of time may be wages or rent. The interest income will be earned by the capitalist who has assumed the task of advancing present money.

Economics begins with the concepts of scarcity and choice. If there was no scarcity it would all be free. Resources like time and materials need to be allocated to economically feasible uses. This will depend on the consumers' demand for the final product.

The objective of the corporate firm is to maximize profits and avoid losses - the same objective of the free market. But the costs are paid out before the income comes in. Stockholders will sell stock to shake up the managers.

Recorded in Vienna, Austria; 25 May 1988.

"Keynesians believe that long-run profit expectations, which have no basis in reality in any case, are subject to unexpected change. Economic prosperity is based on baseless optimism, economic depression on baseless pessimism."