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• Translator's Preface
• Introduction: the Problem of Interest
• Book I: The Development of the Problem
• Book I, Chapter I: The Opposition to Interest In Classical and Mediæval Times
• Book I, Chapter II: The Defence of Interest From the Sixteenth Till the Eighteenth Century
• Book I, Chapter III: Turgot's Fructification Theory
• Book I, Chapter IV: Adam Smith and the Development of the Problem
• Book I, Chapter V: The Colourless Theories
• Book II: The Productivity Theories
• Book Ii, Chapter I: The Productive Power of Capital
• Book Ii, Chapter II: The Naïve Productivity Theories
• Book Ii, Chapter III: The Indirect Productivity Theories
• Book III: The Use Theories
• Book Iii, Chapter I: The Use of Capital
• Book Iii, Chapter II: Historical Statement
• Book Iii, Chapter III: The Plan of Criticism
• Book Iii, Chapter IV: The Use of Capital According to the Say-hermann School
• Book Iii, Chapter V: The True Conception of the Use of Goods
• Book Iii, Chapter VI: Criticism of the Say-hermann Conceptions
• Book Iii, Chapter VII: The Independent Use: an Unproved Assumption
• Book Iii, Chapter VIII: The Independent Use: Its Untenable Conclusions
• Book Iii, Chapter IX: The Independent Use: Its Origin In Legal Fiction
• Book Iii, Chapter X: Menger's Conception of Use
• Book Iii, Chapter XI: Final Insufficiency of the Use Theory
• Book IV: The Abstinence Theory
• Book Iv, Chapter I: Senior's Statement of the Theory
• Book Iv, Chapter II: Criticism of Senior
• Book Iv, Chapter III: Bastiat's Statement
• Book V: The Labour Theories
• Book V, Chapter I: [the Labour Theories]
• The English Group
• The French Group
• The German Group
• Book VI: The Exploitation Theory
• Book Vi, Chapter I: Historical Survey
• Book Vi, Chapter II: Rodbertus
• Book Vi, Chapter III: Marx
• Book VII: Minor Systems
• Book Vii, Chapter I: The Eclectics
• Book Vii, Chapter II: The Later Fructification Theory
• Conclusion

Book VII, Chapter II

The Later Fructification Theory

I have pointed to the wide spread of eclecticism as a symptom of the unsatisfactory position of the economical doctrine of interest. Our economists select elements out of many theories, when and because no one of the existing theories is found sufficient.

A second symptom that points in the same direction is the fact that, in spite of the great number of existing theories, there is no check to the literature of the subject. Ever since scientific Socialism brought scepticism to bear on the old school of opinions there has been no lustrum, and in the latter lustrum no year, in which some new interest theory has not seen the light of day. So far as these have retained at least some principles of the older explanations, and have varied them only in the way of carrying out the original principles more strictly, I have tried to classify them according to the prevailing tendencies they show, and have included them in the statement of preceding chapters.

But some recent attempts strike out a way of their own,103 and one of them seems remarkable enough to call for fuller notice,—that of the American writer, Henry George. From its likeness in fundamental ideas to Turgot's Fructification theory, it may be appropriately called the Later Fructification theory.

George's104 interest theory occurs in the course of a polemic against Bastiat and his well-known illustration of the lending of the plane. A carpenter James has made a plane for his own use, but lends it for a year to another carpenter William. At the end of the year he is not content with getting back an equally good plane, because this would not compensate him for the loss of the advantage he might have had from the use of the plane during the year, and on that account he asks in addition a new plank as interest. Bastiat had explained and justified the payment of the plank by showing that William obtains "the power which exists in the tool to increase the productiveness of labour."105 This explanation of interest from the productivity of capital George does not consider valid, for various reasons which do not concern us here, and then proceeds as follows: "And I am inclined to think that if all wealth consisted of such things as planes, and all production was such as that of carpenters—that is to say, if wealth consisted but of the inert matter of the universe, and production of working up this inert matter into different shapes—that interest would be but the robbery of industry, and could not long exist.... But all wealth is not of the nature of planes or planks, or money, nor is all production merely the turning into other things of the inert matter of the universe. It is true that if I put away money it will not increase. But suppose instead I put away wine. At the end of a year I will have an increased value, for the wine will have improved in quality. Or suppose that in a country adapted to them I set out bees; at the end of a year I will have more swarms of bees, and the honey which they have made. Or supposing, where there is a range, I turn out sheep, or hogs, or cattle; at the end of the year I will, upon the average, also have an increase. Now what gives the increase in these cases is something which, though it generally requires labour to utilise it, is yet distinct and separable from labour—the active power of nature; the principle of growth, of reproduction, which everywhere characterises all the forms of that mysterious thing or condition which we call life. And it seems to me that it is this that is the cause of interest, or the increase of capital over and above that due to labour."

