Economic essays

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Monograph

Identifikator:: 1753623200

URN:: urn:nbn:de:zbw-retromon-136107

Document type:: Monograph

Title:: Economic essays

Place of publication:: New York

Publisher:: Macmillan

Year of publication:: 1927

Scope:: viii, 368 S.; Ill., graph. Darst.

Digitisation:: 2021

Collection:: Economics Books

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Document type:: Monograph

Structure type:: Chapter

Title:: Alternatives seen as basic economic facts / Franklin H. Giddings

Collection:: Economics Books

202 ECONOMIC ESSAYS IN HONOR OF JOHN BATES CLARK iy ay has been nearly ignored in economic theory for more than thirty years. Believing as I still do (and more strongly than ever) that the supply of loanable present concrete goods is a factor in true interest, and that such supply is in a specific way conditioned by cost, I venture once more to state (in four sentences) the bit of interest theory that I offered in 1889, 1890, 1891 as follows: The supply of immediately deliverable goods can almost instantly be increased by accelerating the processes of produc- tion. Accelerated production is more costly than production at usual speed. It is therefore the abnormal cost of accelerated production which normally limits the supply of immediately deliverable goods. Therefore the abnormal cost of accelerated production is a factor in the rate of true interest. The Austrian theory of interest occupied itself almost wholly with the stronger demand for present than for future goods. Later theory has not advanced much beyond it, or much beyond the Austrian explanation of the preference for the bird in hand. Stripped of various wrappings it amounted to an affirmation of impatience. We must have this, that and the other thing now, it was argued, because we are too childish to be able to wait. Every suggestion, even when entertained or advanced by Bohm-Bawerk himself, that the sooner we get capital goods in hand, the sooner we can begin to make them earn for us, was handled with extreme caution as likely to lead us into the bog of a “productivity theory” of interest. I have to admit quite shamelessly that I have never been able to take the impatience explanation seriously. [t is a rather extraordinary Hamlet with Hamlet left out. It is not because we cannot wait for a while that we demand capital goods now instead of tomorrow; it is because so often it happens that unless we can have capital goods now we must forego using them forever. The boy who wants an education in civil engineering must get it in youth or early manhood or never be a civil engineer. Opportunities come to the young lawyer, the young surgeon, the young chemist, which will not return. They come to the business man, to be held by “refusal” for a few days at the longest, then to be taken or for all time relinquished. This is just another way of saying that there are limits to that instant production of present goods by working over-time or harder. about which we were 3 moment ago discoursing. Increas-

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