THE THEORY OF INTEREST

to reduce the rate of interest is the love of one’s childrenand the desire to provide for their good. Wherever thesesentiments decay, as they did at the time of the declineand fall of the Roman Empire, and it becomes the fashionto exhaust wealth in self-indulgence and leave little ornothing to offspring, impatience and the rate of interestwill tend to be high. At such times the motto, “After usthe deluge,” indicates the feverish desire to squander inthe present, at whatever cost to the future. 13

On the other hand, in a country like the United States ,where parents regard their lives as continuing after deathin the lives of their children, there exists a high apprecia-tion of the needs of the future. This tends to produce alow degree of impatience. For persons with children,the prospect of loss of earnings through death onlyspurs them all the more to lay up for that rainy dayin the family. For them the risk of loss of incomethrough death is not very different from the risk ofcessation of income from any ordinary investment; insuch a case the risk of cessation of future incomethrough death tends to lower their impatience for in-come. This act supplies the motive for life insurance.A man with a wife and children is willing to pay a highinsurance premium in order that they may continueto enjoy an income after his death. This is partly re-sponsible for the enormous extension of life insurance.At present in the United States the insurance on livesamounts to over $100,000,000,000. This represents, forthe most part, an investment of the present generationfor the next.

An unmarried man, on the other hand, or a man whocares only for self-indulgence and does not care for pos-u See Rae, The Sociological Theory oj Capital, p. 97.

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