The fact that, for the utilisation of the productive forces of nature, labour also is necessary, and that, consequently, the produce of agriculture, for instance, is in a certain sense a produce of labour, is not sufficient to obliterate the essential difference that exists, according to George, between the different modes of production. In such modes of production as consist "merely of changing the form or place of matter, as planing boards or mining coal, labour alone is the efficient cause.... When labour stops production stops. When the carpenter drops his plane as the sun sets, the increase of value which he with his plane is producing ceases until he begins his labour again the following morning. When the factory bell rings for closing, when the mine is shut down, production ends until work is resumed. The intervening time, so far as regards production, might as well be blotted out. The lapse of days, the change of seasons, is no element in the production that depends solely on the amount of labour expended." But in the other modes of production "which avail themselves of the reproductive forces of nature time is an element. The seed in the ground germinates and grows while the farmer sleeps or ploughs the fields."106

So far George has shown how certain naturally fruitful kinds of capital bear interest. But, as every one knows, all kinds of capital, even those that are naturally unfruitful, produce interest. George explains this simply from the efficiency of the law of equalisation of profits. "No one would keep capital in one form when it could be changed into a more advantageous form.... And so in any circle of exchange the power of increase which the reproductive or vital force of nature gives to some species of capital must average with all; and he who lends or uses in exchange money or planes or bricks or clothing, is not deprived of the power to obtain an increase any more than if he had lent, or put to a reproductive use, so much capital in a form capable of increase."

To return to Bastiat's illustration: the reason why William at the end of the year should return to James more than an equally good plane, does not rest in the increased power "which the tool gives to labour," for "that is not an element... but it springs from the element of time—the difference of a year between the lending and return of the plane. Now if the view is confined to the illustration, there is nothing to suggest how this element should operate, for a plane at the end of the year has no greater value than at the beginning. But if we substitute for the plane a calf, it is clearly to be seen that to put James in as good a position as if he had not lent, William at the end of the year must return not a calf, but a cow. Or if we suppose that the ten days' labour had been devoted to planting corn, it is evident that James would not have been fully recompensed if at the end of the year he had received simply so much planted corn, for during the year the planted corn would have germinated and grown and multiplied; so, if the plane had been devoted to exchange, it might during the year have been turned over several times, each increase yielding an increase to James.... In the last analysis the advantage which is given by the lapse of time springs from the generative force of nature and the varying powers of nature and of man."

The resemblance of all this to Turgot's Fructification theory is obvious. Both start with the idea that in certain kinds of goods there resides, as a natural endowment, the ability to bring forth an increment of value; and both demonstrate that, under the influence of exchange transactions and the efforts of economic men to get possession of this most remunerative fructification, the endowment must artificially become the general property of all kinds of goods. They differ only in that Turgot places the source of the increment of value quite outside of capital, in rent-bearing land, while George seeks it inside the sphere of capital, in certain naturally fruitful kinds of goods.

This difference avoids the weightiest objection that we had to urge against Turgot. Turgot had left unexplained how it is possible to purchase, for a relatively small sum of capital, land which yields successively an infinite sum of rent, and to secure the advantage of an enduring fructification for unfruitful capital. With George, on the other hand, it seems to need no proof that unfruitful wealth is exchanged in equal ratio with fruitful. For since the latter can be produced in any quantity at will, the possibility of increasing the supply of such goods will not permit of their enjoying a higher level of price than the unfruitful goods that cost as much to produce.

On the other hand, George's theory is open to two other criticisms, which are, I think, decisive.

First, the separation of production into two groups, in one of which the vital forces of nature form a distinct element in addition to labour, while in the other they do not, is entirely untenable. George here repeats in a somewhat altered form the odd mistake of the physiocrats, who would not allow that nature co-operates in the work of production except in one single branch of it, agriculture. The natural sciences have long ago told us that the co-operation of nature is universal. All our production rests on the fact that, by the application of natural forces, we put imperishable matter into useful forms. Whether the natural power of which we avail ourselves in this be vegetative or inorganic, mechanical or chemical, makes no difference whatever in the relation in which natural power stands to our labour. It is quite unscientific to say that, in production by means of a plane, "labour alone is the efficient cause." The muscular movement of the man who planes would be of very little use if the natural powers and properties of the steel edge of the plane did not come to his assistance. Is it even true that, on account of the character of plank planing as a "simple change of form or place of the material," nature in this case can do nothing without labour? Can we not fasten the plane into an automatic machine, and get it driven by the force of a stream; and will not the plane, untiring, continue the production even when the carpenter sleeps? What more does nature do in the growing of grain?

