Frank Fetter Points Out the Major Contradiction in Böhm-Bawerk's Theory of Interest

Critics of the Positive Theory have frequently declared in effect that, while its author had ejected the productivity of capital from the front yard of his theory, he had opened to it the side door and had given it the freedom of the house. For what place are we to assign in the broad theory of interest to the “productiveness of the roundabout process”? Is it the main and fundamental, or is it only a supplementary and partial, explanation of the cause of interest? The essay under review certainly puts it in the central and leading place: it is the greater productiveness of labor when applied in a long and roundabout way which is the great and efficient cause of interest on capital. If that is not the impression left on the reader of this essay, and the one the author intends to leave, then we have missed its purpose. And yet this is out of harmony, first, with the author's own strong negative criticisms of productivity theories as affording only incomplete answers to the interest problem and, secondly, with his formal statement of the theory of interest as due to the difference between the value of present and that of future goods.

—Frank A. Fetter, “Review of Böhm-Bawerk, Einige strittige Fragen der Capitalstheorie,” in Capital, Interest, and Rent: Essays in the Theory of Distribution, ed. Murray N. Rothbard (Kansas City: Sheed Andrews and McMeel, 1977), 89-90.