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For Wicksell, capital was nothing but the ‘original production factors,’ labor and land, saved and embedded in it for a certain time interval, and the rate of interest was ‘the difference between the marginal productivity of saved-up labour and land and of current labour and land’ (Wicksell, 1934:154). Following Eugen von Böhm-Bawerk, he made a distinction between the ‘height’ and ‘width’ of capital. e. capital deepening. e. capital widening (Blaug, 1968:555–6). bookid=122977&filename=p... Page 38 …the position is different where, as may easily happen, some technical invention renders long-term investment, even without a simultaneous growth of capital, more profitable (absolutely) than previously.

Bookid=122977&filename=p... 3 No wonder: he had broken a taboo in late nineteenth-century Oscarian Sweden. ‘And taboo limits were something under which Knut Wicksell neither then nor later in his life could resist putting a little load of gunpowder’ (Nordqvist, 1985:60). , 1880:119–20). 4 Formally, the critics were right, because Wicksell’s only exposure to Malthus’ ideas at the time when he gave his two lectures and wrote his pamphlet was through Drysdale (Kock, 1944:84; Gårdlund, 1996:54), and he had not yet begun his studies in economics.

The differences in living standards in Europe were a result mainly of the ‘superabundance of population’ (Wicksell, 1891:238). bookid=122977&filename=p... Page 28 Ricardo had formulated the iron law of wages: the wage rate would not move above the level necessary for bare survival, as long as population growth was rapid. The only way to break away from this situation was by limiting the growth of the population. In Britain, trade unions had been able to push up the wage level by limiting entry to the labor market, but this would hardly be possible in the long run, should the population continue to grow.

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