It Is for His Service in Paying Factors Now That the Capitalist Earns an Interest Return, a Return for Time Preference

If we assume, for example, that there are no business loans but only stock investment, this point is easier to understand. When a man saves and invests in a productive process, he pays workers and other factors now in exchange for services that will yield a product, and therefore an income, at some future time. In short, the capitalist-entrepreneur hires or invests in factors now and pays out money (a present good) in exchange for productive services that are future goods. It is for his service in paying factors now, in advance of the fruits of production, that the capitalist normally earns an interest return, a return for time preference. In sum, every factor of production (whether labor, land, or capital goods) earns, not its marginal value productivity, according to the current conventional explanation, but its marginal productivity discounted by the interest rate or time preference; and the capitalist earns the discount.

--Murray N. Rothbard, introduction to Capital, Interest, and Rent: Essays in the Theory of Distribution, by Frank Fetter (Kansas City: Sheed Andrews and McMeel, 1977), 11-12.