INTEREST THEORIES, OLD AND NEW
Abstract theory, always of fundamental importance, has, as
truly as practical policy, its “topics of the day,” and Just now
discussion of the interest problem is especially active. Notable
among recent articles are those by Professors H. R. Scager, Irving
Fisher, and H. G. Brown.* Mere individual differences of opinion
concern us little; but certain impersonal equities which other students
 of economics have in the interest problem, are involved; for
in recent discussion is fairly presented the issue between the old
and the new conception of the interest problem.” And yet the case
for the newer view might seem to be on the point of being lost
before the bar of economic opinion. It is a duty, therefore, to
attempt a more adequate statement of the neglected truths.
The rival views may be characterized as the technological* and
the psychological interest theories. For more than decade, the
psychological theory has been gaming adherents in America.
There has not been lacking adverse critieism in scattered book
reviews and in occasional footnotes ; but in the main, the opposition
has been of a merely negative sort, in that most economists have
failed to reckon with it and have adhered to the older thcory.

7. Professor Irving Fisher as a productivity theorist.
Seager’s paper, just cited, is the first systematic attempt that
has been made to disprove any version of the newer theory (for
Fisher’s “impatience theory,” which Seager attacks, has been generally
 supposed to be a psychological theory). "The discussion
started by Seager necessarily follows in large part the lines determined
 by Fisher’s treatment. Let us first, therefore, try to get
our bearings as to that. My own position on the general question

1 American Ecoxomic REvızw, Dec, 1912, H. R. Seager, (eritique of) “The
Impatience Theory of Interest”; Sept., 1913, Irving Fisher (reply), and H, R.
Seager (comment) “The Impatience Theory of Interest.”
Quarterly Journal of Economics, Aug., 1913, Harry G. Brown, “The Marginal
 Productivity versus The Impatience Theory of Interest.”
*To prevent misunderstanding, let us say that Böhm-Bawerk is here classed
among those holding to the old theory, for his “roundabout process” explanation
 is technological, though united with strong Psychological features in the
explanation of consumption loans.
*'This somewhat unusual word is here employed in the sense of physically
productive, a technological interest theory being one which finds the explanation
 of the rate of interest in the actual, practical performances, or uses, of
agents in producing other goods.