Second, George has not explained that prior phenomenon of interest by which he seeks to explain all the other phenomena. He says all kinds of goods must bear interest because they can be exchanged for seed-corn, cattle, or wine, and these bear an interest. But why do these bear an interest?

Many a reader will perhaps think, at the first glance, as George himself evidently thinks, that it is self-evident. It is evident that the ten grains of wheat, into which the one grain has multiplied itself, are worth more than the one grain of wheat that was sown; that the grown-up cow is worth more than the calf out of which it grew. Only it would be well to consider that it is not a matter of ten grains simply growing out of one grain. The action of cultivated land, and a certain expenditure of labour, have had a share in it. And that ten grains are worth more than one grain + the action of the ground and + the labour expended, is obviously not self-evident. Just as little is it simply self-evident that the cow is worth more than the calf + the fodder which it has consumed during its growth + the labour which its rearing demanded. And yet it is only under these conditions that interest can fall to the share of the grain of wheat, or to the calf.

Indeed, even in the case of wine which improves in lying, it is not by any means self-evident that the wine which has grown better is of more value than the inferior and unripe wine. For in our method of valuing the goods which we possess we follow unhesitatingly the principle of anticipating future use.107 We do not estimate the value of our goods according to the use—at least we do not value them only according to the use—which they bring us at the moment, but also according to that use which they will bring us in the future. We ascribe to the field, which for the moment lies useless in fallow, a value with regard to the crop which it will bring us by and by. We give a value even now to the scattered bricks, beams, nails, clamps, etc., which bring us no use when in that condition, in consideration of the use they will afford us when put together at some future time in the shape of a house. We value the fermenting must, which, as such, we cannot make any use of, because we know that by and by it will be serviceable wine. And so might we also value the unripe wine, which we know will become excellent wine after lying, by the amount of use which it will give us as matured wine. But if we ascribe to it here and now a value corresponding to that future use, there remains no room for an increase of value, and for interest. And why should we not?

And if we do not ascribe such a value, or not quite such a value, the cause is certainly not to be found, as George imagines, in the productive powers of nature which the wine possesses. For that there are vital forces of nature in the fermenting must, which in itself is even hurtful, or in the unripe wine, which of itself is of little use; and that these vital forces tend to the furnishing of a costly product, can, in the nature of things, only afford a ground for valuing the goods which contain these precious forces at a high figure, not at a low one. If, nevertheless, we value them at a relatively low figure, we do it not because of their containing useful natural forces, but in spite of it. The surplus value of the products of nature, which George appeals to, is therefore not self-evident.

George makes one attempt to explain this surplus value, though it must be called a very lame one. He says that time, as well as labour, constitutes an independent element in its production. But is this really an explanation, or is it an evasion of the explanation? How comes the person who throws a seed of corn into the earth to get compensation, out of the value of the product, not only for his labour but also for the time that the seed has lain in the ground and grown? Is time then the object of a monopoly? Such an argument almost tempts one to recall the naïve words of the old canonist, that time is a good common to all, to the debtor as to the creditor, to the producer as to the consumer.

Of course George did not mean time, but the vegetative powers of nature actually working during time. But how should the producer manage to get himself paid for these vegetative forces of nature by a special surplus value in the product? Are, then, these natural powers objects of a monopoly? Are they not rather accessible to every man who owns a seed of corn? And cannot every one put himself in possession of a seed of corn? Since the production of seed-corn can be indefinitely augmented by labour, would the amount of corn not be steadily increased so long as a monopoly of the natural forces immanent in the grain made its possession appear peculiarly advantageous? And would not, on that account, the supply inevitably increase till the extra profit due to that monopoly was absorbed, and the production of corn became no more remunerative than any other kind of production?

