Erich Voegelin, Die Zeit in der Wirtschaft

Erich Voegelin’s five-part journal article (1924/1925; exact issue year unresolved) reconstructs economic theory around time as an internal dimension of economic activity. Against static valuation and the conception of time as an empty container, it locates economic action in the deliberate transformation of historically given patterns of satisfaction. Its discussions of value, capital, investment, and interest culminate in a distinction between economic functions and their distribution among social classes.

Section I exposes ambiguities in the opposition between statics and dynamics through Marshall, Clark, and other theorists. A strictly stationary economy would eliminate the allocation and valuation that make activity economic:

Stationäre Wirtschaft ist also eine contradictio in adjecto insofern in ihr die für das Wesen der Wirtschaft eigentümlichen Phänomene des Widmens und Wertens fehlen.

English translation: A stationary economy is thus a contradiction in terms insofar as it lacks the phenomena of allocation and valuation peculiar to the essence of economic activity.

Voegelin then attacks competing calculations of a stock’s total value. Böhm-Bawerk’s cumulative calculation and Wieser’s marginal-value rectangle each combine one side of the goods–needs relation with only a quantitative component of the other. Neither adequately establishes what is being measured. The alternative begins with the finitude of consumption: eating satisfies not only an immediate appetite but also provides satiety for a subsequent interval. Valuation concerns this temporally extended pattern, not an isolated encounter between goods and needs.

Section II develops the argument through controversies over capital. Clark distinguishes an enduring value fund from its changing material embodiments, but his static account cannot explain a net return beyond the replacement of production costs. Tuttle’s surplus fund and Hawley’s unexpended purchasing power bring capital closer to its dynamic function: enabling the redirection of production before its results become available. Voegelin nevertheless rejects the restriction of investment to the conspicuous business entrepreneur:

Durch die scharfe Trennung der Kaufkraft von den Gütern, in denen man sie investieren kann, verschwindet der Unterschied zwischen der Gründung eines Stahltrusts und dem Ankauf eines Brotes: Beide Wirtschaftshandlungen sind Investitionen, die sich nur dem Grade nach voneinander unterscheiden.

English translation: Through the sharp separation of purchasing power from the goods in which it can be invested, the distinction between founding a steel trust and purchasing a loaf of bread disappears: both economic actions are investments that differ from one another only in degree.

This extension of investment to consumption supports the article’s central conceptual shift. Neither goods nor needs are the ultimate objects of valuation; valuation concerns possible changes in a historical economic situation. Voegelin calls its alternating pattern of immediate enjoyment and subsequent satisfaction the time–finitude rhythm. Its variation is constrained by material resources, purposes, and uncertainty, and ultimately by the impossibility of indefinitely postponing consumption or exhausting every resource in the present. Marginalism’s concern with limits survives, but as the bounded range of possible transformations rather than a measurable marginal value.

Section III reunites valuation and investment as aspects of one process. Drawing critically on Max Weber, Voegelin argues that technical choice cannot be separated essentially from economic direction. Likewise, humanity and nature are not independent substances subsequently joined by value: their opposition is an intentional differentiation within a unified, self-directing process. Time itself emerges through that process:

Die Wirtschaft vollzieht sich also nicht in der Zeit, sondern die Zeit ist jenes Element in der Wirtschaft, das in jedem Punkt des Wirtschaftsprozesses mit bestimmter Rhythmik und zugleich Variation der Rhythmik und mit bestimmten immanenten Gesetzen, neu geboren wird.

English translation: Economic activity therefore does not take place in time; rather, time is that element within economic activity which is born anew at every point of the economic process, with a determinate rhythm and simultaneously a variation of that rhythm, and with determinate immanent laws.

Section IV tests this reconstruction against Fetter’s time-value and Fisher’s time-preference theories. Their approaches help connect goods valuation with profit and interest, but retain unstable distinctions between capital and consumption goods. For Voegelin, comparisons of the supposedly same good at different dates obscure its changing position within the whole economic situation. The puzzle of a finite land price against infinitely many future yields likewise rests on importing homogeneous, infinite time into economic valuation.

Section V turns to Veblen and the social organization of economic direction. Every individual both directs and undergoes economic variation, yet concentrated control of productive resources allows these functions to acquire opposed social representatives. Entrepreneurial and consumer or wage-worker classes express this division; they are not separate kinds of economic subject. The article’s significance lies in connecting a temporal reconstruction of value to a carefully delimited account of social power: economic functions explain the poles of class formation without exhausting the complexity of historical societies.