THE THEORY OF INTEREST

outgo. Capital involves command over income with-out which no one could subsist, or at any rate subsistwith comfort. The capitalist, by using his capital, evento the extent of using up some of his accumulations, cansupply himself with the immediate income necessarywhile he is waiting for returns on his new ventures. It isas a possessor of income that he is enabled to subsistwhile waiting. He is enabled to invest in an ascending, orslowly returning, income stream only by first having atcommand a quickly returning income stream. We maysay, therefore, that a capitalistic method is a method re-sulting in an ascending income stream, and it is so calledbecause it is open chiefly to those who have commandof other—often descending—income streams, such per-sons being necessarily capitalists, that is, possessors ofmuch rather than little capital.

§8. Opportunity to Change the Application of Labor

The best example of the choice between those uses ofcapital instruments affording immediate and those afford-ing remote returns is found in the case of human capital,commonly called labor. Man is the most versatile of allforms of capital, and among the wide range of choices asto the disposition of his energies is the choice betweenusing them for immediate or for remote returns. Thischoice usually carries with it a choice between correspond-ing uses of other instruments than man, such as land ormachines. But the existence of optional employments oflabor, however inextricably bound up with optional em-ployments of other instruments, deserves separate men-tion here both because of its importance and because itusually supplies the basis for the optional employmentsof other forms of capital.

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