I2
Frank A, Fetter [March
opposing each other.®® Seager and Brown stand together on one
side of the circle of opinion, glancing now and then with one eye
at a psychological explanation (for consumption loans) and with
the other eye fixed most of the time on the enterpriser-productivity
explanation. They are not far away from Böhm-Bawerk, who is
likewise eclectic; but their conception of productivity goes little
farther than the personal enterpriser, whereas Böhm-Bawerk seeks,
though vainly, in his roundabout theory, to extend his explanation
formally to the impersonal productive powers in the agents.
Nearly opposite them stands Fisher, directing his attention mainly
upon the market for money loans, but giving many glances before
and after to the psychological causes, in accord with the capitalization
theory. "The capitalization theorist at another point in the
circle is faced directly toward the psychological explanation of
interest, and sees the other features of the picture in due perspective
to this central fact.
Seen from any of these standpoints, the interest paid on consumption
loans is and must be explained in purely psychological
terms. "The capitalization theory, alone, is not eclectic, and explains
interest on consumption and on production loans, in the
same psychological terms. It alone sees the enterpriser’s part
embraced within the larger circle of time-preference, and explains
interest on productive loans as but the reflection of the time-preference
in the minds of the great body of buyers in the community,
xhose representatives and intermediaries the enterprisers are.
FRANK A. FETTER.
Princeton University.
apon agricultural industry of enlarging man’s power over the production of
fertile and arable qualities in land.
% A different conception, apparently a unique variation of the enterpriserproductivity
theory, is the dynamic theory of Professor Schumpeter, as presented
in his Theorie der Wirtschaftlichen Entwicklung, 1912, and reviewed at
length by Böhm-Bawerk in the Zeitschrift für Volkswirtschaft, 1913.