The careful reader will note that in this discussion we have come back into the same groove of ideas into which we were brought by our criticism of Strasburger's Productivity theory.108 In this part of his work George has under-estimated the interest problem in the same way as Strasburger did, only to a greater extent and with still greater naïvety. Both hastily conclude that the powers of nature are the cause of interest. But Strasburger at least made an attempt to investigate exactly the alleged causal connection between the two, and to follow it out in detail. George, on the contrary, gives us nothing but assertions which take for granted that, in certain productions, time is an "element." It is certainly not in this superficial way that the great problem is to be solved.

Conclusion

Our attention has been too long fixed on individual theories. Let us, in conclusion, consider the subject as a whole. We have seen the rise of a motley array of interest theories. We have considered them all carefully and tested them thoroughly. No one of them contains the whole truth. Are they on that account quite fruitless? Taken all together, do they form nothing but a chaos of contradiction and error, that leaves us no nearer the truth than when we started? Is it not rather the case that, through the tangle of contradictory theories, there runs a line of development which, if it has not itself led to the truth, has at least pointed the way in which truth is to be found? And how runs the line of this development?

I cannot better introduce the answer to this last question than by asking my readers once more to put clearly before their minds the substance of our problem. What really is the problem of interest?

The problem is to discover and state the causes which guide into the hands of the capitalists a portion of the stream of goods annually flowing out of the national production. There can be no question then that the interest problem is a problem of distribution.

But in what part of the stream is it that the current branches off into different arms? On this point the historical development of theory has brought to light three essentially distinct views, and these views have led to three as distinct fundamental conceptions of the whole problem.

Let us keep for a moment to the figure of the stream: it will serve very well to illustrate the subject. The source represents the production of goods; the mouth the ultimate division into incomes whereby human needs are satisfied; the course of the stream represents that stage between source and ultimate division where goods pass from hand to hand in economic transactions, and receive their value by human estimation.

Now the three views are the following. One view has it that the capitalist's share is already separated out from the first. Three distinct sources—nature, labour, and capital—each in virtue of its inherent productive power, bring forth a definite quantity of goods, with a definite quantity of value, and just the same amount of value as has flowed from each source is discharged into the income of those persons who own the source. It is not so much one stream as three streams, that flow together for a long time in the same bed. But their waters do not mingle, and at the mouth they divide again in the same proportion as when they came out of the separate sources. This view transfers the whole explanation to the source of wealth; it treats the problem of interest as a problem of production. It is the view of the Naïve Productivity theories.

The second view is directly opposed to the first. It finds the division first and exclusively in the discharge. There is only one source, labour. Out of it pours the whole stream of wealth, one and undivided. Even the course of the stream is undivided; in the value of goods there is nothing to prepare the way for a division of them among different participants, for all value is measured simply by labour. It is just at the mouth, just where the stream of wealth is about to pour out, and should pour out into the income of the workers who produce it, that, from each side, the owners of land and the owners of capital thrust out a dam into the stream, and forcibly divert a part of the current into their own property. This is the view of the socialist Exploitation theory. It denies interest any previous history in the earlier stages of the career of wealth. It sees in it simply the result of an inorganic, accidental, and violent taking. It treats the problem as purely one of distribution or division in the most offensive sense of the word.

The third view lies midway between the two. According to it there are two, perhaps even three springs in the source out of which flows the undivided stream of wealth. But in its course this stream comes under the influences that create value, and under these influences it immediately begins to branch asunder again. That is to say, in their calculation of use values (and of exchange values based on these) men put a value on the importance they attach to various goods and classes of goods, taking into consideration the amount and intensity of their needs on the one hand, and the quantity of means available to satisfy them on the other, and thus come to make division between goods and goods; they raise one kind and lower another. Thus emerge complicated differences of level, complicated tensions and attractions, under the influence of which the stream of goods is gradually forced asunder into three branches, of which each has its particular mouth. The one mouth discharges into the income of the owners of the land; the second into that of the workers; the third into that of the capitalists. But these three branches are neither identical with the two or three springs, nor do they even correspond with them in force. What decides the force of each branch at its mouth is not the strength of each spring at its source, but the amount which the formation of values has forced from the united stream into each of the three branches.

This then is the view in which all the remaining theories of interest agree. They find the final division already suggested in the stage of the formation of values, and therefore they consider it their duty to carry back their theory into this sphere. They supplement and widen out the distribution problem of interest into a problem of value.

Which of these three fundamental conceptions is the right one? To any moderate and candid observer the answer cannot remain doubtful.

