1914] Interest Theories, Old and New 89

are taken as a basis from which to calculate the rate of interest, a
sort of turtle’s-back (as in the ancient theory of the universe) on
which the giant, Entrepreneur, stands while carrying on his back
the burden of interest.
The capitalization theory views the causal order very differently.
First, time-valuation being embodied in durable agents with incomes
 extending over a period of time, becomes the capitalization
of agents containing future uses, this involving a rate of timediscount.
 "This, in a market with exchange, becomes price, which
is cost to the enterpriser seeking a profit by buying these factors,
combining them more or less with his own services, and selling
them. "This process. is constantly levelling down inequalities in
capitalization as between different commodities and markets. All
men together are helping to evaluate all of the economic goods in
the community. Within this larger circle of explanation, the part
of the enterpriser is secondary and intermediate. He does not
represent any additional “technical productivity” cause, coming
in alongside of the psychological explanation of interest, The
chance of income for himself exists before he makes a move, partly
because the future incomes have already been discounted (the pure
capital-income aspect), and partly because all agents are not diszounted
 at any moment at exactly the same, or exactly the right,
rate (the commercial profit aspect). It is because of the chance
of private profit already inherent in the situation that the producer
is led to act in his intermediary capacıty.

VII. The same dificulties again.
The article by Professor H. G. Brown,® a former pupil and
present colleague of Fisher, appeared almost simultaneously with
Fisher’s concessions to the produetivity theory. Professor Brown,
agreeing almost completely with Seager, formulates an eclectic
theory.

The position taken by the present writer is, that productivity and
impatience are coördinate determinants, Ze., that productivity is as
direct a determinant of interest as is impatience, and that productivity
nay be, in a modern community, the more important determinant.®*

% Cited above, p. 68. ,
= Quarterly Journal of Economics, Aug. 1913, p. 634. Here impatience
and. productivity are said to be coördinate determinants, though productivity
may be the more important; and again, page 645, impatience is said “to enter
into the chain of cause and effect” in a certain connection “as effect rather