Stripped of all its technical jargon and long-windedness, this, in brief, is Bohm-Bawerk's complete solution of the problem of Interest. And what we have chiefly to remark about it in its general aspect is, that it is after all only a solution from the point of view of the lender; but as 'it takes two to make a bargain,' we still have to ask, - how about the borrower? If he had obtained the money purely for personal expenditure and enjoyment, and so cannot pay at all, then the loan falls under the category of an error of judgment - and so forms the subject-matter of Psychology, but not of Political Economy. On the other hand, if it has been borrowed to invest in some legitimate industrial undertaking, - in the purchase of land or machinery, or processes of manufacture, or means of transport, or productive business services generally of whatever kind, whether in new undertakings or in the extension of old ones, (and it is these and their collaterals that are the only kind of loans with which Political Economy has to do); - how then does the matter stand? Now, if the industrial undertaking for which the loan is wanted, is a new and untried one, the borrower will have to pay a higher rate of interest than if it were an old and established one, as his banker will not be slow to remind him; thus proving that the rate varies not merely with the feelings of the lender in parting with the loan, but with something in the financial circumstances of the borrower as well.

And as it is on the strength of the confidence, both of the lender and borrower, in the industrial enterprise yielding the necessary surplus to repay the loan and its interest, that the agreement has been made, it is a proof, I submit, that the Interest comes out of the 'productive powers of the machine, the mine, or the processes concerned, and neither out of the mere lapse of Time, nor yet out of the disagreeableness which the waiting involves. And that there is a surplus fund in the economic powers of Nature embodied in the machines, processes, means of transport, etc., which is conferred as a free gift on their possessors after all expenses have been paid, the whole of this volume has been one long demonstration. If the enterprise should fail, it is because the expenses exceed the surplus gift - and so it has been a miscalculation and foredoomed failure from the start, and has no further economic significance. Now, in thus labouring what to most business men must seem so palpable a truism, 1 must apologise to my readers, to whom this long rigmarole about nothing, as they must regard it, cannot have been a greater boredom to read than for me to write.

And indeed it is probable that in the world of men, no one could be found to countenance the waste of time spent on it, unless indeed it were some academical political economist, sitting in the decadence of his unreal and exploded specialism, spinning cobwebs of economic perpetual-motion out of principles which, as we have seen, have had from the beginning no dynamical or motor-power whatever. But Bohm-Bawerk is not to be so lightly gainsaid without a desperate effort to defend himself and his theory. And accordingly, of the scores of writers whose views on Interest he passes under review, what thinks the reader is his one reply to all those who contend that the interest must come out of the increased production of the machines? It is this: - Admitting the increased productivity that comes from the co-operation of capital with labour, - not because the machines add a surplus as a free gift, like the land, but because they make, as he says, 'the adoption of new and profitable methods possible' - how do you know, he asks, that the products will not have been so cheapened by this very excess of productivity, that by the time the loan is due they may not repay the outlay? How, in a word, do you know that the product, say, of a new and improved loom may not have so cheapened the cloth, that the profits will not repay the cost of the machine? How, indeed? we reply, if you choose to put the matter in that way, any more than you can get the interest on the money borrowed to pay for the machine, if before the time of repayment a still newer patent has so undercut the price of the product, that the machine itself has had to be 'scrapped' for old iron.

As well say that there was no fund for the repayment of interest in opening up a diamond mine, because diamonds might go out of fashion before the diamond deposits were reached, and so might be worth no more than their paste imitations. It is not all machines or processes that can yield a sufficient surplus of economic powers of Nature to pay the expenses involved in liberating them; and when they do not, neither workers nor money-lenders can be sure of getting either their wages or their interest out of them; but if the money-lenders do get their interest, it is out of these free gifts of Nature that it comes, not out of the disagreeableness of waiting for the return of the money lent, on the part of the lender; nor does it depend for its rate, on the length of Time alone. And hence this reiterated question thrown by Bohm-Bawerk in his extremity as a Parthian shot at his opponents when he is closely pursued, is as absurd as the appeal of Jevons to the price of old coins, old pictures, etc., when trying to prove that Value does not depend on Labour-cost, but only on ' final utility.'