Interest and the Marginal Product of Capital: Böhm-Bawerk versus Samuelson

It is quite common to associate the equilibrium rate of interest with the marginal product of capital. However, not all economists have endorsed this practice, and indeed many have challenged the explanation of interest according to marginal principles. In this paper I offer a resolution to this dispute by first agreeing with the critics of mainstream models, but then demonstrating that the "justification" of interest is quite straightforward, once we have remembered the (elementary) distinction between rents and interest. To underscore my belief that the historical controversy was ultimately due, not to marginal principles, but to more modern techniques that are valid only under special circumstances, I have framed the paper as a pseudo-debate between (nineteenth century theorist) Eugen von Böhm-Bawerk and Paul Samuelson.