Joseph A. Schumpeter: Review of Ernst Bundsmann’s Das Kapital. Wirtschaftstheoretische Skizzen (1913)

Schumpeter’s short review assesses Bundsmann’s attempt to connect interest with money. He recognizes independent theoretical effort and a promising direction of inquiry, but argues that Bundsmann neither adequately grounds his explanation nor reconciles its competing premises. The review concentrates on the first two sketches; the remaining discussions of credit, income, balance sheets, and taxation chiefly develop consequences of the initial conception.

Bundsmann begins with Thünen’s and Böhm-Bawerk’s theories of interest. Tool production requires subsistence during the interval before its completion. Those controlling subsistence goods therefore possess what Bundsmann calls a monopoly, allowing them to retain a gain that would otherwise disappear through production costs or falling product values. Schumpeter identifies the precise theoretical substitution:

Also eine Theorie, die sich von der v. Böhm-Bawerks dadurch unterscheidet, daß sie das Moment des »Geringersehens künftiger Genüsse« ausschließt und durch das »Monopol« ersetzt.

English translation: A theory, then, which differs from that of v. Böhm-Bawerk in that it excludes the element of the "undervaluation of future enjoyments" and replaces it by "monopoly".

He doubts that this replacement succeeds, but explicitly leaves his counterarguments undeveloped. His decisive criticism concerns the second sketch, which presents money itself as a source of income because productive expenditure must precede receipts.

Denn in diesem Fall wäre der Geldzins lediglich ein Ausdruck jenes »Genußgüterzinses«.

English translation: For in this case the rate of interest on money would merely be an expression of that "interest on consumption goods".

This conditional claim exposes the incompatibility between Bundsmann’s two explanations. If control over consumption goods ultimately makes production possible, money merely represents access to those goods. Treating monetary possession as an additional, independent source of income would count the same return twice. Conversely, if money independently yields interest, the first sketch’s explanation cannot stand as given.

Schumpeter’s objection is consequently directed at the explanatory argument, not at its monetary orientation:

Dabei liegt es mir völlig fern, der Ansicht, daß der Zins am Geldbesitz hänge, prinzipiell entgegentreten zu wollen. Sie ist vielmehr meine eigene.

English translation: In saying this I am far from wishing to oppose on principle the view that interest attaches to the possession of money. On the contrary, it is my own.

The conclusion gives the review its broader conceptual significance. A monetary theory must establish how and under what circumstances money as such bears interest; asserting that production requires advance expenditure does not suffice. Until that mechanism is demonstrated, Bundsmann’s identification of capital with money remains unjustified. Schumpeter thus uses a sympathetic but critical reading to distinguish a promising theoretical position from a coherent explanation of interest.