THE THEORY OF INTEREST

§4. Investment Opportunity for Society as a Whole

In modern society hermits and self-supporting ranchesare so rare that we cannot find any important cases whereinvestment opportunities exist in pure primitive formand apart from the alloy of trading. In fact, the mosttypical investment opportunities are not only full of suchalloys but are tied up with market financing operations.Almost every big investment opportunity is married to aproductive loan.

The best picture on a big scale of investment oppor-tunity, divested so far as may be of all ancillary marketfeatures, is to be found by considering society as a wholeinstead of the individual.

Society as a whole cannot borrow or lend as an indi-vidual can. This world can, for instance, add nothingto this year’s income by a loan from elsewhere and sub-tract this amount with interest from future income. Yetit can and does vary and control the total income streamaccording to investment opportunity.

This picture, in the large, of society arranging, modi-fying, adjusting its total income stream as between thisyear and later years is the most important picture we candraw of investment opportunity not only because it auto-matically leaves out borrowing and lending, or buyingand selling, but also because it automatically reduces thepicture of income to its fundamental terms of real or,as I prefer to call it, enjoyment income and its obverse,labor pain. We do not have to think so vividly, as we doin the case of an individual, of money items and inter-mediate processes. We can without difficulty fix our at-tention on the final consumption. Society is like RobinsonCrusoe picking and eating his berries, however compli-

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