shows, in effect, that the substitution of one income stream foranother or, as he says, the “transformation in time” is only aparticular case of a more general transformation which is dealtwith in the theory of production. His indifference equationsfor consumers correspond in a general way to my impatienceprinciples and the analogous equations for the obstacles inhis treatment of production correspond likewise to my oppor-tunity principles.
The fundamental differences between the approach of Walras and Pareto on the one hand and mine on the other seem to befour:
(1) Walras and Pareto determine the rate of interest simul-taneously with all the other unknowns of the problem — thequantities of the commodities exchanged and the services usedin their production and the prices of the commodities and theservices, while I try to isolate the interest problem by assumingthat most of such unknowns have already been determined andconfine my discussion to the special factors directly affectingthe rate of interest.
(2) They both treat what I call interactions or intermediateservices along with the ultimate factors — our desires or tastes(les gouts) and the obstacles which must be overcome to satisfythem — while I try at the outset to get the interactions canceledout, leaving only the income stream and (labor) sacrifice.
(3) Neither Walras nor Pareto has elaborated the conceptand principles of an income stream.
(4) Neither has elaborated the concept or principles ofopportunity as a choice from among a series of income streams,although it is, in part, implied in Pareto 's treatment. 3
8 Cours d’Economie Politique, Vol. I, p. 314.
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