THE THEORY OF INTEREST

§11. The Formula Method Helpful

While this and the previous chapter are largely re-statements in terms of formulas of Chapters X and XIin terms of diagrams, which, in turn were largely restate-ments of Chapters V and VI in terms of words, never-theless, these formula chapters have a value of theirown, just as did the geometric chapters.

In particular, the formula method has value in showingdefinitely the equality between the number of equationsand the number of unknowns, without which no problemof determining variables is ever completely solved.

It is for this reason that these restatements are in-cluded in this book. In fact, if I were writing primarilyfor mathematically trained readers, I would have reversedthe order, giving the first place to the formulas, followingthese with the charts for visualization purposes, and end-ing with verbal discussion. Each method contributes itsdistinctive help toward a complete understanding of whatis, at best, a difficult problem to encompass by anymethod at all. I have, therefore, included in these formulachapters, as in the geometric ones, several points not welladapted to the more purely verbal presentations of Chap-ters V and VI.

Two corollaries follow. One is that any attempt tosolve the problem of the rate of interest exclusively asone of productivity or exclusively as one of psychologyis necessarily futile. The fact that there are still twoschools, the productivity school and the psychologicalschool, constantly crossing swords on this subject isja,scandal in economic science and a reflection on the in-adequate methods employed by these would-be destroyersof each other. Each sees half of the truth and wrongly

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