94 ECONOMIC PRINCIPLES
as compared with those of previous generations, are readily
intelligible.
Though, when dealing with the investment of free capital,
the supply and demand were considered without reference
to the vast mass of invested capital, on the ground of the
difficulty of extricating capital from investments already
made, it is quite possible to take a broader view, and to
include the whole field of investment, and the total amount
of capital available, within the scope of our discussion on the
subject of return to capital and rate of interest. Indications
have already been given that no form of capital is free from
liability to wear out and need replacement. In the course
of a sufficiently long period, therefore, and in reference to the
conditions which tend to be set up ultimately, the difficulty
of withdrawing capital from actual investments may be
ignored. Given sufficient time, capital may be recovered
from the most permanent investment, though some loss may
have to be faced. Such loss of value would not be avoided
by avoiding the withdrawal of the capital. The value of
existing invested capital is a result of its earning power,
and is practically independent of what it cost when the investment
 was made. Such earning power means a power to
aid in producing consumable goods or services, which goods
or services embody some part, even if only a small part, of
the value of the capital in question, That value is, therefore,
gradually realisable in a form other than that of the
appliances for production, the capital, under consideration.
If we can take a standpoint from which all capital is able to
be regarded as potentially available for any employment, we
need not limit our discussion of the rate of interest to a
problem in which free capital alone is concerned, or rather
we treat all capital as free capital. The result is not different
to what we may arrive at by a path already indicated clearly
enough. Where capital is earning a rate on its cost above
the rate on current loans, due allowance for risk having
been made, the competition of new capital operates, unless
monopoly privileges exclude competition, to increase the
supply, and hence reduce the value, of the products of that
capital. Thus its earning power is reduced in the direction