- 10 Mar, 23
Eugen von Bawerk 101: The Economist of Austrian School
Eugen von Boehm-Bawerk was an Austrian economist and a significant figure in the Austrian School of Economics. If you want to learn more about Boehm-Bawerk, you are in the right place. In this article on Zatrun.com, you can find everything you need to know about him.
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Who is Eugen von Boehm-Bawerk?
Eugen von Boehm-Bawerk was one of the leading economists in the late 19th and early 20th centuries in the Austro-Hungarian Empire. He made important contributions to the development of neoclassical economics and served as Austria’s Minister of Finance from 1895 to 1904. Bawerk also wrote extensive critiques of Marxism.
He followed the theories of Carl Menger and was a pioneer in studying the functioning of financial markets and determining wages. Bawerk served as a consultant for the Austrian government on tax reforms and budget balancing and as its Minister of Finance. His greatest work, “Capital and Interest” (Capital und Capitalzins), is still an important reference in economics.
Eugen von Boehm-Bawerk began his education by studying law at the University of Vienna. However, while there, he read Carl Menger’s “Principles of Economics” and became committed to Menger’s theories. After completing his education at Heidelberg, Leipzig, and Jena universities, Bawerk joined the Austrian Ministry of Finance in 1872 and became a lecturer on economics at the University of Vienna in 1880.
Bawerk became a consultant for the Austrian Ministry of Finance and represented the government on taxation matters in 1889. He became the Minister of Finance in 1895 for a short period and held the position until 1904. He worked to maintain the gold standard and a balanced budget during his tenure.
He abolished the sugar subsidy, a characteristic feature of the Austrian economy in 1902. However, the military’s financial demands disrupted the budget balance, and he resigned in 1904. Bawerk’s works remain influential today and were even used on euro banknotes until 2002.
“Capital and Interest”
Eugen von Boehm-Bawerk’s book, “Capital and Interest,” is considered by Ludwig von Mises to be the most important contribution to modern economic theory. The book’s first volume, “Geschichte und Kritik der Capitalzinstheorien” (History and Critique of Capital Interest Theories), examines various topics, including the alternative use theories of interest, productivity theories, and abstention theories.
Bawerk also critiques Marx’s theory of exploitation. He argues that capitalists do not exploit their workers, but instead earn a return on their investment in the form of profit, which is earned from the goods produced by workers. He also criticizes Marx’s labour theory of value, stating that value is not determined solely by the amount of labour put into a product but also by the consumer’s perception of the product’s usefulness or desirability.