It certainly is not the first view. Not only is capital not an original source of wealth,—since it is at all times the fruit of nature and labour,—but, as we have sufficiently proved, there is no power whatever in a factor of production to turn out its physical products with a definite value attached to them. In the production of goods neither value in general, nor surplus value in particular, nor interest on capital comes ready-made into the world. The problem of interest is not a simple problem of production.

But neither can the second conception be the correct one. The facts are against it. It is not for the first time in the distribution of goods, but before that, in the formation of value, that a foreign element intrudes itself by the side of labour. An oak tree a hundred years old, which during its long growth has only required the attention of a single day's labour, has a hundred times higher value than the chair which another day's labour has made out of a pair of boards. In this case the oak trunk, the product of one day's labour, does not at once become a hundred times more valuable than the chair which costs one day's labour. But day by day, year by year, the growing value of the oak diverges from the value of the chair. And as it is with the value of the oak, so is it with the value of all those products the production of which costs, not only labour, but time.

Now it is the same quiet and stubborn working forces as, step by step, separated the value of the oak from that of the chair, that have at the same time produced interest on capital. These forces, effective long before goods come to division, have marked out the future limiting line between wage of labour and interest on capital. For labour can be paid on no other principle than "like wages for like work." But if the value of goods produced by similar labour becomes dissimilar through the action of these forces, the similar level of wages cannot everywhere be maintained and coincide with the dissimilar rise in the value of goods. It is only the value of goods not thus favoured that falls in level, and is appropriated by the general rate of wages which it determines. All goods that are favoured rise above this level in proportion as they have been favoured by the formation of value, and could not be appropriated by the general rate of wages. When then the final division comes, after all the workers have received like wages for like work, these favoured goods must of themselves leave something over which the capitalist can and may appropriate. They leave this something over, not because at the last moment the capitalist, by his sudden snatch at the spoil, artificially forces down the level of wages under the level of the value of goods, but because, long previously, the tendencies of the formation of value had raised the value of those goods which cost labour and time above the value of those other goods which cost only labour producing its result at once;—the value of which latter labour, as it must be sufficient to satisfy the labour of its production, forms at the same time the standard for the general rate of wages.

So speak the facts. The conclusions which they force us to draw are clear. The problem of interest is a problem of distribution. But the distribution has a previous history, and must be explained by that previous history. The sums of wealth do not start away from each other on a sudden; the diverging lines which they follow were quietly and gradually cut out in previous stages of their career. Whoever wishes really to understand the distribution, and truly to explain it, must go back to the origin of the quiet but distinct grooving of these lines of division, and this will lead him to the sphere of value. This is where the principal work is to be done in the explanation of interest. Whoever treats the problem as a simple problem of production breaks off his explanation before he has come to the principal point. Whoever treats it as a problem of distribution, and distribution only, begins it after the principal point is passed. It is only the economist who undertakes to clear up those remarkable rises and falls of value, where the rises are surplus value, who can hope, in explaining them, to explain interest in a really scientific way. The interest problem in its last resort is a problem of value.

If we keep this in view we shall easily find the order of merit into which these various groups of theories fall, and we shall ascertain where runs the upward line of the development.

Two theories have entirely mistaken the character of the interest problem; together—the one forming the counterpart of the other—they constitute the lowest step in the development. These are the Naïve Productivity theory and the socialist Exploitation theory. It may seem strange to mention these two in the same breath. How widely the two diverge in the results at which they arrive! How much superior the adherents of the Exploitation theory consider their arguments to the naïve assumptions of the Productivity theorists! How proudly they proclaim their own advanced critical attitude! The association, however, is justified. First, the two theories agree in what they do not do. Neither of them touches on the distinctive problem. Neither of them wastes words in explaining those peculiar waves which are thrown up by the value of goods, and out of which surplus value comes. The Productivity theory contents itself with saying, in regard to these waves of value, that they have been produced. The Exploitation theory, almost more culpably, does not even notice them; for it they do not exist; for it, however the facts of the economical world may run contrary, the level of the value of goods agrees simply with the level of the labour expended on them.

But not only negations, but positive ideas bind these two theories more closely together than could well be believed. They are in truth fruit of one and the same bough; children of one and the same naïve assumption that value grows out of production like the blade out of the field.

