Friedrich Benedikt Wilhelm Hermann on capital and profits

Abstract

The paper recalls some of the achievements of Friedrich Benedikt Wilhelm Hermann, a remarkable German economist whose work, once praised by authors such as von Thunen, Menger, Marshall and Schumpeter, has largely fallen into oblivion. The emphasis is on Hermann's contributions to the theory of capital, profits and relative prices. It is argued that Hermann's writing reflect a period of upheaval, both theoretically and socio-economically - a period of transition from classical to marginalist economics and one in which the 'social question' became ever more pressing. On the one hand Hermann contributed to the development of the classical theory of value and distribution, and on the other he prepared the ground for the replacement of that theory by marginal productivity theory.