Even the interest that has to be paid on the money required to finance industrial undertakings tends to inequality; inasmuch as it varies inversely with the security, whether you take individuals or nations. One man can borrow as much money as he requires at 3 or 4 per cent, another only at 5, another at 10, another only at 50, - as those who have had the misfortune to fall into the hands of moneylenders can testify. It is the same with nations, some of whom cannot borrow on any terms, unless indeed, as in pawnbroking, they assign some definite asset, as of customs duties or what not, to be held in pledge for the loan. But if money thus tends to inequality in the borrowing, it tends much more to inequality in the uses to which it is put in the spending. For the moment it begins to be used, whether in banking or in actual industrial operations, it ceases to function merely as money in general or in the abstract, (and this is the only sense in which Interest may be said to tend to the equality which has misled the orthodox economists), and becomes boxed off, as it were, in definite amounts in the hands of different individuals; and then it always tends to inequality.

The difference again between, say, £100 in the hands of one man, and a hundred separate pounds in the hands of a hundred different men, although the aggregate amount in the two cases is equal, is enormous. For the £100 concentrated can both outbid and outsell the hundred pounds dispersed. It can buy in the cheapest while they must buy in the dearest market, and can sell in the dearest while they may have to sell in the cheapest. It can take advantage of their necessities to ruin each of them in detail, for it can bide its time and stand under shelter until the storm and stress of immediate pecuniary necessity passes, while they must go out in the storm or perish. It in effect has rolled itself up into a concentrated ball, and so falls under the law of Combination, while they remain isolated pellets, and follow the law of Competition. Hence it can make itself king, while they are reduced to the position of suppliants. It has entered on the road which may lead to the fortunes of a Rothschild, while they linger or halt in the by-paths of poverty.

And yet each step, it is to be observed, has been taken under the orthodox economists' most sacred shibboleths, namely of 'freedom of contract' and laissez-faire. Where then is the tendency to equality?

But it is not only the tendency of undifferentiated or floating capital to an equality of Interest in the central money markets of the world, which has misled the economists into believing that the same is true of fixed capital, that is to say, of money capital when invested in machinery and buildings in definite places, in definite amounts, and with definite instruments of production (and which, as we have seen, varies according to the aggregate relative strengths of these instruments of production); they have been misled also by the apparent fact that all the shareholders alike, great or small, in joint-stock undertakings receive the same rate of interest, say 5 per cent., from their investments; forgetting that the original proprietors sitting at the head of the table, after having turned their property into a public company, still get their 20 per cent.. say, on the shares they have allotted to themselves, while the rest who sit 'below the salt.' only get their 5 per cent, after all. The nominal equality, in a word, turns out to be a real inequality, and profits instead of tending to equality, as at first appeared, tend really to inequality.

So far then we may sum up by saying that the orthodox economists in their belief that Profits tend to equality have been misled by keeping their eyes fixed on the dead product rather than on the living productive powers of industry; on what befalls goods, commodities, and interest, in central markets where unrestricted competition has full and undivided sway, rather than on the instruments of production and the living human beings who own them, and who far from making haste to offer them up to unrestricted competition, do all in their power to nurse them to the point where they can make whole or partial monopolies of them, that is to say, to the point where the effective power of Combination has free play. And it is precisely because when men have got a 'good thing' - whether from some natural or scarcity advantages, or from some effective combination of capitals which controls the instruments of production of the commodity in which they deal, - they intend to keep it to themselves, that, given time enough for their full evolution, the profits must end in inequality.

But the main reason, perhaps, why the orthodox economists have persistently upheld the doctrine of the tendency of Profits to an equality is, that it is a deduction from what we have already seen is the fundamental illusion on which the whole of the old economy is constructed, and from which all its leading propositions are derived, the illusion, namely, of representing the capital of a nation as a rigid rod of definite length, whereby if profits stand at the rate, say, of 25 per cent, at one end and at only 5 per cent at the other, an average can be struck at 15 per cent, in the centre of the rod; and the different capitals functioning in industry can then be represented as flowing backwards and forwards between the two ends, flooding the end of high profits and being withdrawn from the other, until the pressure of competition by reducing prices at the one end and raising them at the other, makes the profits of all alike settle down to a common level of equality.