Page:The Economic Journal Volume 1.djvu/708

 686 THE tCONOMIC JOURNAL Now the more remote in time the last service ismthat is to say, the longer the series of services contained in a goodrathe smaller is the depreciation, and the nearer the net interest is to the gross return; and this gives us the fundamental law of that most durable good, land. Land, of course, contains a practically infinite series of annual services; in this case, then, the depreciation sinks to zero, and the gross return and the interest are one. The function of capital, then, is to give time: labour and natural powers do the rest. But this is not to depreciate capital. If it were not for this function labour would require to embody itself in products made from hand to mouth. As it is, labour can ally itself with natural forces that 'require time and give wealth. This is the service of capital--to bridge over the period between the inception and the end of a process which yields more abun- dant result the longer it is extended. What, then, is Interest ? It is the difference in price between a present and a future good. We saw that this difference was based on three good reasons. The rate of interest simply assesses puts into figures--this miversal under-valuation of future goods. We have thus to get rid of the idea that interest is paid to the owner of capital because his capital produces value, or because it is the price of an abstinence which is the basis of a production of value. And what, we may ask, is the bearing of this theory on the present-day problem ? If the function of capital is only to give time, while labour and natural powers embody themselves in far- away products, it seems to reduce the work of capital to very narrow limits. Is it not, then, the case that labour does every- thing, and that interest is only an areomit made by one class and taken by another ? This evidently admits of being put very plausibly. But the fallacy lies in looking at the human factor as the one which has the sole right, not only to everything that labour makes, but to everything that labour co-terate8 in making. In modern industry what nan does is to put forth mechanical and physical powers which his body shares along with other orgamsms, and to put forth the peculiarly human intellectual powers. Both of these are powerless without the material to work upon and work with: the matter and force of nature. Compared with these natural powers the share of man in production is suall, and it tends to become smaller. The work of production in the future is evidently the initiation by man's brain of natural processes put in a position to carry out human wishes. The economic claim o! the manual labouter becomes less, while that of the intellectual worker becomes greater. But along with this change in the rela