THE THEORY OF INTEREST

investment will mature earlier than next year’s invest-ment . 35 If a fruit tree is planted today which will bearfruit in four years, the labor available today for plant-ing it is preferred to the same amount of labor availablenext year for the reason that if the planting is deferreda year, the fruit will likewise be deferred a year, matur-ing in five instead of four years from the present.It does not alter this essential fact to speak of the possi-bility of a number of different investments. A month’slabor today may, it is true, be spent in planting slow-growing or fast-growing trees, but so may a month’slabor invested next year. It is from the preference for theearly over the late fruition of any productive process thatthe so-called technical superiority of present over futuregoods, as conceived by Bohm-Bawerk, derives all its force.

Bohm-Bawerk, however, attempts to prove that histhird circumstance—the alleged technical superiority of- present goods—is really independent of the first two, bythe following reasoning: 30

“. . . if every employment of goods for future periods is, notonly technically, but economically, more remunerative than the em-ployment of them for the present or near future, of course menwould withdraw their stocks of goods, to a great extent, from theservice of the present, and direct them to the more remunerativeservice of the future. But this would immediately cause an ebb-tidein the provision for the present, and a flood in the provision for thefuture, for the future would then have the double advantage ofhaving a greater amount of productive instruments directed to itsservice, and those instruments employed in more fruitful methodof production. Thus the difference in the circumstances of provision,

“ This is true under the assumption, implied in Bohm-Bawerk ’s tables,that the product is the same except as to the time of its availability,namely, that the series of figures called “units of product” are identicalas shown in his tables.

" Positive Theory of Capital, pp. 269 and 270.

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