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Source link: http://archive.mises.org/4394/fetter-the-radical/

Fetter the Radical

December 2, 2005 by

The hallmark of Frank A. Fetter’s approach to economic theory was his “radicalism,” writes Murray Rothbard. His most important contributions are still too radical to be accepted into the corpus of economic analysis. These are: his eradication of all productivity elements from the theory of interest and his eradication of everything pertaining to land in the theory of rent. [FULL ARTICLE]


jeffrey December 2, 2005 at 9:08 pm

A quick heads up for blog readers. There are now only 4 copies left of the Fetter book. We can’t get any more, so this is really the end of the Fetter era. So if you want to join in bringing on the fin de siecle: it is here.

Marco Saba December 3, 2005 at 9:04 am

we read:

“Thomas G. Bush of Alabama was a director of the Mobile and Birmingham

Warburg formed around him a subcircle of friends and acquaintances from the currency committee of the New York Merchants’ Association, headed by Irving T. Bush,…

The formal sessions of the
conference were organized around papers by Kemmerer, Laughlin, Johnson, Bush,
Warburg, and Conant,…”.

Do *anyone* know if those Bush are relatives of the actual ones?

jeffrey December 4, 2005 at 12:52 pm

Down to the last copy of Fetter. After it is gone, Fetter is out of print and unavailable from Mises.org. We have no plans to reprint unless something changes.

Jeffrey December 4, 2005 at 3:18 pm

Fetter is gone (sniff)

Paul Edwards December 5, 2005 at 1:51 am

This is the book that taught me never to ignore a book’s introduction ever again.

Rothbard came back to Fetter’s false equating of capital to land several times, and it took me a very long time to finally come to grips with why the distinction even mattered. Just what is so important about the distinction between capital and land when owners of both only seem to earn simply interest on them. What does it matter if land earns a net rent, and capital only a gross rent, when the land’s owner merely earns interest on the land, just as he earns only interest on the capital he buys.

But it is as Rothbard points out. The land does not require labor, or other land to maintain it. And so since you cannot consume land as you can consume capital, as time passes, the present value of the land rents very far off in the future that were discounted, due to time preference, into insignificance, become significant. And those future rents that were effectively not imputed in the capitalization of the land due to their distance in the future, eventually come to be imputed.

Capital can’t have this characteristic. These subtleties are very cool.

Jim Bradley December 5, 2005 at 10:02 am

Paul — i.e. Land also gains from the increased productivity of capital, and provided that capital will provide us with greater and greater production, the relative value of land compared to other goods and services will continue to rise “overall”. That will continue until we have another source of land.

Paul Edwards December 5, 2005 at 10:27 am

I think you’re right, Jim. Just as more capital increases the productivity of labor, it increases the productivity of land and so net rents to both increase. In contrast, capital just keeps on earning only interest.

It’s just another way of showing how, in the long run, the investments of the capitalist and the activities of the entrepreneur just keep on benefiting society far greater than they benefit themselves. What an ideal system, the free market.

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