IV. Scarcity of Debt and section 2. Capital and Capitals In this section, Commons starts with a discussion of Anne Robert Jacques Turgot. Turgot was the foremost of the physiocratic economics in France in the 18th century. Importantly, Turgot unraveled the issue of what was “interest”. It was not the “price of money” but rather it was “the price given for the use of a certain quantity of value for a certain time,” (Commons, 1934, pg. 487). Commons then turns to the idea that capital yield is a key concept. The yield is how income in money terms is produced by any asset. The Price paid for that assert is a numerical ratio over and above the regular monetary income produced by the capital asset. This price will vary according to demand and supply. It is important to note here that it is unclear whether Commons believes this statement or is ascribing this view to others. Turgot then moved forward with some important conceptions that predate Macleod. He talke...
This blog has been setup to explore the ideas and philosophy of the American institutional economist John R. Commons.