THE THEORY OF INTEREST

end, because civilized societies in self-protection frownupon chattel slavery and involuntary servitude. Manyexamples, however, of forced labor and even slavery stillsurvive. The negro farmers of the Southern States, theMexican peons, the peasants of Russia until recently, theforced labor and slavery in many tropical colonies, suchas Java , 10 the Congo, and other African countries, areexamples in point.

Reversely, when an individual has saved a considerablecapital, his rate of preference for the present diminishesstill further, and accumulation becomes still easier. Hence,in many countries the rich and poor come to be widelyand permanently separated, the former to constitute anhereditary aristocracy of wealth and the latter, a help-less proletariat.

This progressive sifting, by which the spenders growpoorer and the savers richer, would go on even if, as as-sumed in our first and second approximations, there wereno risk element. But it goes on far faster when as inactual life there is risk. While savings unaided by luckwill ultimately enrich the saver, the process is slow ascompared with the rapid enrichment which comes fromthe good fortune of those few who assume risks andthen happen to guess right. Likewise, while millions ofpeople lose their small properties by thriftlessness, themore rapid impoverishment comes from guessing wrong.This will often turn a rich man into a poor man withina few years and sometimes within a few days.

It should also be noted, especially when the elementof uncertainty is taken into account, that borrowing maybe the means of gaining great wealth quite as well as of

10 See Day, Clive. The Dutch in Java. New York , The Macmillan Co.,1904, Chapter X.

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