tional subsistence fund is low, as the number of laborers employed by the same is great, and as the surplus returns connected with any further extension of the production period continue high, and vice versa." 55

Impatience thus was selected by Boehm-Bawerk and by many later Marginists as the decisive element in the situation. The technical superiority of capitalistic methods was not overlooked, but in the endeavor to distinguish between things and values, and under the influence of psychological premises, the personal equation seemed the most attractive. In the words of an American writer: "In the general causation of distribution . . . the central rôle is played by the individual rate of preference for present over future income which . . . is the subjective prototype of the rate of interest. The study of the theory of interest therefore lays the foundation for a study of the theory of distribution";56 and the interest-rate itself is the "excess above unity of the rate of exchange between the values of future and present goods taken in relation to the time interval between the two sets of goods.' 9957

..

Two observations however may, by way of conclusion, be offered on this emphasis of the want-side of values. Namely, in the first place, the productivity-theory of interest could explain a supposed uniformity of rates while the agio-theory could not, or at any rate not so directly. For the productivity standard in general left this cleancut analysis of distribution: It premised the mobility respectively interconvertibility of labor and capital, and therefore fixed wages and interest at the margin. Neither laborer nor lender could get more than the contribution made by least effective uses, since any other unit of their kind of help was equally available with their own. Only

the landlord could keep the supra-marginal product permanently, though enterprisers might for a while, until competition had leveled their temporary differential profits to that of the average producer. Capital and labor hence left a consumer's surplus, except that part of capital's supra-marginal product would be absorbed by the enterpriser. Rent was a strain on consumer's surplus and profits also when rising far in excess of wagesof-management.58

In the second place, the agio-theory left open the question as to what determined preference-rates; and though this might be dismissed as something not within the scope of Marginal economics, as a matter of fact opinions differed. Impatience as an attitude of mind of sociological origins was plainly as much a factor for economic inquiry as many other topics embodied in economic treatises. So one is reminded here, as Table Four will serve to illustrate, of the very general disregard of the exact bounds set to economics by the logicians.59 We find that some subjects of interest to economics were debarred, while others equally irrelevant from a logical standpoint were admitted, not so much to complete a scientific survey, as to satisfy a vague notion that economics should become practical even when theory had nothing to say. Both Utilitarian and Marginal treatises thus contained much material not adaptable to the kind of schematization prescribed by methodology or premises. Current problems of interest to the thinking man everywhere were put under the rubric "Applied Economics," with the implication that the preceding analysis had

58 For a lucid statement of the productivity view of interest and of its bearing on Distribution see Taussig, F. W., Principles of Economics, 1911, vol. II, Book 5. Contrast this with Davenport's critique in his Economics of Enterprise, chs. 18-20.

50 Philippovich, E. von, in his Grundriss der Politischen Ökonomie, 9. edit., devotes to discussions of theory somewhat over 25 per cent. of his three-volume work.

TABLE FOUR

something definite to offer for their solution. Whether this was actually so or not, was not usually important, for on all sides the abstruse character of theory was felt to be a weakness. It was agreed that applications should be made, or perhaps that economics as a science could not take care of all things economic. In either case Marginists were bound to reach out beyond the limits of their Logic.

CHAPTER NINE

CONCLUSION

If we ask now, at the end of our historical sketch, what were the outstanding features in the growth of economics as a science, the answer will of course vary according to the selection of materials, and our personal bias. As stated at the beginning of this survey, historical interpretations cannot be taken to read the same way for all people, regardless of times. The genetic viewpoint is useful not because it gives truths immutable with respect to the data considered, even though they lie in the distant past, but because for the time and purpose necessarily guiding our valuations it serves to connect past and future, and more especially also to disclose lines of change or if we prefer, of development-that otherwise would probably have escaped our notice.

A definitive judgment therefore can never be passed upon things either now occurring or already of the past. But on the other hand distance does give perspective, and so provides a setting for particulars that must satisfy far more than the impression gained close at hand. In this respect history is like a picture which we wish to study. If we step up too close it loses meaning, and perhaps becomes a mere blotch of pigments. We see nothing of the painter's idea and art. The canvas will look like the palette itself on which mixtures and shades of color have been tried out in grotesque variegation. But if we move away a bit our impression is changed.