IF, as we have endeavoured to show, Jevons and Bohm-Bawerk have failed to solve the problem of Value by resting it on a single factor, Utility, much more will their failure be apparent in their solution of the problem of Interest. Indeed the depth of absurdity which Bohm-Bawerk has reached in his solution of this problem, through his determined adherence to the one-sided Economy of Jevons, is one of the best illustrations which these latter days afford of the pedantry and sterility into which the academical Political Economy has fallen by making of itself a narrow specialism divorced from the broad general currents of the business world. The problem of Interest has always been a controversial one in its purely economic aspect, but its ethical justification since the days of Aristotle - with the Canon Law of the Church thundering against it all along down the Middle Ages - has been to many pious souls an even more perplexing one. It gave Ruskin, who was himself a wealthy man and in his early days drew a large part of his income from it, many a pang in his later years, and I imagine he went to his grave with the problem both on its speculative and on its ethical side still unresolved.

But to see how Bohm-Bawerk proposes to solve the problem, we must search for the root-principles of his solution in the scattered seeds let fall by Jevons; and in doing this, we shall at the same time be enabled to catch a passing glimpse of the more characteristic innovations made by Jevons himself in the orthodox Economy bequeathed to him by Mill and Ricardo. But it is important to remember at the outset that Jevons in practically all other doctrines but those of Value and Interest still adhered to the orthodox Economy. He believed, for example, in the orthodox theory of Rent and Population; and held with Mill (but with a difference) that Wages are paid out of Capital and, in consequence, that if Trades-Unions can get a higher rate of wages out of this capital, there will be less left to be divided among the other workers; as well as other illusions deducible from the orthodox symbol of the divided stick. Again, like the orthodox Economists, he could find no place for Consumption as a definite factor in his system, and so did not see the essentially dynamical nature of the science, - a cardinal and fatal illusion if our previous demonstrations have any validity.

Here and there, it is true, he introduces a variant on the old doctrines, as when, for reasons which we shall presently see, he contends that although Capital is the result of Abstinence, it is the abstinence of the labourer rather than of the capitalist; or again where he denies that Profits must fall if Wages rise, and vice versa, because, as he says, not only are Profits not a fixed amount, but Ricardo's 'iron law,' which keeps Wages down to the 'bare subsistence' level, is not a true law; and therefore, that in the progress of society, although Profits always tend, they need not actually fall, as Mill feared, to a minimum after all. But as these are minor divergencies from the older doctrine, and still leave its fundamental principles unchanged, and as we have already tried to show in former chapters that the foundation principles of the orthodox Economy of Mill and Ricardo are all alike illusions, nothing more than the bare mention of these modified orthodox views of Jevons need detain us here.

Besides, it was not on these, but on his doctrine of 'final utility' as the sole 'cause' of Value, that he most prided himself; and it was on this doctrine that he hoped to lay the foundation for a new system of Political Economy. And as we have already discussed the fallacy of this one-sided explanation of Value in our last chapter, nothing remains for us here but to piece together those scattered observations bearing on the problem of Interest which he left more or 1< undeveloped himself, but on which his faithful disciple Bohm-Bawerk seized as a prize, and carried to their equally one-sided conclusion.

To begin with, then, we may note that at the very outset, Jevons falls into a fallacy which of itself is sufficient to ruin any and every deduction based on it. It consists in his identifying 'fixed' with 'circulating' capital, and both with 'the food and maintenance of labourers'; thus obliterating at the start what we have seen to be one of the most important distinctions in Political Economy, and the one, moreover, most fruitful in practical consequences. Or, to quote him precisely, he declares categorically that ' Capital consists merely in the aggregate of those commodities which are required for sustaining labourers of any class or kind engaged in work'; that 'to invest capital is to spend money - or the food and maintenance which money purchases - upon the completion of some work; and generally, that 'all employments of Capital resolve themselves into the fact of time elapsing between the beginning and the end of industry' - or in other words, that the longer it is necessary that labourers should be employed on an industrial undertaking before the finished product can appear, the greater the produce will be, and that this lengthening of the interval of time between the beginning and the end of the undertaking is the 'sole' use of Capital. And to punctuate and definitize these separate observations, he adds that he 'would not say that a railway is fixed capital, but that capital is fixed in the railway.' That is to say, that as the 'fixed capital' of the railway is only the food and maintenance of the workmen during the time they are engaged in preparing and making the railway, and as these, in turn, are the same as the money wages spent on them, it follows that, economically considered, a railway, a factory, or an engine, is identical with the money spent in making or building it - nothing more.