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1914] Interest Theories, Old and New 69

involved in this discussion has in the past been with Fisher so far
and so long as he adhered to a psychological explanation. And
yet, I must recognize the merit of Seager’s argument in several
respects, and, as a psychological theorist, I find myself more disquieted
 by Fisher’s reply than by Seager’s direct attack, Partieularly
 regrettable is the impression of confession and avoidance
which Fisher gives, He seems to capitulate on the main issue. To
the charge that he failed “to take account of the elements of productivity
 or the technique of production,” Fisher enters a denial‘
in terms which seem to imply that he is a good productivity theorist.
 This reply comes as a surprise even to those who were aware
of certain ambiguous expressions on this point in Fisher’s writings.
For if he has not meant to deny, in his previous writings, the
validity of productivity theories, one knows not what to believe.
Here are some significant passages:

There are many who, consciously or unconsciously, aseribe the phehomena
 of interest to the productivity of capital in general. .. .VYeta
very slight examination will suflice to show the inadequacy of this
sxplanation.®
To raise the rate of interest by raising the productivity of capital is,
therefore, like trying to raise oneself by one’s boot-straps.®
Absence of interest is quite compatible with the presence of physicalproductivity,
 and . . . therefore whatever element is responsible for
the existence of interest in the actual world, that element cannot be
physical-productivity.?
The conclusion, therefore, from our study of the various forms of
the productivity theory is that physical-productivity, of itself, has no
such direct relation to the rate of interest as is usually aseribed to it;
and in the theories which we have examined, the rate of interest is always
 surreptitiously introduced.®
“Interest is due to the productivity of capital” .. . This proposition
looks attractive, but it is superficial . . . the superior productiveness
of roundabout processes of production . . . has no Dawer whatever to
ereate interest?

Now, however, instead of meeting the question directly, and reafirming
 his disbelief in the productivity theory, he seems to
surrender his position as the ensiest way of ridding himself of

* AMERICAN Ecoxwomic Review, Sept., 1913, p. 610.
"The Rate of Interest, 1907, p. 12.
> Idem, p. 15.
‘Idem, p. 22.
> Idem, p. 28.
*“The Impatience Theory of Interest,” Seientia, vol. IX, 1911, pp. 383, 384,
206

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