THE THEORY OF INTEREST

duced the two circumstances into the hypothesis only to make it alittle more true to life, or, rather, to keep it from being quite absurd.Take, for instance, the influence of the reduction due to perspectiveentirely out of the illustration.”

In his table it is true that the month’s labor availablein the present is more highly valued than the samemonth’s labor available at a later date. But Bohm-Bawerk carefully retained in his illustration one of the “twocircumstances” which he told us could be discarded,namely, the relative overprovision for the future. To leaveone of these two circumstances effective instead of bothis merely to change slightly the series of “reduced mar-ginal utility”. The change in the particular numbers isquite immaterial so long as the series is still descending,and it does not matter whether the descent is due toperspective or to the relative underprovision for the pres-ent, or to both.

The only fair test of the independence of Bohm-Bawerk’ s third factor—the alleged technical superiorityof present over future goods—would be to strike out boththe other elements (underestimate and overprovision ofthe future) so that there should be no progressive de-crease in marginal utilities; in other words, to make thenumbers representing “reduced marginal utilities” allequal. Bohm-Bawerk, for some reason, hesitates to dothis. He says : 33

“But if we were also to abstract the difference in the circumstancesof provision in different periods of time, the situation would receivethe stamp of extreme improbability, even of self-contradiction.”

Even if this be true, and in my view it is not, it is noreason for refusing to push the inquiry to its limit. When

33 Positive Theory oj Capital, p. 269.

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