Mises, Keynes, and Darwin: An Hypothesis on Interest Rates

25 Pages Posted: 16 Jun 2020

See all articles by Richard Stomper

Richard Stomper

Illinois FOP Labor Council; Swiss Management Centre University (Switzerland); Universidad Central de Nicaragua

Date Written: January 19, 2020

Abstract

One of the most overlooked and least analyzed elements of Mises’ economic theory is his concept of originary interest. This is distinct from the theory of the natural rate of interest proposed by Wicksell and developed by subsequent economists. The latter concept is determined endogenously by market processes and tends to manifest itself under hypothetical equilibrium conditions. For Mises, the concept of originary interest is exogenous to the economy. Neither does it result from government intervention. It determines economic conditions, rather than being determined by them. Its provenance is never completely clear from Mises’ work, although Mises seems to think that it has an innate quality. It is suggested in this paper that the basis of originary interest is in an evolutionary adaptation of the human species. There is a discussion as to why this might arise and the role originary interest might play in aiding evolutionary development. Comparison is then made between Mises’ concept of originary interest and Keynes’ theory of liquidity preference with which it shares many similarities. Finally, the theoretical structure presented is utilized to suggest approaches to the problem of consilience of economics and the social sciences in general with other disciplines.

Keywords: originary interest, liquidity preference, neutral rate of interest, evolution, consilience, Austrian economics, Mises, Keynes

JEL Classification: E43, E51, B25, E12, E14

Suggested Citation

Stomper, Richard, Mises, Keynes, and Darwin: An Hypothesis on Interest Rates (January 19, 2020). Available at SSRN: https://ssrn.com/abstract=3597681 or http://dx.doi.org/10.2139/ssrn.3597681

Richard Stomper (Contact Author)

Illinois FOP Labor Council ( email )

5600 South Wolf Road
Western Springs, IL 60558
United States

Swiss Management Centre University (Switzerland) ( email )

Balz Zimmermannstrasse 7
Transknowlogy Campus
Zug, CH-8302
Switzerland

Universidad Central de Nicaragua ( email )

De los semáforos del Zumen 3 Cuadras abajo
1 cuadra al lago, Pista Juan Pablo I
Managua, 12104
Nicaragua

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