Böhm-Bawerk, Eugen

Böhm-Bawerk, Eugen (oigān` böm`-bä`vĕrk), 1851–1914, Austrian economist. Three times minister of finance (1895, 1897, and 1900), he initiated important tax reforms and farsighted financial policies. Rejecting the standard theory of value, Böhm-Bawerk posited a theory of interest and of capital that was based on psychological factors and on the nature of production. His theories marked an early point of departure from classical economics. As an economist of the Austrian school, he emphasized the importance of marginal utility, which holds that price is primarily determined by demand and that demand is determined by utility. The theory is considered subjective because the definition of utility depends in part on a person's expectations. Among his works are Capital and Interest (2 parts, 1884–89; tr. 1890, repr. 1970) and Positive Theory of Capital (1889, tr. 1923).