Chapter 13

INTEREST AND ABSTRACT JUSTICE

The proposal to confiscate interest for the public benefit, on the ground that it is income unconnected with any corresponding effort.

Is the proposal practicable? Is it defensible on grounds of abstract justice?

The abstract moral argument plays a large part in the discussion.

It assumes that a man has a moral right to what he produces, interest being here contrasted with this, as a something which he does not produce.

Defects of this argument. It ignores the element of time. Some forms of effort are productive long after the effort itself has ceased.

For examples, royalties on an acted play. Such royalties herein typical of interest generally.

Industrial interest as a product of the forces of organic nature. Henry George's defence of interest as having this origin.

His argument true, but imperfect. His superficial criticism of Bastiat.

Nature works through machine-capital just as truly as it does in agriculture.

Machines are natural forces captured by men of genius, and set to work for the benefit of human beings.

Interest on machine-capital is part of an extra product which nature is made to yield by those men who are exceptionally capable of controlling her.

By capturing natural forces, one man of genius may add more to the wealth of the world in a year than an ordinary man could add to it in a hundred lifetimes.

The claim of any such man on the products of his genius is limited by a variety of circumstances; but, as a mere matter of abstract justice, the whole of it belongs to him.

Abstract justice, however, in a case like this, gives us no practical guidance, until we interpret it in connection with concrete facts, and translate the just into terms of the practicable.