Joseph A. Schumpeter: Review of Böhm-Bawerk’s Positive Theorie des Kapitales (1910)

Schumpeter’s brief review assesses the first half-volume of the third edition of Eugen von Böhm-Bawerk’s Positive Theorie des Kapitales, published in 1909. Its central judgment is that sustained engagement with two decades of criticism has enlarged and strengthened Böhm-Bawerk’s treatment of capital without altering his theoretical position.

Unlike the unchanged second edition, the third incorporates an extensive discussion of subsequent scholarship. Schumpeter distinguishes the revised main text, which retains the original line of argument, from five new excursuses on questions concerning roundabout production and a sixth carried over from the earlier edition. He presents this combination of exposition and specialist inquiry as an exceptional theoretical achievement:

Er hat auf diese Weise ein Handbuch der ganzen Frage und ein Muster theoretischen Denkens geschaffen.

English translation: In this way he has created a handbook of the whole question and a model of theoretical thinking.

The praise concerns both comprehensiveness and analytical method. Schumpeter treats the prevalence of criticism—particularly from America—as evidence of the work’s centrality: much of the field’s new thinking had developed through opposition to Böhm-Bawerk. Critical reception thus becomes a measure of intellectual influence, rather than evidence that the theory has been displaced.

Das Resultat ist, daß der Autor an seiner Stellung nichts zu ändern findet, im Gegenteil sich darin nach erneutem Durchdenken noch gefestigt fühlt.

English translation: The result is that the author finds nothing to alter in his position; on the contrary, after renewed reflection he feels himself confirmed in it still further.

Schumpeter reports Böhm-Bawerk’s reaffirmation without reconstructing or independently proving the theory. He identifies the decisive disputed concept as the disproportionately greater productivity of roundabout production. Objections from Lexis and American economists prompted further explanations and new arguments; the edition also contains a new second section of Book II and incorporates results from Böhm-Bawerk’s intervening critical writings. The review’s significance lies in this concise portrait of theoretical consolidation: an established account of capital absorbs controversy into a broader, more systematically defended exposition.