1914] Interest Theories, Old and New 81

patience” (time-preference) into exact accord with that implied
in the market rate of interest. Seager did well to question the
statement, and Fisher’s concessions on this point do not leave very
much in dispute. The individual brings his rate of time-preference
into accord with the market rate, so long as that adjustment yields
him an advantage, and so far as he has something to exchange,
can furnish security, or is not hindered by fricetion in other ways.
Within the larger national economy, there are many imperfectly
connected, provinecial, class and family groups living in diverse
economic conditions, and having diverse capitalization rates. In
the central credit-market, as in the simplest typical price problem
of the sale of commodities, we may always conceive of some exeluded
 would-be buyers, and likewise sellers, who remain outside
the limits of actual trading because valuing their purchasing power
and the sale-goods in a ratio which gives no margin of advantage
at the market Driece.

V. Physical- and value-productivity distinguishein.
The more serious theoretical issue involved here is the ground
of Seager’s objection, which Fisher does not touch in his reply.
It is that the technical productivity of agents is the cause of the‘
impatience. Seager says:**
So far as I can see, with the technical superiority of present over
future goods, or the productivity of capital, absent, the question as to
whether interest would continue or not is an entirely open one. , . Is
it [time-preference] not rather a result of the present industrial organization
 of society arising chiefly from the fact that capital plays
such a tremendously important role in production and that, under the
system of private property in the instruments of production and free
zompetition, capitalists can secure a return corresponding, at least
roughly, to the part of the value-product that is economically imputable
to the assistance which their capital renders? "That is the view of the
productivity theorists.
Whereupon Seager enters into a defense of the productivity
theory, via a direct denial of Böhm-Bawerk’s eriticism of it as
adopted by Fisher.“
Seager’s argument at this point seems, indeed, to imply, as Fisher

* AMERICAN Economic Review, Dec. 1912, pp. 841-842.
® Fisher has followed Böhm-Bawerk in presenting objections to the producvity
 theory in terms that logically invalidate every productivity theory and,
apparently, is again following his example in withdrawing the objections in
so far as they apply to any but the naive theories. (See above, pp. 70-71.)