F. A. Hayek, “Zur Problemstellung der Zinstheorie”

Hayek’s 1927 essay is a critique of the question that made Böhm-Bawerk’s theory of interest seem unavoidable. Since Böhm-Bawerk, interest had usually been posed as the persistent value difference between productive goods and the later products made from them—the “fold” in which interest lies. Agio theories explained that difference by a regular undervaluation of future wants. Hayek asks whether this psychological premise is really demanded by subjective value theory:

Macht die Böhm-Bawerksche Formulierung des Kapitalzinsproblemes die Annahme einer Minderschätzung künftiger Bedürfnisse unvermeidlich?

English translation: Does Böhm-Bawerk's formulation of the problem of interest on capital make the assumption of an underestimation of future wants unavoidable?

His answer is no. Böhm-Bawerk, Hayek argues, transfers a rule of intratemporal value theory to an intertemporal case. Productive goods and products have equal value only under definite equilibrium conditions, when production is extended until product value has fallen to the value of the means. The prior question is therefore not why a value gap exists, but why longer and shorter production processes are not arranged so that their products from the same means have equal value. With time-consuming “roundabout” methods, this equalization would require a peculiar result: because longer processes yield more output, the marginal utility of the larger future stock would have to be driven below that of the smaller present stock. Hayek’s diagrammatic section makes this point: Böhm-Bawerk’s solution presupposes an overextension of future provision, as if rational action required present want-satisfaction to be cut off until later goods became sufficiently abundant.

The essay’s decisive move is to deny that intertemporal production can be governed by isolated comparisons of marginal utilities. Drawing on Wieser, Mayer, Schönfeld, and Strigl, Hayek shifts the object of analysis from separate uses of a good to whole economic plans extended through time. Within a short period, single-use comparisons may serve as an abbreviated procedure; across distant periods, the alternatives are different temporal distributions of life and provision. What matters is

nicht isolierte Einzelnutzenvergleiche in dem hier gebrauchten Sinn, sondern das Bestreben nach einer ganz bestimmten Gestaltung bzw. Abstufung der Bedürfnisversorgung in der Zeit

English translation: not isolated comparisons of individual utilities in the sense used here, but rather the striving for a quite definite shape or gradation of the satisfaction of wants over time

This shift also fixes the limits of theory. Hayek rejects both universal claims: that actors always prefer present provision, or that they must sacrifice present provision whenever a larger future utility is possible. Economic theory can only construct a framework into which different empirical patterns of temporal preference may be inserted. Hence the “time problem” is not a minor addendum to value theory. It exposes the inadequacy of deriving equilibrium from a fixed ranking of isolated ends and forces value theory to consider the chosen shape of satisfaction over successive periods.

The structure of the essay follows this reconstruction. Hayek first presents the Böhm-Bawerkian formulation; then he modifies it by asking about the organization of production rather than merely value relations; then he uses the productivity of longer production methods to show why product/means equality is not required across periods; finally he rethinks statics. A static economy that unfolds through time can be represented as static only by assuming unchanged wants, unchanged productive means, and an aim at equal provision in successive periods. On that basis, interest is not an abnormal residue to be explained away by time preference. In the static benchmark it coincides with the physical productivity opened by time.

Hayek’s conclusion is both methodological and substantive. The Böhm-Bawerkian puzzle dissolves because there is no rule requiring equality between means and products available at different dates:

es daher auch keine Regel gibt, nach der der Wert von Produktionsmitteln und Produkten, die in verschiedenen Perioden zur Verfügung stehen, übereinstimmen »sollte«

English translation: there is therefore also no rule according to which the value of means of production and of products available in different periods 'ought' to coincide

The relevance of the essay lies in this reversal. Interest need not rest on a general “Minderschätzung künftiger Bedürfnisse”; the productivity element can be restored, while “dynamic” theories that exclude interest from static equilibrium lose their ground. In Hayek’s strongest formulation,

eine statische Wirtschaft ohne Bestehen der im Zins zum Ausdruck kommenden Wertdifferenz zwischen Gegenwarts- und Zukunftsgütern undenkbar ist

English translation: a static economy is inconceivable without the existence of the value difference between present and future goods that is expressed in interest

The essay does not provide a complete determination of the rate of interest. It clears the conceptual ground for one by making time internal to value theory. Interest arises not from a psychological discount added to timeless marginal utility, but from the intertemporal coordination of production plans and the desired distribution of want-satisfaction.