The Knightians Deny Time Preference and Base Interest Return Solely on Productivity of Capital

Of current schools of economic thought, the most fashionable have been the econometric, the Keynesian, the institutionalist, and the neo-classic. “Neo-classic” refers to the pattern set by the major economists of the late nineteenth century. The dominant neoclassical strain at present is to be found in the system of Professor Frank Knight, of which the most characteristic feature is an attack on the whole concept of time preference. Denying time preference, and basing interest return solely on an alleged “productivity” of capital, the Knightians attack the doctrine of the discounted MVP and instead advocate a pure MVP theory. The clearest exposition of this approach is to be found in an article by a follower of Knight’s, Professor Earl Rolph.

--Murray N. Rothbard, "Professor Rolph on the Discounted Marginal Productivity Theory," in Economic Controversies (Auburn, AL: Ludwig von Mises Institute, 2011), 277.