Hayek on Heinze’s Statische oder dynamische Zinstheorie? (1929)

Friedrich August von Hayek’s review assesses Gerhard Heinze’s critical comparison of Cassel’s and Schumpeter’s interest theories with Böhm-Bawerk’s. Hayek praises the study’s care, analytical acuity, and systematic organization, while finding its exposition unnecessarily expansive. His central judgment is that Heinze successfully establishes Böhm-Bawerk’s continuing superiority over the two alternatives, without thereby dismissing every criticism of that theory.

The review follows Heinze’s movement from conceptual clarification to criticism of particular explanations of interest. Its starting point is the different meanings Cassel and Schumpeter attach to statics and dynamics. Hayek considers Heinze’s treatment in some respects more satisfactory than that of his teacher Streller, especially in identifying Schumpeter’s inconsistent use of “dynamics.” Agreement with Cassel on this conceptual issue does not, however, entail acceptance of Cassel’s explanation of interest. Heinze’s examination of the authors’ positions on Böhm-Bawerk’s “three reasons” undermines Cassel’s claims to originality and the force of his objections.

Besonders verdienstlich ist hier die Kritik, der H. den unklaren Begriff der Kapitaldisposition unterzieht.

English translation: Particularly meritorious here is the criticism to which H. subjects the unclear concept of capital disposition.

This praise singles out conceptual precision as a standard of theoretical assessment. Hayek finds Schumpeter’s theory still more vulnerable: alongside the shifting meaning of dynamics, he endorses Heinze’s objections to the role of synchronization. He also highlights Heinze’s contention that entrepreneurial creative power is itself a datum, just as the value functions of static economic agents are. The point challenges the conceptual distinction on which Schumpeter’s account depends, rather than simply invoking the entrepreneur as an explanation of economic change.

The review then turns to capital, credit, and additional purchasing power. Hayek finds little novelty in Heinze’s treatment of the last issue and objects that the discussion of Cassel’s bank-interest and real-interest relationship neglects Wicksell, from whom Cassel derived those views. Further omissions include F. A. Fetter, G. Akerman, and especially H. Oswalt, whose presentation Hayek regards as a substantially clarified version of Cassel’s theory. These are substantive gaps, not merely failures to include the latest publications, although they do little to diminish the study’s overall achievement.

Hayek’s closing endorsement gives the review its significance within the debate over interest theory:

Das Hauptergebnis, daß trotz aller, sicherlich teilweise berechtigten Angriffe, die Böhm-Bawerksche Zinstheorie bis jetzt immer noch die logisch einwandfreieste und den Tatsachen am nächsten kommende ökonomische Erklärung der Zinserscheinung liefert, scheint uns durch die Darlegungen des Verfassers gegenüber den Theorien Schumpeters und Cassels jedoch zureichend begründet.

English translation: The main result, however — that in spite of all the attacks, which are certainly in part justified, the Böhm-Bawerkian theory of interest still provides to this day the logically most unobjectionable economic explanation of the phenomenon of interest, and the one that comes closest to the facts — seems to us sufficiently well founded by the author's expositions as against the theories of Schumpeter and Cassel.

The qualification matters: Böhm-Bawerk’s theory remains open to partly justified objections, yet Hayek judges it comparatively strongest in logical coherence and proximity to economic facts. The review thus combines a methodological demand for stable concepts and adequate engagement with prior literature with a bounded defense of Böhm-Bawerk against Cassel and Schumpeter.