THE THEORY OF INTEREST

its maximum present value when invested so as to maturein 1893. In this latter case, however, the maximum wasonly 720 as compared with the maximum of 840 for amonth’s labor available in 1888.

Bohm-Bawerk therefore concludes that a month’s laboravailable in 1888 is more productive than one available in1889, 1890 or any succeeding year. In other words, en-tirely independent, according to him, of the perspectiveunderestimate, and the under-endowment of the present,there inheres a technical superiority in present overfuture goods.

“This result”, he writes, 31 “is not an accidental one,such as might have made its appearance in consequenceof the particular figures used in our hypothesis. On thesingle assumption that longer methods of production leadgenerally to a greater output, it is a necessary result; aresult which must have occurred, in an exactly similarway, whatever might have been the figures of quantityof product and value of unit in the different years.”

But Bohm-Bawerk is mistaken in ascribing any part ofthis result to the fact that the longer processes are themore productive. In his tables he assumes the existence ofone or both of the other two factors—the relative under-provision for the present as compared with the future,and the perspective undervaluation of the future, due tolack of intellectual imagination or emotional self-control.It is these elements, and these alone, which produce theadvantage of present over future goods which the tablesdisplay.

That the result does not at all follow from “the singleassumption that longer methods of production lead gen-erally to a greater output” and has nothing whatever to

“ The Positive Theory oj Capital, p. 268.

[478]