Böhm-Bawerk’s journal article presents the fundamental arguments of his recently published Théorie positive du capital to a French readership. Its two-part structure separates the explanation of capital’s role in production from the explanation of interest. The central thesis is that interest arises from the difference between the present valuation of present goods and that of otherwise equivalent future goods—not from an independent productive power inherent in capital. The article moves from definitions and physical production processes to subjective valuation, then explains three forms of capital income and defends their legitimacy.
The opening distinction is between capital productif, products destined for further production, and capital lucratif, products used to acquire other goods. The latter includes productive capital but also rented consumption goods: houses, furniture, and pianos can yield income without participating in production. Land belongs to neither category because it is an original productive resource, not a product. These definitions prevent an explanation appropriate to one class of goods from being transferred uncritically to another merely because both are called capital.
Mais le capital facteur de la production n'est nullement identique avec le capital qui rapporte un intérêt.
English translation: But capital as a factor of production is by no means identical with capital that yields interest.
This conceptual separation supports the article’s methodological demand for two theories. In the production section, Böhm-Bawerk recognizes only nature and labour as original productive forces. Capital goods are intermediate products formed through their cooperation. Hooks, boats, nets, and water conduits illustrate how indirect production recruits natural forces that human hands cannot command unaided. Capital is therefore an instrument within a sequence of productive operations, not a third elementary source alongside nature and labour.
The benefit of these productive “detours” is greater output from a given quantity of original productive resources. Further extensions can increase output again, but the additional gains diminish. Their indispensable counterpart is delay:
Les détours de production par le capital procurent finalement plus de biens de jouissance, mais il faut les attendre plus longtemps.
English translation: Roundabout production through capital ultimately provides more consumption goods, but one must wait longer for them.
Time thus enters the account before interest does. Existing capital marks an advantageous detour already chosen, helps complete it, and can release current productive resources for further undertakings by supplying consumption goods from past work. Böhm-Bawerk rejects the elevation of these intermediate stages into independent productive causes. He suggests that economists preserve the three-factor classification partly because they believe interest requires a separate productive contribution to justify it.
Capital formation nevertheless requires both productive labour and saving. Labour makes the tools; saving releases the resources needed to make them. Robinson’s choice between fuller daily consumption and time spent constructing hunting equipment illustrates this allocation. The same reasoning applies to a nation: resources cannot serve immediate consumption and the creation of intermediate products simultaneously. Saving here means foregoing consumption to free productive capacity, not simply accumulating machines already made.
The second part explains interest through the higher present valuation of goods available now. Böhm-Bawerk offers three causes: urgent present needs relative to available supplies; the psychological tendency to discount future pleasures and pains; and the technical advantage of possessing provisions while undertaking longer, more productive detours. He considers the third especially important. Present subsistence enables a fisherman to build equipment rather than remain dependent on immediate, low-yield fishing. Subjective valuations, meeting in exchange, establish a market premium for present goods.
Le prêt n'est autre chose qu'un échange de biens présents contre des biens futurs, et c'est la forme la plus pure et la plus simple sous laquelle un tel échange puisse s'effectuer.
English translation: A loan is nothing other than an exchange of present goods for future goods, and it is the purest and simplest form in which such an exchange can take place.
Loan interest is the additional future payment that equalizes the values exchanged, not rent for a continuously usable quantity of money. Productive profit requires a further conceptual move: the value of productive means derives from their anticipated products, rather than the reverse.
Tous les biens productifs sont en quelque sorte marchandise de l'avenir.
English translation: All productive goods are, in a sense, merchandise of the future.
Although physically present, inputs—including labour—represent consumption goods available only after production. Their price reflects that future output’s discounted current value. As production finishes, the discount disappears; this appreciation explains the entrepreneur’s surplus without invoking either capital’s mysterious productivity or exploitation as its necessary cause.
Durable goods extend the same argument to successive services. Their capital value is the sum of those services’ present values. In the six-year machine example, annual services worth 100 francs yield a capital value below 600 francs because later services are discounted. After a year, the remaining services have moved closer to availability and increased in present value. Depreciation therefore falls short of the current service’s gross return, leaving net income.
The concluding defence distinguishes interest’s existence from its ownership and use. A socialist community would still have to value distant products below completed present goods; collective ownership could redistribute the resulting surplus without abolishing its temporal basis.
Mais ce serait là non point détruire l'intérêt, mais seulement le distribuer autrement.
English translation: But that would not destroy interest; it would only distribute it differently.
The article’s importance lies in joining roundabout production to a unified explanation of lending, profit, and durable-property income through intertemporal valuation. Its defence remains qualified: interest can be abused, and ownership carries duties. Detailed laws governing the interest rate are left to the larger work.
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