The Pure Time-Preference Theory of Interest

Jeffrey M. Herbener

It’s about time. Really! An entire book fleshing out the pure time-preference theory of interest has finally been assembled. The present crop of Keynesians play with interest rates believing they can create prosperity without a sound theoretical basis for how the market determines rates. It is the Austrian insight that present goods have a higher value than future goods, while the followers of Lord Keynes foolishly try to abolish human action.

Giants of the Austrian world have been assembled for the task, along with a fresh new introduction by Jeffrey Herbener. Rothbard, Mises, Garrison, Kirzner and Fetter systematically provide the underpinnings of a theory that, as Israel Kirzner writes, “for almost a century a particular theory of interest has been again and again discussed, refuted, defended, ignored, forgotten, and rediscovered; somehow it has managed to survive.”

Find out why!

From Douglas French’s foreword:

The following essays parse through the uniquely Austrian insight of the pure time-preference theory of interest, but more importantly go to the core of why modern central bank monetary engineering leaves the economy further from recovery while at the same time providing a Petri dish for speculation and malinvestment.
The Pure Time-Preference Theory of Interest by Jeffrey Herbener
Meet the Author
Jeffrey M. Herbener
Jeffrey M. Herbener

Jeffrey Herbener teaches economics at Grove City College and is chairman of the economics department. He is assistant editor of the Quarterly Journal of Austrian Economics..

Mises Daily Jeffrey M. Herbener
State interference in education usurps the child's rights and displaces the custodial role of the parents in exercising those rights, writes Jeffrey Herbener. That the state would seize the custodial rights from the parents demonstrates that it has its own interests in mind. The state must resort to force because neither the child nor the parents want the natural arrangement to be overturned. Because the state rests on compulsion its activity extinguishes the very basis for the development of the personalities of children, which is freedom. Moreover, state officials lack the knowledge of and concern for the child possessed by his parents. The state has no interest in developing the personalities of children or in catering to their interests and aptitudes. The state does not desire them to participate in the social order by their free associations. The state funds and regulates formal education to further its own interests and attain its own ends.
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References

2011, Mises Institute