Albert Einstein and Compound Interest

Einstein said the most powerful force in the universe is compound interest.

Benarkah einstein pernah mengatakan itu? kenapa pernyataan yang sebenarnya diluar ilmu yang menjadi konsentrasinya itu begitu populer? lets find out.

Copas dari milis iesp fe unpad. Dari

I’m starting this thread and asking for investigative help from fellow Kossacks because I’m sick of hearing various versions of a supposed quote from Albert Einstein about the miraculous power of compound interest.

This irrelevant and very possibly apocraphyl appeal to Einstein’s authority as a physicist and all-around genius has become a basic talking point in the conservative drive to privatize Social Security.
John Snow has been giving speeches like this one in which he says “Albert Einstein believed, and the President and I agree, that compound interest is one of the most powerful forces in the universe.”

Dick Army, in a piece called “Why Liberals Hate the Ownership Society Agenda” here
which says “Large [private retirement accounts] are the best way to let all Americans build wealth because they maximize the impact ofcompound interest-what Einstein called the most powerful force in the universe.”

But a simple Google search shows that there are many versions of this quote floating around the internet and they don’t at all—even on their surface—say the same thing. And even if they did, without the original context, we have no idea what Einstein might have meant by it. It could very well have just been a joke, or a sarcastic remark about greed.

Anyway, I’ve already found the variations that I’ll post below and I’d like help in sorting through all this and developing a definitive strategy for combatting this pernicious talking point. Here are my initial thoughts:

1. No one, as far as I can see, can pin down the quote to any legitimate reference source.
2. There are many variations which don’t at all mean the same thing. Further, there appears to be a process of inflation that takes the quote from “the most fascinating mathematical concept” to “the human race’s greatest invention” to “the ninth wonder of the world” to “the most powerful force in the universe.” The differences here are exponential!
3. Even if Einstein could be pinned down to saying the last version, there’s no way to know how he meant it (ironically, jokingly, sarcastically, etc.) without the original context.
4. Even if he said it and meant it seriously, the appeal to him as an authority figure is spurious. He’s a physicist, not an economist. His legendary “great brain” does not give him the power to transfer his authority in one field to another unrelated one.
5. Most troubling is that the myth of Einstein as the iconic figure of god-like intelligence is being used to conflate economics with metaphysics. Snow, Army and others are using this meme to imply that compound interest is some kind of sublime, magical, transcendental force, capable of annulling the most basic kitchen-table conceptions of economics. The appeal is essentially to the “mystery” that is relativity theory. Here the resonance of that “mystery” is being transferred to the magical power of compound interest,which can supposedly make everyone rich without anyone paying the price.
6. Does compound interest even relate to the privatization plan Bush is pushing?

P.S. Can someone who understands the economics explain to me how compound interest can be viewed as some sort of benign force in the universe? It’s a social construct—your money only “grows” in value if the rest of the economy recognizes and enforces the investment and its terms—right? And why can’t the same principle be used to put people into ever-greater debt—-as with people holding credit card debt or the victims of the sharecropping system? Am I being economically naive? Am I missing something here?

Here are the quotes I’ve found and the URL’s:

Einstein is widely rumored to have once said that the most powerful force in the universe is compound interest. While this rumor lacks any verifiable basis, he is documented to have said something almost as compelling: that compound interest is the greatest mathematical discovery of all time. (

Albert Einstein is credited with discovering the compound interest rule of 72. Referring to compound interest, Albert Einstein is quoted as saying: “It is the greatest mathematical discovery of all time” (

Depending on the source, Albert Einstein referred to compound interest as the eighth wonder of the world, the human race’s greatest invention, or the most powerful force of the universe. (

John Snow: Albert Einstein believed, and the President and I agree, that compound interest is one of the most powerful forces in the universe. (

Dick Army “Why Liberals Hate the Ownership Society Agenda” — Social Security program is the opposite of ownership: workers send their payroll taxes to an imaginary trust fund, and Congress spends those resources. Instead, we want to create large Personal Retirement Accounts (PRAs) which individual workers own and control. Large PRAs are the best way to let all Americans build wealth because they maximize the impact ofcompound interest-what Einstein called the most powerful force in the universe. (

Albert Einstein supposedly said that compound interest was the greatest wonder of the universe, or words to that effect. No one seems to know exactly when he said this, or to whom, so maybe the story is apocryphal (today’s vocabulary word). On the other hand, if he didn’t say it, he should have. (

It is reported that Albert Einstein called compound interest the ninth wonder of the world (

Many years ago, someone asked Albert Einstein what he thought was the human race’s greatest invention. His reply?

“Compound interest.” (

Einstein was asked what he considered to be the most fascinating mathematical concept. Without hesitation, he replied, “compound interest.” A man known for his wit, the reporter laughed out but when he looked at Einstein’s serious face, he relented. (


Many homeowners who have struggled to meet their mortgages month after
month, only to find after years of making payments that most of their money has gone to cover interest charges, have felt like cursing whoever came up with the concept ofcompound interest. In that vein, around 1980 (when the neutron bomb and soaring interest rates were prominent news topics) Johnny Carson once quipped during a Tonight Showmonologue that “Scientists have developed a powerful new weapon that destroys people but leaves buildings standing — it’s called the17% interest rate.” Perhaps that explains why many of us seem to recognize a kindred spirit in the declaration by one of the greatest intellects of our time, Albert Einstein, that compound interest is “the most powerful force in the universe” or “the greatest invention in human history.” (Since no context is ever offered for this purported quote, readers might also fairly assume that its intent was to praise compound interest as a wonderful device that allows thrifty savers to realize a significant, low-risk return on their money.)

But did the eminent physicist really ever say such a thing? The claim that he did appears dubious for a couple of significant reasons:

* The attribution of this sentiment about compound interest to Einstein doesn’t seem to have existed during the scientist’s lifetime, first appearing in print only several decades after his death, and always repeated as something he supposedly said in some indefinite time and place. (Albert Einstein died in 1955, but the earliest mention we could find of this item was in a 1983 New York Times blurb.)
* Just what Einstein reportedly said about compound interest varies quite a bit from source to source: That it was “the greatest invention in human history” (or “the greatest invention of mankind,” or “the greatest invention of all,” or “the most significant invention of the nineteenth century”), that it is “the most powerful force in the universe,” or that it is “more complicated than the theory of relativity.” (That last variation echoes another sentiment popularly attributed to Einstein which also began to appear only well after his death, to the effect that “preparing a tax return is more complicated than relativity theory” or “the hardest thing in the world to understand is the income tax.”)

We suspect that this perspective on the power of compound interest is a fairly modern invention, one which has been retroactively placed into the mouth of a prominent dead person to give it more punch.

Me : Apapun yang dikatakan dan tidak dikatakan Einstein, Compound interest seharusnya dilenyapkan dari muka bumi!

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