1914] Interest Theories, Old and New 87

nature, and the other to labor. It is, of course, futile to attempt
here a restatement of the reasons, negative and positive, against
this view. "They have been pretty fully stated elsewhere, Seager
seems still to conceive of the interest problem as connected only
with produced means of production, as did the older English
economists, and as all productivity theorists incline to do. This
inclination is found along with a treatment limited mainly, if not
entirely, to contract interest.
But how can the “economic interest” aspect of the problem be
limited to the income yielded by tools and machines? Why is not
this problem presented in the case of incomes from land (or from
an orchard, to which example Seager objects as not being typical
of all forms of capital)? How account for the capitalization of
this land and of this orchard? By applying a rate of interest derived
 from the money market as Fisher would seem to do, or a rate
taken from the market for the loan of purely “produced” capital
zoods (whatever that may mean)? Cannot unproduced agents be
capitalized unless the rate of discount is first discovered by making
produced goods? Is not a capitalization rate conceivable in a
community where land is the only form of wealth that is bought
and sold? If so, then the thought is not avoidable that a rate of
interest on contract loans to purchase land may prevail, reflecting
this implied rate of capitalization—the chance for profit operating
as a motive for the loan just as it does in manufacturing and commerce.
 Is interest not connected with a loan of money to buy
“natural” agents as fully as with that to buy “artificial” agents?
An answer to these questions inevitably carries one into the atmosphere
 of the capitalization theory, where the arbitrary limitation
 of the interest problem to loans made to buy “produced”
agents becomes unthinkable.
But there is still the old question, how account for the tendency
of profits (in the old broad sense of the term, including interest)
toward equality; how explain the fact that on the average, though
with many exceptions and fluctuations, the rates of profit to be had
by productive borrowers in the various industries do not get so very
far apart? "There is the old explanation of cost-of-production
of capital, upon which the latest productivity theorists still rely,
and there is the capitalization theory. Both of these concede a
place to the enterpriser. In the older view, the place is worthy
to be called causal, in that, when any agent yields an abnormal
return, he produces more agents, by incurring “costs” (which are