OBJECTIONS CONSIDERED

it is our business to explain. Labor cost and waiting aretoo radically different to be grouped together as thougheach were a cost in the same sense as the other.

The cost of waiting can neither be located in time, in-dependently of the item waited for, nor can it, like anyother item, be discounted, for it is itself the discounting.If we discount the discounting, we would have to discountthe discounting of the discounting and repeat the processindefinitely.

If we insist on calling waiting or abstinence a cost wereduce to absurdity all our economic accounting. Amongother things, the simplest, purest type of income, a per-petual annuity, will be found, by such accounting, to beno income at all.

An able critic and correspondent, after admitting thisfact, says simply, “What of it?”

Well, perhaps nothing vital as to the theory of interestitself. And since that is, after all, the sole subject of thisbook I shall relegate to the Appendix the discussion ofWhat of it? as to accounting. 40

§8. Empirical and Institutional Influences on Interest

Rates

The problem of fully determining any specific marketrate of interest is an intricate and baffling problem tosolve just as is the problem of fully explaining any his-torical fact whatsoever. This volume makes no claim tobeing the monumental work necessary to analyze everypossible influence that acts upon such a rate. The purposeof the book is rather to isolate the fundamental or basicforces which are operative in the interest problem.

The approach is theoretical, rational, or philosophic, if

"See Appendix to this Chapter, §1.

[ 487 ]