Foreword

Consumers and entrepreneurs often speak of “the cost of money” when referring to interest rates. Modern lenders also refer to the interest they charge as “loan pricing.” Viewed this way, interest is viewed as if it were any other good. The cheaper a good the more affordable it is. And so the lower the interest rate, the more affordable. By dictating key interest rates, modern central bankers are believed to be alchemists, lowering interest rates to magically transform scarcity into prosperity.

Introduction

Carl Menger’s Approach to Economics

The genius of Carl Menger is seen as much in his perception of where economics needed to go and how it could get there as in his correction of the faulty course set for it by the British Classical economists. In the preface to his Principles of Economics, he wrote:

Time Preference

{By Murray N. Rothbard}

Human Action: The Rate of Interest

{By Ludwig von Mises}

The Phenomenon of Interest

It has been shown that time preference is a category inherent in every human action. Time preference manifests itself in the phenomenon of originary interest, i.e., the discount of future goods as against present goods.

In Defense of the Misesian Theory of Interest

{By Roger W. Garrison}

Introduction

The recently published volume, New Directions in Austrian Economics, consists of the papers presented at a conference held in September 1976 at Windsor Castle, England. Each paper was followed by two formal critiques. Original publication plans provided for the inclusion of these critiques, but subsequent editorial decisions resulted in the publication of the papers only.

The Pure Time-Preference Theory of Interest: An Attempt at Clarification

{By Israel M. Kirzner}

Interest Theories, Old and New

{By Frank A. Fetter}

Professor Rothbard and the Theory of Interest

{By Roger W. Garrison}

The Theory of Interest in Perspective

Bibliography

Bailey, Samuel. A Critical Dissertation on the Nature, Measure, and Causes of Value. New York: Augustus M. Kelley, 1967 [1825].

Baird, Charles W. Prices and Markets, Intermediate Microeconomics. 2nd ed. St. Paul, Minn.: West Publishing, 1982.

Blaug, Mark. The Cambridge Revolution: Success or Failure? A Critical Analysis of Cambridge Theories of Value and Distribution. London: Institute of Economic Affairs, 1974.

Index

A

agio theory of interest, 25, 38, 39, 134

American Economic Association, 133

Austrian School of Economics, 10, 64, 99, 165

Austrian theory of capital and interest, 61, 63, 86, 102, 160

autistic exchange, 92

Avvedimenti civili, 61

B

Bailey, Samuel, 63

Becker, Gary S., 87

Böhm-Bawerk, Eugen von, 12, 21–34, 35–40, 43, 45, 51, 56, 62, 64, 65, 66, 70, 72, 74, 100, 102, 104, 107, 108, 109, 110, 113, 114, 115, 116, 117, 118, 121, 126, 130, 133, 134, 144, 157, 166