THE PROBLEM OF INTEREST 89

natural forces, than in the more direct processes. To achieve
these results, knowledge is needed of how to secure assistance,
or avoid resistance, from natural forces, and the devices to
that end are the forms given to capital. Capital has been
said to be the harness by which natural powers are guided
so as to assist mankind in his efforts. The steam-engine
serves to harness the expansive force of steam, and the more
perfect its construction, the more are hindrances from other
natural forces avoided, and the more completely is the aid
secured which this is capable of rendering. The extension
of knowledge enables the construction, or at any rate the
designing, of better, more effective harness for nature's
powers. Recent advances in electrical science abundantly
illustrate this.
The roundabout process is more productive than the
direct process, because the aid of nature, or the avoidance of
natural hindrances, can only be secured when the appropriate
appliances are provided. The provision of the appliances is
therefore a preliminary to their use, and thus the process is
indirect. The perfection of appliances frequently demands
the provision of yet other appliances, by means of which to
construct those we desire to employ. Thus increase of
indirectness in the process often means increase of efficiency.
Yet this is not so of necessity, and greater efficiency with
greater directness may be the result of increased knowledge
of natural laws, giving increased power to utilise natural
forces.

Increase of capital to be employed in industry involves
the progressive exhaustion of the productiveness of each of
the several forms in which capital may be embodied. These
forms are multitudinous, and hence exhaustion is not rapid.
Further, new devices for applying capital in economising
production are being constantly evolved, and this process
retards the rate at which the diminution of utility of capital
is manifested. If the process of invention be sufficiently
rapid, the change may be in the opposite direction, that is,
the means for utilising our knowledge of how to obtain aid
from nature’s forces may not expand as rapidly as our power
to apply those means: the marginal utility of capital may