neither sympathy nor apology. He is not referring to the lapse of time as a factor, but as an outrage to capital which can only be wiped out by the indemnity of interest.
His example of the sewing machine shows that with the aid of this implement the tailor can make one coat in one day, but without it he can only make one coat in three days. The “loss” of time in this example is based on the fact that it took “considerably longer than three days” to make the sewing machine!
If time has any virtue as a mathematical factor in this example, it is obvious that when the machine has made 1000 coats there is a saving of two days per coat, or nearly six years. Böhm-Bawerk anticipated such an objection by saying it would not be relevant in resisting his claim that there is any “sacrifice” of time involved. It may not be respectful, but it is relevant. What the engineer sees clearly is that there is made possible a most profitable facilitation of effort, and interest, therefore, is quite naturally offered for these facilities by competitive bidders who wish to seize such an opportunity.
Jevons also sees the significance of time, and states, “I would say then, in the most general manner, that whatsoever improvements in the supply of commodities lengthen the average interval between the moment when labor is exerted and its ultimate result or purpose accomplished, such improvements depend upon the use of capital.”[1]
As with Böhm-Bawerk, he sees the significance of time, but also unfortunately expresses it as though there were greater expenditure of time than gain. It may be regarded as a greater expenditure of time per cycle of operation; but it is so clearly a less expenditure per unit produced that to speak of lengthening instead of shortening is quite misleading. A simpler statement of the same thing would give a much greater significance to the importance of time as a factor, namely, any extended cycle of operation designed to utilize current effort to the full requires capital; in short, that to make current value per hour most effective we must employ every facility.
Jevons, however, without question, has cleared the path for
- ↑ “Theory of Political Economy,” W. S. Jevons. 4th edition, 1911, page 239. Macmillan, London.
