CHAPTER VI

THE PROBLEM OF INTEREST

THE SHARE OF CAPITAL IN DISTRIBUTION

N dealing with the value of capital, we are confronted
I with two interpretations of the word. These interpretations
 correspond to, though they are not entirely identifiable
with, the two senses of value, namely, value-in-exchange
and value-in-use, With capital, the two uses of the term
correspond to the difference between a general control of
productive appliances, and particular appliances appropriated
to special uses. In the latter connection, we are concerned
with the valuation of goods whose services to their possessor
are not direct, instrumental goods as they are sometimes
called. Their value is arrived at by the application of
principles already discussed. The demand for them is
derived from the demand for the consumable goods in the
production of which these instrumental goods are used.
The supply is, as with other goods capable of being increased
in amount in response to demand, controlled by considerations
of the relation of their cost of production to the utility they
possess as instrumental goods. That utility is related to
the supply, as in other cases of value. Whatever may be
the case as regards capital in general, it is true that the
continued increase of the quantity of one particular instrumental
 good, which is associated with any given aggregate
of other means of production, will not result in a continued
proportionate increase of values produced. If more capital
is to be employed in the industry in question, it will be
given a variety of forms. Indeed, the employment of more
capital may lead to an abandonment of some (perhaps many)