Life
Bohm-Bawerk was born on 12 February 1851 in Brunn (Brno) in the Czech part of the Austrian-Hungarian Empire. His father was a high civil servant. Bohm-Bawerk studied law in Vienna and then entered the civil service.
He soon took leave to become an economist by studying in Heidelberg, Leipzig and Jena. In 1880 he obtained his Habilitation at the Faculty of Law in Vienna as a student of Carl Menger. His Habilitation thesis “Whether legal rights and relationships are economic goods” was published in 1881. In this he deals with the question of whether immaterial property like patent rights or goodwill positions in markets could be seen as part of net national wealth. In opposition to earlier writers such as Albert Schaffle and also to his own mentor Carl Menger, he gave a negative answer by emphasizing the similarity with loans which also could not be seen as part of net national wealth. The private value of such immaterial property rested on the fact that other people in the future will pay more for material goods than their cost of production. If these margins were considered to be paid above cost as a future burden of consumers, their capitalized value just cancels the capital value of the immaterial property.In 1880 Bohm-Bawerk was appointed professor of economics in Innsbruck. During his Innsbruck years he wrote his most important work on the theory of capital and interest, Kapital undKapitalzins. It was published in two volumes, the first in 1885, the second in 1889. In 1889 he went back to the Imperial Ministry of Finance. His job was first to design a reform of the Austrian income tax and then to head a commission studying the question of whether Austria-Hungary should return to the gold standard. He then was appointed Minister of Finance in a caretaker cabinet; after the resignation of the cabinet he became president of a high court of administrative law. For several years, depending on the actual politics in Vienna, he moved between the two positions. In 1904 he resigned as Minister of Finance in protest against large increases of military expenditure. Having declined the well-paid position of Governor of the Imperial Central Bank, he went back to academic life, this time as a professor at the University of Vienna. He was appointed a member of the Austrian upper house. Bohm-Bawerk died in 1914.
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