Murray Rothbard Thinks Abstinence Theories Are Close to Pure Time-Preference Theories of Interest and He Develops His Bargaining Theory of Interest Formation

Rothbard in his framework adhered to what he called pure time-preference theory. Despite this classification of his own, we may see some important differences between him and his Austrian forerunners. First, in his history-of-thought textbook, he does not agree with Böhm-Bawerk’s arguments against all abstinence theories. He actually says abstinence theories are quite close to pure time-preference theories since their main focus is the passage of time. Time preference accounts for the disutility of waiting. One can therefore state that Rothbard saw himself as a presenter of the broader tradition of analyzing interest. . . .

Rothbard starts to develop his bargaining theory of interest formation in the market, and in this lies his great contribution to interest theory: treating interest like any other price formed purely by actors in the market.

--Mateusz Machaj, Money, Interest, and the Structure of Production: Resolving Some Puzzles in the Theory of Capital, Capitalist Thought: Studies in Philosophy, Politics, and Economics (Lanham, MD: Lexington Books, 2017), 28.