Frank Albert Fetter, Review of Böhm-Bawerk, Capital und Capitalzins

Frank Albert Fetter’s book review, originally published in the Journal of Political Economy in March 1901 and republished in the supplied 1977 version, examines the second German edition of Böhm-Bawerk’s historical and critical study of interest theories, issued in 1900. Fetter combines admiration for its scholarly achievement with criticism of its treatment of recent economic thought. The review moves from an assessment of the book’s influence to an inventory of its additions, then to a comparison of the attention given to different national literatures. It closes by questioning whether Böhm-Bawerk’s conception of capital can withstand developments that his historical survey insufficiently recognizes.

Fetter begins by distinguishing intellectual influence from agreement with conclusions. Economic and social inquiry has expanded amid rapid industrial change, but Böhm-Bawerk’s book deserves exceptional credit for stimulating abstract analysis. Its achievement is chiefly methodological:

Its importance lay not so much in the conclusions it reached, for it was almost entirely historical and critical, as in its method of acute analysis, its example of tireless research and scholarship, and its awakening of thought.

This judgment establishes the review’s governing distinction between the value of critical scholarship and the adequacy of a positive theory. Fetter even suggests that the more widely discussed companion volume, The Positive Theory of Capital, derives part of its authority from the earlier work’s research and analytical rigor. His later objections therefore do not cancel the opening praise: a book can transform a discipline’s standards of inquiry while leaving its author’s own concepts open to criticism.

Since the established portions are already familiar, Fetter concentrates on the revised edition. Böhm-Bawerk presents its corrections as minor and its additions as substantial, without changing his position on essential questions. Fetter records 192 added pages: 23 in the preface, 54 on John Rae, 25 on Marx’s third volume and the associated controversy, and 90 in a concluding chapter on contemporary interest literature. These figures show that the edition’s principal novelty lies in extending its historical and critical coverage, rather than reconsidering its theoretical commitments.

The review then asks what this enlarged coverage reveals about the international distribution of economic research. Fetter counts 88 newly indexed authors and sorts them by nationality and language, but immediately limits the evidentiary value of that exercise:

But this alone is not a fair test of the relative attention given to them by Böhm-Bawerk.

An indexed name may receive no more than a passing mention or footnote. Fetter accordingly shifts from counting authors to estimating the pages devoted to them. This is an important conceptual move: the presence of a literature in a bibliography is not equivalent to substantive engagement with its arguments. On his accounting, after excluding material not assignable to particular writers or countries, German writers receive 42 percent of the additions and English-language writers 58 percent, divided between America and England. The comparison offers grounds for what he calls harmless national pride, but he treats it as qualified evidence rather than a definitive measure of intellectual achievement.

John Rae makes the classification especially unstable. Böhm-Bawerk identifies him as Canadian; Mill describes him as a Scotsman settled in the United States; his book appeared in Boston in 1834; and its renewed prominence followed an essay by Mixter. Fetter proposes an American claim while acknowledging that so much space devoted to an older, rediscovered writer weakens any inference about contemporary American productivity. He balances that reservation by observing that much of the German discussion likewise concerns Marx’s posthumous volume and an established controversy over surplus value. National attribution, historical rediscovery, and the reviewer’s selection of opponents all complicate the apparent arithmetic of scholarly progress.

The sharper criticism concerns which contributions receive serious attention. Marshall occupies a substantial place, while American writers Macvane, Walker, and Carver receive varying amounts of discussion. Yet Fisher and Clark, whose contributions Fetter regards as especially important, are barely noticed. The issue is not simply whether American economists receive enough pages, but whether the revised work identifies the arguments most capable of advancing the theory of interest:

It is hard to reconcile oneself that so much energy has been wasted in refuting trite eclecticism, when original and farreaching contributions by these Americans are all but passed in silence.

Here the survey of national representation becomes a criticism of intellectual priorities. Extensive rebuttal is not necessarily fruitful criticism: scholarly energy can be spent on familiar positions while more consequential innovations remain unexamined. Fetter does not reconstruct Fisher’s or Clark’s arguments in this short review. He uses their neglect to expose a limitation in the revised volume’s claim to represent contemporary debate.

The promised revision of The Positive Theory of Capital offers an opportunity to address that omission, but also a more demanding test:

The movement of economic thought is rapidly leaving behind it the concept of capital with which Böhm-Bawerk works.

Fetter expects Böhm-Bawerk to retain his standpoint and deploy his considerable analytical ability against objections and charges of inconsistency. The review ends with anticipation rather than a demonstrated refutation. Its significance lies in that tension: it honors a foundational achievement in the history and criticism of interest theories while insisting that scholarly authority cannot substitute for engagement with changing concepts of capital.