Interest (economics)

“ To this I say, If it follow that the fruits of our Land, in consequence of such a Law for abatement of Interest, grow generally dear, it is an evident demonstration that our People grow richer; for generally, wherever Provisions are for continuance of years dear in any Country, the People are rich ”

“ The economic interest, as a function of intelligence, finds its proper expression in a valuation set upon one thing in terms of another—a valuation that is either a step in a settled plan of spending and consumption or marks the passing of an old plan and our embarkation on a new. From such a view it must follow that the economic betterment of an individual or a society can consist neither in the accumulation of material wealth alone nor in a more diversified technical knowledge and skill. ”

“ Therefore, for the sake of public enterprise in its manifold forms, for the sake of that prosperity which depends on human industry, for the sake of manufactures, for the sake of commerce, and especially for the sake of railroads, by which all these are quickened, we must do what we can to reduce the general rate of interest, which is now such a curb on enterprise; and here we must begin with our own bonds. ”

“ It is a measure of political economy for us to strive to promote the general interest, and to study to do the most good for the community we live in. If we cannot abide the appeal to our consciences, let us abide the appeal to our pockets. ”

“ A careful calculation of interests and general increase of the nation’s wealth discovers that less than a two per cent. interest is required to make the capitalist and the laborer stand upon an equality. ”

“ From the principles deduced in the preceeding chapter, we have seen how, without the aid of any law, the interest of money, in a trading nation, becomes determined, from natural causes, and from the irresistible effects of competition. ”

“ It proceeds on a supposition entirely at variance with that on which all the theorems of political economy are grounded. It assumes that mankind in general will habitually act in a manner opposed to their immediate and obvious pecuniary interest. ”

“ The common proportion between capital and profit, therefore, would be the same, and consequently the common interest of money; what can commonly be given for the use of money being necessarily regulated by what can commonly be made by the use of it. ”

“ For instance, the person who had one horse too many, would be obliged to look for another who was in need of one etc. And how difficult a task it would be to determine the amount of interest, if it had to be paid in produce or kind, and even to make a return in produce or kind of capital which had been presumably used. ”

“ The second maxim of those who reason upon trade and government, is, to assert that low interest, is a certain sign of great plenty of money in a nation, for which, as in many other articles, they produce the examples of Holland and England. ”

“ These are the main problems of Political Economy. To solve, or attempt to solve them, we have to describe accurately the existing mechanism, and to suppose that it will regulate itself on the assumption which I have indicated as to demand and supply, the flow of capital and labour, and so forth. To go beyond these assumptions, and to justify them by psychological and other considerations, may be and is a most interesting task, but it takes us beyond the sphere of Economics proper. ”

“ Let it practice true and conscientious economy, not only in the expenditure and application of public moneys, but also in the method of levying them, so as to be equally just to all classes and all economical interests. ”

“ You will also have some interest money. But you will have much more, namely, the habit of saving—systematic economy, which is an education of itself, and one which, if necessary to gain, you could well afford to throw away the $119 that you saved. ”

“ We may even conceive a people whose habits were such, that in order to induce them to lend, it might be necessary to offer them a rate of interest fully equal to the ordinary rate of profit. In that case, of course, the productive classes would scarcely ever borrow. ”

“ The present high cost of living raises questions in the theory of the economic aspect of life that have compelled the attention of the public. The theory of money, interest, savings, foreign investments, the place of gold in the world's economy is carried a step further and is popularly more extended. ”

“ Therefore, not all things which have an exchange value are wealth, in the only sense in which the term can be used in Political Economy. Only such things can be wealth the production of which increases and the destruction of which decreases the aggregate of wealth. ”

“ THAT THE ABATEMENT OF INTEREST IS THE CAUSE OF THE PROSPERITY AND RICHES OF ANY NATION, and that the bringing down of Interest in this Kingdome, from six to four, or three per cent will necessarily, in less than twenty Years time, double the Capital Sock of the Nation. ”

“ Eliminating from interest the element of insurance, and regarding only interest proper, or the return for the use of capital, is it not a general truth that interest is high where and when wages are high, and low where and when wages are low? ”

“ Any analysis will show that much of the profits which are, in common thought, confounded with interest are in reality due, not to the power of capital, but to the power of concentrated capital, or of concentrated capital194 acting upon bad social adjustments. ”

“ Interest is determined by the equation between the demands of borrowers and the supply of capital offered by lenders. Or, if we take what is given as the law of profits, it is determined by wages, falling as wages rise and rising as wages fall—or, to use the phrase of Mill, by the cost of labor to the capitalist. ”

“ Since custom stands its ground against competition to so considerable an extent, even where, from the multitude of competitors and the general energy in the pursuit of gain, the spirit of competition is strongest, we may be sure that this is much more the case where people are content with smaller gains, and estimate their pecuniary interest at a lower rate when balanced against their ease or their pleasure. ”

“ Uses of interest.—In closing the subject of interest, it is well to recall the fact that interest exists in the very nature of productive energies, and that ability to transfer the use of property in any form of capital without transferring the interest is most useful to society. It sustains the aged, who must otherwise be wholly dependent, and the childhood of the race in all development of body, mind and soul. Interest sustains the mass of educational and charitable institutions, as well as the individual life of multitudes whose present earnings could not keep body and soul together. ”

“ Of the net profits of persons in business, a part, as before observed, may be considered as interest on capital, and of a perpetual character, and the remaining part as remuneration for the skill and labour of superintendence. ”

