Capital, Interest, and Waiting

Reviews / Votes

"Read this respected examination of the economic function of waiting in human economic betterment." (Vernon L. Smith, Chapman University, author of Adam Smith's Theory of Society, and 2002 Nobel Laureate in Economics)

"For an intertemporal view of the price system, a better understanding of monetary policy, and an in-depth analysis of the 'economics of waiting,' there is no better book than Capital, Interest, and Waiting." (James A. Dorn, Senior Fellow Emeritus at the Cato Institute and editor of "Populism and the Future of the Fed")

"Capital, Interest, and Waiting takes a deep dive into the nature of the interest rate understood as the price paid for waiting. Authors Leland Yeager and Steve Hanke place waiting into the working of the price system and, as it turns out, the interest rate is a much more complicated phenomenon than just the interest one pays on credit card balances. For example, as a relative price, it is part of the real economy controlling market exchanges. Yet central banks set it as an instrument for implementing monetary policy. How, then, can central banks control a real price when they control something so nominal: money creation? Yeager and Hanke offer no cut-and-dried answers. Instead, they take the reader on a voyage through the insights of the most brilliant economists over the ages. One should come to this book prepared to think critically." (Robert L. Hetzel, Senior Affiliated Scholar, Mercatus Center, George Mason University; Fellow, Institute for Applied Economics, Johns Hopkins University; and author of "The Federal Reserve")

"Yeager and Hanke add substantial clarity to the complexity of capital theory by depicting interest as a payment for waiting. Their approach to capital theory clarifies past controversies and offers a theory consistent with well-established concepts in price theory. Economists will find the analysis both easy to follow and insightful." (Randall G. Holcombe, DeVoe Moore Professor of Economics, Florida State University and author of "Coordination, Cooperation, and Control")

"At the centenary of Leland Yeager's birth, here is a welcome surprise: his final magnum opus. Co-author Steve Hanke has performed an impressive feat by taking Yeager's tangled mess of a manuscript (I saw it for myself), filling in many gaps, and producing a book that preserves Yeager's distinctive writing style. The style is marked by clarity, polish, and a concern with everyday experience, not just for economists' models-though Yeager has a superb grasp of what his predecessors thought. Among the thousands of books and articles on the theory of capital, there is little else that has all those qualities." (Kurt Schuler, Senior Fellow, Center for Financial Stability)

"Yeager and Hanke created a masterful book that weaves together both intellectual history and solid economic theory. This book breaks down interest theory and the role prices play in coordinating all manner of economic activity. Students and professionals alike will find value in this thorough analysis." (Meg Tuszynski, Bridwell Institute for Economic Freedom, Cox School of Business, Southern Methodist University and coauthor of "Reason, Ideology, and Democracy")

"The passage of time imposes costs on human activity; Yeager and Hanke provide a transformative account of the implications of this. A great work by two giant interpreters of monetary phenomena." (Richard Vedder, Distinguished Emeritus Professor of Economics, Ohio University and Senior Fellow, Independent Institute)

"Capital theory has long presented an impenetrable morass to economists. Many economists have entered that morass, invariably failing to chart a clear path through it despite the prolixity of their efforts. In the 19th century, Eugen von Böhm-Bawerk devoted over a thousand pages to creating The Theory of Capital and Interest. About a century later, Don Patinkin invested over 700 pages in seeking to integrate a theory of Money, Interest, and Prices. And numerous other economists contributed their thoughts without any sense of conceptual coherence coming into existence. Now, the authors have shown how the elemental concept of waiting can, when deftly employed by theorists, provide coherence to cover nearly all past tergiversations over capital theory. To be sure, Yeager died in April 2018 his manuscript considerably unfinished, I can testify from a conversation with Yeager a few years before his death. Steve Hanke assembled the final manuscript, for which he deserves applause from all economists with interest in capital theory because the Yeager-Hanke volume is a graceful and compelling read." (Richard E. Wagner, Holbert Harris Professor of Economics, Emeritus, George Mason University and author of "Macroeconomics as Systems Theory")