Formally he was quite right, inasmuch as the capitalist is the owner of the machine, and therefore of its gratuitous productive powers; but if anyone has a right to complain, it is the inventor of the machine, who, if the question is one of 'exploiting,' has been exploited both by the capitalist and by the labourer. But to imagine, as Marx does, that it is out of the miscellaneous mass of navvies, coal-heavers, and ordinary humdrum working men of every class, who neither invent nor originate anything, (and who, but for the machines, would 'eat their heads off',) that the surplus value inherent in the machine is exploited, is frankly as if he were to identify the work of a locomotive with the work of the engine driver and fireman, and of the miner who supplies it with coal. It does not follow that because the inventors have been robbed of the surplus which is as direct a product of their ideas as ever a landlord's rent was the surplus product of his soil, that therefore we are to shut our eyes to whence the surplus out of which Interest is paid so palpably comes, and to allow either interested politicians on the one hand, or political economists professing not to see, on the other, to lead us around on their artificial elaborate search; while one section of them stands over the working men, and pointing to them exclaims; - 'Here are the men who make the surplus which the capitalists exploit,' and another set stands over the money capitalists and cries 'Behold the makers of the wealth of the world!'

But if the surplus comes neither out of the money capitalists nor out of the great masses of ordinary working-men, neither does it come, as Walker contends, out of the organizers of labour, the entrepreneurs, whether capitalists or not: for their work consists mainly in bringing the machines together under one roof, and planting their manufactories in such situations as shall give them at once the easiest access to natural powers, and the best facilities for transport; as well as in turning everywhere to account most cheaply and methodically, that principle of the 'division of labour' which, although it was reasonable in Adam Smith to believe was the cause of any 'surplus value' from manufactures, - inasmuch as in his time the great inventions which have made the wealth of the modern world had not yet appeared, - it was unpardonable in Mill, who living in the very midst of their triumphs, still harked back on the 'division of labour' made possible by them, as if it were their main function. It is true, of course, that the services rendered by the entrepreneurs of the world are most value-producing and important, but they are rather of a negative than a positive character, inasmuch as they depend for their efficiency on the powers of Nature embodied in the machinery and processes which these men have been permitted by law to appropriate after the short periods of their patents have expired, and without which, indeed, there would be nothing of value for them to organize.

No, it is out of the machines and the brains that have invented them, that the 'surplus value' out of which Interest and Profits are paid mainly arises, and not out of the work either of the capitalists or of the workmen as such; so that if the question of Interest is to be discussed on ethical grounds, the discussion must be based from the start on a series of exploitations, beginning with the capitalists who first exploit the labourers, and ending with both in turn exploiting the inventors and discoverers. And with this, by way of preliminary, we may now return to the views of Jevons and Bohm-Bawerk on the problem of Interest.

To begin, then, with Jevons; - it is evident that having ground down 'fixed' into 'circulating' capital, and both into the money wages of the labourers when employed in making any particular instrument of Production, - whether it be a machine, a railway, a manufactory, or what not, - and so eliminating the gratuitous economic powers of Nature from his problem, he has left himself no surplus anywhere on which he can draw for the payment of Interest; and the question now becomes where does he get it from? He expressly asserts that the increase of the product comes out of Capital and Abstinence; but as the capital, as he also asserts, comes out of abstinence, and not out of the machines, there is evidently no source from which interest can come, unless it be out of the labourers. And this, indeed, he indirectly admits when in discussing the rate of Interest and the reason why it tends to equality, he urges that it is because 'the workers all live on the same things,' and so furnish a common level fund from which by abstinence on their part, a common level rate of interest may be skimmed off; - and for this, at least, we may remark in passing, the Socialists of the school of Marx, usually so hostile to Jevons, should have thanked him.

Starting, then, from this, he goes on to observe that when once the particular industrial undertaking is finished, the rate of interest on the capital invested in it will 'vary inversely as the period of investment;' so that if you do not increase the number of your labourers, but go on adding successive increments of capital long enough, the capital will yield no interest at all; - all this being illustrated by a mathematical diagram in which you see the interest shrinking more and more, while the wages of the labourers increase more and more as the interest falls. And the question we have to ask is, what has he done, in order to get this result? The answer is, that he has been guilty of all the fundamental illusions, both in method and treatment, of the orthodox Economy which we have already passed under review, and some of which we have already emphasised in dealing with Mill. He has made Interest, like Capital, depend on abstinence; he has neglected the element of Consumption; he has separated the factors of a complex whole, and treated them as if they could each function independently; he has kept the element of Labour rigidly fixed. while allowing Time and Capital to be elastic and free, - instead of either keeping them all alike definite, or all alike free, - and so, like Mill, starts either with unnatural combinations which breed economic centaurs, monsters and chimeras, or with crippled premises in which half of the problem, namely Consumption, is left out.