Weiss examines Richard Strigl’s explanation of capital interest as the residue remaining after wages and land rent have been deducted from production’s proceeds. His criticism concerns both the origin of interest and the claim that competitive payments according to marginal productivity exhaust the product. He presents the controversy as consequential for distribution theory:
Einige kritische Bemerkungen dürften daher um so eher angebracht sein, als sich die Bedeutung der von Strigl ausgesprochenen Gedanken weit über die Zinstheorie hinaus auf das Gebiet der gesamten Verteilungslehre erstreckt.
English translation: A few critical remarks may therefore be all the more in place, since the significance of the ideas expressed by Strigl extends far beyond the theory of interest into the field of the theory of distribution as a whole.
The argument begins with Clark’s treatment of labor and capital, including land, as productive factors remunerated according to their marginal products. In static equilibrium, these payments exhaust output. Weiss emphasizes the dual character of Clark’s capital concept:
Das Kapital besteht aus den konkreten Produktionsinstrumenten (»capital goods«), es ist aber zugleich, in seiner Eigenschaft als »true capital«, ein beständiger, dauernder Fonds (»permanent abiding fund«), eine in den konkreten Gütern verkörperte Wertmenge.
English translation: Capital consists of the concrete instruments of production ("capital goods"), but it is at the same time, in its character as "true capital," a constant, enduring fund ("permanent abiding fund"), a quantity of value embodied in the concrete goods.
Strigl disputes product exhaustion as an unproved technical proposition. Separating land from capital, he instead understands capital as a wage-and-rent fund enabling roundabout production. For Weiss, changing the definition does not establish that capital’s remuneration escapes marginal determination or that a residual theory explains interest. He limits the purpose of his discussion accordingly:
Das Gesagte soll weder einen Beitrag zu dem Streit um den Kapitalsbegriff, noch ein Argument gegen die Zweckmäßigkeit der Terminologie Strigls liefern.
English translation: What has been said is meant to furnish neither a contribution to the dispute over the concept of capital nor an argument against the expediency of Strigl's terminology.
Weiss also rejects Strigl’s reading of Böhm-Bawerk’s criticism of Clark as a rejection of marginal productivity itself. His defense is selective: objections to Clark’s particular theory of interest do not invalidate every application of marginal-productivity reasoning.
He next challenges Strigl’s picture of the static entrepreneur as merely administering the capitalist’s property and transmitting an unchanged residue. Equilibrium must be understood through the competitive adjustments establishing it. Entrepreneurs choose combinations of labor, land, and capital; competition eliminates entrepreneurial profit without making those choices irrelevant. Even under stationary conditions, a larger capital fund permits longer production processes with unchanged quantities of labor and land. Capital therefore cannot simply be exempted from the reasoning applied to the other factors.
The residual theory’s decisive weakness is causal. Strigl’s argument would allow a surplus even in instantaneous production employing only labor and land. A remainder that could arise without capital cannot, merely because capital participates elsewhere, explain an income specifically attributable to it. Weiss thus distinguishes an accounting balance from an explanation of capital interest.
He then treats product exhaustion as an independent problem. Strigl imagines dissolving an enterprise and transferring its workers and land units to similar enterprises, asserting that their separate marginal contributions would be less than their former joint output. Weiss contests the alleged obviousness of this result: small changes in factor proportions do not establish that the transferred resources would serve only incidental purposes.
Drawing on Wicksell, Weiss develops a counterargument assuming perfectly divisible factors and unchanged productivity when production expands proportionally. At given wages and rents, an optimal factor combination equalizes marginal product relative to factor price. If a proportional addition of labor and land produced more than its cost, profitable expansion would remain possible, contradicting static equilibrium. With sufficiently small units, the combined addition’s contribution approaches the sum of the separate marginal contributions. Indivisibility qualifies this reasoning: where individual-factor calculations leave a remainder, the relevant unit becomes the smallest feasible combination of factors.
Weiss nevertheless questions the dominant explanatory role assigned to marginal productivity by Clark and his followers. His final substantive objection concerns Strigl’s transfer of market-distribution reasoning to subjective imputation in an economy without exchange. Competition may make the total wage bill equal the number of workers multiplied by the price of the marginal product. It does not establish that the subjective value of all labor services equals the corresponding multiple of one marginal valuation; replacement possibilities also matter. Closing with recognition of Strigl’s serious engagement, Weiss maintains three central distinctions: accounting remainder versus causal explanation, static equilibrium versus passive administration, and competitive price formation versus subjective valuation.
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