OBJECTIONS CONSIDERED

sible, because of the divergent approaches, to expresssuccinctly the criticisms which revolve about this point,certain examples may be given to set forth their generalcontent and character.

Professor Thorstein Veblen , for example, asserted thatinterest did not come into existence until a high state ofdevelopment had been reached in business and in moneyeconomy and credit economy. He argued that crediteconomy giving rise to interest economy has existed for“only a relatively brief phase of civilization that has beenpreceded by thousands of years of cultural growth duringwhich the existence of such a thing as interest was neversuspected” (p. 299).

“In short”, Professor Veblen continued, “interest is abusiness proposition and is to be explained only in termsof business, not in terms of livelihood as Mr. Fisher aimsto do” (p. 299). He admitted that business may be thechief or sole method of getting a livelihood, but assertedthat business gains are not convertible with the sensa-tions of consumption, as he thought my theory requires(pp. 299 and 300). Any argument for convertibility, orequivalence, is fallacious because “habitual modes ofactivity and relations have grown up and have by con-vention settled into a fabric of institutions” (p. 300).

If, at the start, we grant the postulate that the market Irate of interest as set on money loans under a moneyeconomy or credit economy is the only interest rate exist-ent, we are confronted with the problem of explainingwhy such a rate of interest exists. Institutions of them-

sertation at Harvard University, 1926; Schumpeter , Theorie der Wirt-schajtlichen Entwicklung, p. 363. Criticisms of a similar character havebeen received in private correspondence from several of those who readthis book in manuscript, particularly Professors L. D. Edie, B. H.Beckhart, and C. 0. Hardy.

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