ABSTRACT
Interest in its primary meaning is the payment for the use of money; more broadly, it may mean the return on investment in any form. The historical development of interest theory, comprising the work of the classical school of economists, extends for more than a century after 1776, the date of publication of Adam Smith's Wealth of Nations. In recent years attention has been centred on Schumpeter's theoretical construction which regards interest as belonging essentially to a dynamic economy. The productivity theorists approach the problem of capital valuation from a different angle. Eclectic theories generally make use of the demand and supply scheme of analysis to combine the psychological and the productivity explanations of interest. Interest as a form of property income which does not involve its recipients in direct participation in active processes of business and production is bound up in a capitalist society with group antagonisms.
