THE THEORY OF INTEREST

§8. Importance of Invention

It has not been the purpose of this chapter to investi-gate the general effect of inventions, but merely theireffect on the rate of interest and rates of return.

Before leaving the subject, however, it should at leastbe stated that invention is a chief basis for progress incivilization and for increase in the income of mankind.The inventions of fire, the alphabet, and the means ofutilizing power—first of animals, then of wind and water,then of steam and electricity—and their manifold appli-cations, especially to transportation and communication,have made it possible for the earth to support its increas-ing population, and deferred the Malthusian pressureupon the means of subsistence; they have made possiblethe stable existence of great political units such as theUnited States ; and they have given opportunity for thepresentation, diffusion, and increase of knowledge in allits forms of art, literature, and science. And thus it hap-pens that invention is self-perpetuating. For not only hasscience sprung from inventions such as the printingpress, the telegraph, and specific scientific instrumentsfor observation, like microscopes and telescopes, or formeasurements, like chronographs, balances, and microm-eters, but modern science is now in turn yielding newinventions. Helmholtz ’s researches in sound led to thetelephone; Maxwell’s and Hertz’s researches on etherealwaves led to wireless telegraphy and the radio.

The conditions for the most rapid multiplication ofinventions are: (1) mental efficiency, dependent onheredity, hygienic habits, and the education (both gen-eral and technical) of human faculties, and for this theGreek motto “a sane mind in a sane body” is in point;

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