Sorry kids–Major Freedom in particular–but I think Keynes is brilliant in Chapter 13 of the General Theory:
It should be obvious that the rate of interest cannot be a return to saving or waiting as such. For if a man hoards his savings in cash, he earns no interest, though he saves just as much as before. On the contrary, the mere definition of the rate of interest tells us in so many words that the rate of interest is the reward for parting with liquidity for a specified period. For the rate of interest is, in itself, nothing more than the inverse proportion between a sum of money and what can be obtained for parting with control over the money in exchange for a debt for a stated period of time.
As I put it in my neglected dissertation, the rate of interest is an exchange rate between present and future dollars (or euros or ounces of gold or whatever the money commodity is). Austrians wouldn’t explain the exchange rate between the USD and the Japanese yen by reference to “proximity preference,” or the fact that consumers subjective prefer, other things equal, American goods to Japanese goods.
Obviously, I don’t endorse Keynes’ nutjob “socialization of investment” stuff in the final chapter, or any of his policy recommendations for that matter. But on his neutral, scientific assessment of what interest is, I actually agree with him more than Mises.
Believe me, it pains me to say that. I feel like this guy.