1914] Interest Theories, Old and New

85

a greater value than the goods which would have been obtained
without the capital. Hence, Seager concludes:
Admitting the physical-productivity of capital . . . the value-productivity
 ... or more accurately an increase in the total value-product
as a consequence of the assistance which capital renders to production
seems to me to follow as a logically necessary consequence.
Here, where Seager would expect dissent, I readily agree; but
hasten to add that fhis value-productivity is not at all fhat of
which the productivity theorist speaks in his interest theory. Here
we are saying merely: If agents used at this moment produce more,
the products (speaking of the general and usual result) have more
value here and now than the products that could have been obtained
without the help of the productive agents. But the value-produetivity
 which furnishes the motive to the enterpriser to borrow and
gives him the power, regularly, to pay contract interest, is due,
not to the fact that these products will have value when they come
into existence, but to the fact that their expected value is discounted
 in the price of the agents bought at an earlier point of
time. "The two relations are in different planes. Itis a problem of
two dimensions which may be represented as follows:

A (Physical-productivity)

synchronous
relation

, Time ;
C (Capitalization)................B (Value-productivity)
relation

Present

FTFature

The modern productivity theorist assumes as quite obvious the
value-productivity B, as derived synchronously from the physical
productivity A, but he ignores the problem of the discount relation
in time between B and C. The pseudo-value-produetivity assumed
in the productivity theory of interest is all, however, involved in
the unexplained discount relation between B and C, not in the
identity relation between A and B. "This is the petitio principü of
the theory.
The valne-surplus referred to is that part, imputable to, and
varying with, the time element, and not that due to the peculiar
commercial skill, or to the luck, of the enterpriser, in finding unusually
 low valued agents in one place, or unusually high' valued
products in another, If one did not bear in mind the complex