THE THEORY OF INTEREST

into the future were predestined to melt way each year by50 per cent.

One reason why we do not encounter such cases, withnegative rates of return over cost, negative rates of inter-est, and negative rates of time preference is that we haveother income available for the future besides what canbe carried over from present stocks. Future figs will comeinto being from fig trees and even existing stocks of figsand other perishables may be carried over for future useby canning, cold storage, preservation and similar proc-esses. Yet we do, even in our real world, occasionallyhave cases such as of spoiling strawberries, where, therate of interest reckoned in terms of the strawberriesis occasionally negative.

We see, then, that there is no absolutely necessaryreason inherent in the nature of man or things why therate of interest in terms of any commodity standardshould be positive rather than negative. The fact thatwe seldom see an example of zero or negative interestis because of the accident that we happen to live in anenvironment so entirely different from that of the ship-wrecked sailors.

§6. The Imaginary “Sheep” Example

The next example is more like that in our real world.In the real world our options are such that if presentincome is sacrificed for the sake of future income, theamount of future income secured thereby is greater thanthe present income sacrificed. That is, the income whichwe can extract from our environment is not, in theaggregate, a fixed quantum like a storehouse of hard-tack ; still less is it like a storehouse of dwindling contents.On the contrary, Nature is, to a great extent, reproduc-

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