Knut Wicksell was an important thinker of the second-generation marginalist school, and here is his detailed commentary on and elaboration of the capital theory of Eugen von Böhm-Bawerk. It was first published in 1893, but did not appear in English until 1954. But its appearance filled a gap in the history of economic ideas. He further defends the relationship between the natural rate of interest and the return on capital. He sides strongly with the Mengerian school of marginalists against the Jevons and Walrasian branch. This book is essential for any student of Austrian capital theory. His rigor and attention to detail is impressive by any standard. Includes a foreword by G.L.S. Shackle (who mistakenly suggests that Wicksell was a proto-Keynesian).
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Knut Wicksell (1851-1926) was a Swedish economist who did pioneering work on the theory of interest. He distinguished between the money rate of interest and the “natural” rate, i.e., the rate of interest that would prevail in the absence of money. Ludwig von Mises was greatly influenced by this idea and developed on its basis a theory of the business cycle in The Theory of Money and Credit (1912). Wicksell also was an important contributor to the theory of public finance. His “unanimity principle” as a criterion of public policy was a major influence on the Public Choice School and figures prominently in The Calculus of Consent, by James Buchanan and Gordon Tullock.
London: George Allen, 1934. NY: Augustus Kelley, 1970.
