Quarterly Journal of Austrian Economics 19, no. 2 (Summertime 2016)
“On the Occasion of the Tenth Anniversary of His Death”
[Translator’s Note: A records of the German language initial under the title “Der Financial expert Eugen v. Böhm-Bawerk– Zu seinem 10. Todestage” has actually been found in one of Bettina Bien Greaves’s books at the Mises Institute. The text was originally published in the Neue Freie Presse (New Free Press), a Viennese paper which was founded by Adolf Werthner, Max Friedländer, and Michael Etienne. It existed from 1864 until 1938. Böhm-Bawerk’s last publication “Unsere passive Handelsbilanz” (“Our passive balance of trade”), from which Mises quotes, was likewise released in this newspaper, and has, to our knowledge, never ever been translated into English.– Karl-Friedrich Israel]
Eugen v. Böhm-Bawerk will stay unforgotten for all those who have known him. The trainees, who delighted in the fortune of attending his workshops, will never lose what the associate with such a strong mind has given them. For the political leaders, who have actually met him as a statesman, the integrity of his ethos and his selfless dedication to task will continue to be excellent. And no citizen of this nation will forget the minister of finance, the last Austrian minister of financing, who, in spite of all obstacles, earnestly targeted at balancing the public budget plan and avoiding the upcoming financial disaster. However even when the lives of all those who had understood him personally have actually concerned an end, his scientific oeuvre shall reside on and bear fruit.
In his scientific work Böhm-Bawerk focused from the outset on the central issue of theoretical economics, the interest issue. At the age of twenty-five, in the spring of 1876, he offered a lecture on the interest on capital in the Knies workshop in Heidelberg, which currently included the highlights of what would later become his famous agio theory of interest. Prior to he might however release his work, there were tough preliminary concerns to address. It was to these questions that he committed his work. Always keeping the supreme things in mind, he released Rechte und Verhältnisse vom Standpunkte der volkswirtschaftlichen Güterlehre in 1881, Pass away Geschichte und Kritik der Kapitalzinstheorien in 1884, Grundzüge der Theorie des wirtschaftlichen Güterwertes in 1886, and lastly his Positive Theorie des Kapitals in 1889. His work was thus given completion. As Senior Legal Secretary and Head of Department in the ministry of financing, as k. u. k. Minister of Finance and President of the Senate of the Higher Administrative Court, he had really little leisure in the following years to perform any clinical work. Only after 1904, when he retired from workplace for the 3rd and last time, might he dedicate himself once again undisturbed to his research study. A series of excellent works is the fruit of vigorous effort during the last decade that he was permitted to live. He passed away on August 27, 1914, when the Austrian armies were about to fight the very first fights of the Great War in Poland and Eastern Galicia.
Böhm-Bawerk’s scientific work has actually quickly discovered the recognition it richly should have. His magnum opus was translated into English by William Smart as early as 1890; quickly later on a French edition followed. In England, the United States, France, Italy, the Netherlands, Sweden, and Denmark, his teaching ended up being the beginning point for additional extensive analyses and research studies. Sure enough, in Germany an understanding of Böhm-Bawerk’s achievements was long missing. The dominating doctrine at the universities neglected him. It took years before the accomplishments of the “Austrian School” were acknowledged in the Reich. Today, nevertheless, it is considered a serious misery that just Böhm-Bawerk’s magnum opus, which is currently in its 4th German language edition, is quickly available. His much shorter works, which are essential for any friend of financial query, are rather hard to access. It is therefore a thankworthy business to republish them in a gathered edition. A student of Böhm-Bawerk, well known for a number of clinical works, has resolved himself to this job. The well-endowed volume, which is beautified with a felicitous portrait of Böhm, includes the above mentioned work Rechte und Verhältnisse, in addition to a system on general theory and approach, essays on the theory of value, and lastly an essay that has actually been published on January 6, 8, and 9, 1924 in the Neue Freie Presse, entitled “Unsere passive Handelsbilanz.” It starts with a short biographical introduction by the editor, Dr. Franz X. Weiss. The essays on capital and interest, which are not included in this collection, will be republished in a different volume.
To praise the significant value of the theoretical works collected in this volume would be like bringing owls to Athens. For the specialists and numerous intellectuals who are interested in economic questions, this would hardly constitute anything brand-new. Let us, however, price quote some sentences from the above pointed out essay on the passive balance of trade, simply to highlight the sharpness with which Böhm has early on pointed to the basic problem underlying our state financial resources. It checks out:
[T] hrift is never popular … If parliaments have traditionally been the guardians of thrift, they now have actually turned much rather into its sworn enemies. Nowadays, the political and nationwide celebrations– maybe not specifically in our own country, however definitely also here– tend to develop a certain covetousness, almost thought about to be devoted, for all kinds of benefits for their own electorate at the expenditure of the general public. And when the political circumstance is fairly practical, that is to say, if it is reasonably bothersome for the government, one’s ends can be attained through political pressure.
Our population struggles with cost-effective megalomania. This is to name a few things revealed by the “financial investments from the public handbag.” One is often incorrect when using the well-known motto of “indirect performance” of public spending, even if at times the indirect advantages of public business, which are unprofitable on their own, may go beyond the amount that has to be paid from public funds for their passive operations. The “blind eulogists of frivolous financial investment policies” will feel the mistakes of their technique
… only when, like nowadays, the capital stock has actually been exhausted by the public sector over several years to a degree that capital is doing not have for the most essential and vital private businesses in all spheres, just when numerous enterprises start to stumble, numerous jobs need to remain reversed, and all suffer severely from the increased interest rate.
These were the last words that Böhm-Bawerk dealt with to Austria’s financial authorities. Today they will be valued more highly than at the time when they were first released in this paper.