Bohm-Bawerk, Eugen von (1851-1914)

Austrian economist whose most important contribution to economic theory was in the field of interest and capital. He subscribed to the marginal utility theory of value and applied it more closely to the theory of interest.

He propounded the time-preference theory, which states that capital is land and labour employed for deferred ends, and in the market for capital present money for the purchase of present labour is exchanged for future money at a premium. This premium is interest according to Bohm-Bawerk.

He served as minister of finance for the Austrian government on occasions between 1889 and 1904. In the latter year he was appointed professor of economics at the University of Vienna. His Kapital und Kapitalzins Theorien/Theories of Capital and Interest (1909-14) is a history and critique of past theories.