THE THEORY OF INTEREST

"It is not possible,” it is objected, “to conceive of aliteral stock of services at an instant of time; it is possibleto conceive of their present worth as a financial fund atan instant of time. Services (taken in the sense of useseither of wealth or of human beings) may conceivably bedelayed or hastened, but they are in their very nature aflow; they cannot be heaped up and constitute a stock ofservices. They can, at most, as they occur be 'incorpo-rated’ in durable forms of wealth. If this is so, then whythis elaborate contrast between a flow of services, and afund of something quite different? It is the vestigial re-mains of the older conception that Fisher has beenobliged to discard.” 11

While, however, I agree that these concepts of capital(as a fund of wealth) and income (as a flow of services)are not co mmen surate with the theory of interest, itwould be a mistake to conclude from the emphasis placedon capital value, not capital goods, in the The Nature ofCapital and Income, which was written as an introduc-tion to the theory of interest, that the concept of capital lgoods emphasized by me in 1896 has been shelved asjuseless.

In the first place, the goods concept is itself a step inthe formulation of the value concept, and secondly, TheNature of Capital and Income does not attempt to coverall of the four different relations between capital andincome but only that one relation, income value to capitalvalue, which is of importance to the theory of interest,y This valuation concept of capital, which in my view isnecessary to the solution of the interest problem, doesnot distinguish between land and “produced means to

11 Fetter, Clark’s Reformulation of the Capital Concept. EconomicEssays Contributed in Honor of John Bates Clark, p. 152.

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