This assumption has an important history of its own in economic literature. In constantly changing shapes it has, for a hundred and thirty years, ruled our science, and by forcing the explanation of the fundamental phenomenon in a wrong direction has hindered its progress. First it appears in the physiocrat doctrine that land creates all surplus of value by its own fruitfulness. Adam Smith took the strength away from the assumption. Ricardo entirely uprooted it. But, before the first phenomenal form of it had quite disappeared, Say introduced it for a second time into the science in a new and extended form. Instead of the one productive power of the physiocrats appear three productive powers, which produce values and surplus values exactly in the same way as formerly the physiocrats had produced the produit net. Under this form the assumption held the science under its ban for ten long decades. At length the spell was broken, for the most part through the passionate but praiseworthy criticism of the socialist theorists. But still its tough vitality asserted itself. Giving up the form, not the substance, it managed to save itself under a new disguise, and by a strange freak of fortune found its new home in the writings of those who had most bitterly opposed it, the Socialists. The value-creating powers were gone; the value-creating power of labour remained, and with it the old fatal weakness that, instead of the subtle syntheses of the formation of value which should be the work and the pride of our science to unravel, there was nothing left but a stout assumption, or, so far as an assumption would not pass, a still more stout denial.

Thus the naïve theory of the Productivity of capital and the emancipated theory of the socialists are twin systems. So far as the latter aspires to be a critical theory, well and good; it is really so; but it is also obviously a naïve doctrine. It criticises one naïve extreme only to fall into an opposite extreme that is no less naïve. It is nothing else than the long-delayed counterpart of the Naïve Productivity theory.

In comparison with it the remaining theories of interest may take credit to themselves for standing a step higher. They seek for the solution of the interest problem on the ground where the solution is really to be found, the ground of value. The respective merits of these theories, however, are different.

Those which seek to explain interest by the external machinery of the theory of costs have to carry a heavy handicap in the assumption that value grows out of production. Their explanation always leaves something over to explain. Just as certain as is the fact that the fundamental forces which set in motion all economical efforts of men are their interests, egoistic or altruistic, so certain is it that no explanation of the economical phenomena can be satisfactory where the threads of explanation do not reach back unbroken to these fundamental and undoubted forces. This is why the cost theories fail. In thinking that they find the principle of value,—of that guide and universal intermediate motive of human economical affairs,—not in a relation to human welfare, but in a dry fact of the external history of the manufacture of goods, in the technical conditions of their production, they follow the thread of explanation into a cul-de-sac, from which it is impossible to find a way to the psychological interest-motive to which every satisfactory explanation must go back. This condemnation applies to the majority of the interest theories we have been considering, however different the individual theories may have been.

Lastly, one step higher in rank stand those theories which have quite cut themselves adrift from the old superstition that the value of goods comes from their past instead of from their future. These theories know what they wish to explain, and in what direction the explanation is to be sought. If they have, notwithstanding, not discovered the entire truth, it is rather the result of accident; while their predecessors, cut off from the right way of its seeking by a wall of assumption, sought it in a wrong direction, and so sought it in vain. The higher step of the development is indicated in certain individual formulations of the Abstinence theory, but principally in the later Use theories; and here it is the theory of Menger which, to my mind, appears the highest point of the development up till now. And that not because his positive solution is the most complete, but because his statement of the problem is the most complete—two things, of which, as is often the case, the second may perhaps be more important and more difficult than the first.

On the foundation thus laid I shall try to find for the vexed problem a solution which invents nothing and assumes nothing, but simply and truly attempts to deduce the phenomena of the formation of interest from the simplest natural and psychological principles of our science.

I may just mention the element which seems to me to involve the whole truth. It is the influence of Time on human valuation of goods. To expand this proposition must be the task of the second and positive part of my work.

[103.]By desire of the author I here omit, as of little interest to English readers, a statement and criticism of Schellwien's theory (Die Arbeti und ihr Recht, Berlin, 1882, p. 195. etc.) which occupies pp. 477-486 of the German edition.—W. S.

[104.]Progress and Poverty. Kegan Paul, 1885.

[105.]Capital et Rente. See above, p. 289. [Book IV, Chapter III.—Econlib Ed.]

[106.]Parallel with the "vital forces of nature," according to George, works also "the utilisation of the variation in the forces of nature and of man by exchange." This too leads to "an increase which somewhat resembles that produced by the vital forces of nature" (p. 129). But I need not here enter into a more exact exposition of this somewhat obscure element, since George himself ascribes to it only a secondary rôle in the origination of interest.

[107.]See my remarks on "Competition of Wealth" in Rechte und Verhältnisse, p. 80, etc.

[108.]See above, p. 178. Book II, Chapter III, par. II.III.147-49.—Econlib Ed.]