Reply To: Böhm-Bawerk's refutation of the exploitatio theory

[jmherbener]

I don’t think the socialists could take that line as effectively. After all sometimes business earns profit and sometimes it suffers losses. Karl Marx was trained as a classical economists and argued more tellingly from a general equilibrium position in which there are neither entrepreneurial profits nor losses. How then, could a classical economist who had no time preference theory of interest, explain the normal rate of return to investment?

You might try reading Boehm-Bawerk’s book to get an historical perspective:

http://library.mises.org/books/Eugen%20von%20B246hm-Bawerk/Karl%20Marx%20and%20the%20Close%20of%20His%20System.pdf