SUMMARY

social stratification to be rigid, the great majority of thecommunity, on the one hand, through poverty and therecklessness which poverty begets, tends to have a highrate of preference for present over future income,whereas, at the opposite end of the ladder, the inheritedhabit of luxurious living tends, though in a different way,in the same direction. In such a community, the rate ofinterest is likely to be unduly high.

§6. Conclusion

From the foregoing enumeration, it is clear that therate of interest is dependent upon very unstable influ-ences many of which have their origin deep down in thesocial fabric and involve considerations not strictlyeconomic. Any causes tending to affect intelligence, fore-sight, self-control, habits, the longevity of man, familyaffection, and fashion will have their influence upon therate of interest.

§7. The Future

From what has been said it is clear that, in order toestimate the possible variation in the rate of interest,we may, broadly speaking, take account of the followingthree groups of causes: (1) the thrift, foresight, self-control, and love of offspring which exist in a community;(2) the progress of inventions; (3) the changes in thepurchasing power of money. The first cause tends to lowerthe rate of interest; the second, to raise it at first andlater to lower it; and the third to affect the nominal rateof interest, in one direction and the real rate of interestin the opposite direction.

Were it possible to estimate the strength of the variousforces thus summarized, we might base upon them a

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