“ The economic interest, our desire and esteem for solid and matter-of-fact things like market commodities and standardized market services, has been conceived as nothing visionary and speculative, as no peering into the infinite or outreaching of an inexpressible discontent, but an intelligent, clear-eyed grasping and holding of known satisfactions for measured and acknowledged desires. ”

“ Even if we put aside all questions which involve a consideration of the effects of industrial institutions in modifying the habits and character of the classes of the community, ... that enough still remains to constitute a separate science, the mere enumeration of the chief terms of economics—wealth, value, exchange, credit, money, capital, and commodity—will suffice to show. ”

“ The undying body in which the particular things are tissues absolutely needs to come into view. The very mention of a problem of interest—of the percentage of itself that a fund of a given amount can annually earn—puts before us at once the permanent entity, capital, and the problems relating to it. ”

“ Whether arts and vertue are not likely to thrive, where money is made a means to industry? But whether money without this would be a blessing to any people?
286. Qu. Whether therefore Mississippi, South Sea, and such like schemes were not calculated for pubic ruin?
287. Qu. Whether keeping cash at home, or sending it abroad, just as it most serves to promote industry, be not the real interest of every nation?
288. Qu. Whether commodities of all kinds do not naturally flow where there is the greatest demand? Whether the greatest demand for a thing be not where it is of most use? ”

“ Nay, though capable of conceiving the idea of intrinsic value with respect to beasts of burden, no economist has endeavoured to state the general principles of National Economy, even with regard to the horse or the ass. ”

“ Economy no more means saving money than it means spending money. It means, the administration of a house; its stewardship; spending or saving, that is, whether money or time, or anything else, to the best possible advantage. In the simplest and clearest definition of it, economy, whether public or private, means the wise management of labour; and it means this mainly in three senses: namely, first, applying your labour rationally; secondly, preserving its produce carefully; lastly, distributing its produce seasonably. ”

“ We have surveyed the field of economical facts, and have examined how they stand related to one another as causes and effects; what circumstances determine the amount of production, of employment for labour, of capital and population; what laws regulate rent, profits, and wages; under what conditions and in what proportions commodities are interchanged between individuals and between countries. We have thus obtained a collective view of the economical phenomena of society, considered as existing simultaneously. ”

“ Thus, neither in its common meaning nor in the meaning expressly assigned to it in the current political economy, can profits have any place in the discussion of the distribution of wealth between the three factors of production. Either in its common meaning or in the meaning expressly assigned to it, to talk about the distribution of wealth into rent, wages, and profits is like talking of the division of mankind into men, women, and human beings. ”

“ The stability of trade, the money value of every description of vested interests, in fact, the industrial, commercial, and financial welfare of the country, all are directly involved in the rapid manipulation of such vast sums. ”

“ We must examine the nature of Capital with care, and follow its varied forms without confusion, because it is the only other factor besides labor in the production of commodities, that has to be paid for out of their sale. ”

“ The distribution of provisions, money, and merchandise in just proportions, according to times and places, is the true secret of finance and the source of wealth, provided those who administer it have foresight enough to suffer a present apparent loss, in order really to obtain immense profits in the future. ”

“ This comparison naturally can only be essentially materialistic, hence, for the economist all pleasure enters into the field of material satisfaction, that is, of political economy. Thus all the other social facts, from law to morals, come to have an economic basis. ”

“ The works of the great economists on value, capital, supply and demand, wages, taxes, machinery, farm-rent, increase of population, over-accumulation of products, markets, banks, monopolies, etc., seem to have set the limit of dogmatic researches, and form a body of doctrine beyond which there is little to hope. ”

“ My countrymen, it is not alone the volume of money which the people want, but they demand its activity in trade and commerce. If you ask me how this can best be accomplished, I will answer by saying, protect American industries and universal confidence will surely follow. ”

“ This means wealth not alone in mere terms of money but in the economic sense of everything that is of use for the support or enjoyment of mankind. Of course "production and distribution" means the manufacture and transportation of all forms of this economic wealth. ”

“ It is true that in the preceding Books we have not escaped the necessity of anticipating some small portion of the theory of Value, especially as to the value of labour and of land. It is nevertheless evident, that of the two great departments of Political Economy, the production of wealth and its distribution, the consideration of Value has to do with the latter alone ”

“ There is much in favour of the third definition, that which defines Political Economy as the art which teaches what production, distribution, accumulation, and consumption of wealth is most conducive to the happiness of mankind, and what are the habits and institutions most favourable to that production, distribution, accumulation, and consumption.
It raises the political economist to a commanding eminence. The most extensive, though perhaps not the most important, portion of human nature, lies within his horizon. ”

“ Political economy requires farther expansion in order to include all the elements of this great social problem.
It is a true doctrine that demand and supply regulate the price of all things, labour included. ”

“ In the first place, then, this view of things greatly weakens, in a wealthy and industrious country, the force of the economical argument against the expenditure of public money for really valuable, even though industriously unproductive, purposes. ”

“ The pecuniary activities of men, efforts directed to acquisition and operations incident to the acquisition or tenure of wealth, are treated as incidental to the distribution to each of his particular proportion in the production of goods. Pecuniary activities, in short, are handled as incidental features of the process of social production and consumption, as details incident to the method whereby the social interests are served, instead of being dealt with as the controlling factor about which the modern economic process turns. ”