CH. 16 OBSERVATIONS ON NATURE OF CAPITAL 221

changes in technique, taste, population and institutions,with the products of capital selling at a price pro-portioned to the labour, etc., embodied in them onjust the same principles as govern the prices of con-sumption-goods into which capital-charges enter in aninsignificant degree.

If I am right in supposing it to be comparativelyeasy to make capital-goods so abundant that themarginal efficiency of capital is zero, this may be themost sensible way of gradually getting rid of many ofthe objectionable features of capitalism. For a littlereflection will show what enormous social changeswould result from a gradual disappearance of a rate ofreturn on accumulated wealth. A man would still befree to accumulate his earned income with a view tospending it at a later date. But his accumulation wouldnot grow. He would simply be in the position ofPope’s father, who, when he retired from business,carried a chest of guineas with him to his villa atTwickenham and met his household expenses from itas required.

Though the rentier would disappear, there wouldstill be room, nevertheless, for enterprise and skillin the estimation of prospective yields about whichopinions could differ. For the above relates primarilyto the pure rate of interest apart from any allowance forrisk and the like, and not to the gross yield of assetsincluding the return in respect of risk. Thus unlessthe pure rate of interest were to be held at a negativefigure, there would still be a positive yield to skilledinvestment in individual assets having a doubtful pro-spective yield. Provided there was some measurableunwillingness to undertake risk, there would also bea positive net yield from the aggregate of such assetsover a period of time. But it is not unlikely that, insuch circumstances, the eagerness to obtain a yieldfrom doubtful investments might be such that theywould show in the aggregate a negative net yield.