Wages would express in terms of economic unity the market value of effort per hour .
Hire (as distinguished from rent or wages) would express in terms of economic unity the wasting value of capital goods per hour.
Capital, the stored product of effective effort, being subject to enhancement, duplication and depreciation, would prove to be as entirely remote from money as the contents of a reservoir are from the mass and rotation of the earth. Owing to the wasting nature of capital, in contrast to our insatiable desire of freedom and our unimpairable area, it would survive to occupy the political-economist when he desired to make use of his amazing law of diminishing returns.[1]
Interest, the economic phenomenon that has excited most controversy and yet is most simple, is an expression in terms of economic unity of the net value per hour of our freedom.[2]
Only by expressing economic phenomena in basic terms can be achieved the correlation of law demanded of a science by the scientist.
It is impossible to put forward the actual simplicities of economic value without a growing fear that they may be over-
- ↑ It would take too great a space to show the fallacies of this law. John Stuart Mill cites it and then cites further what he calls an antagonistic principle. A principle antagonistic to a law! (Chapter XII, “Principles of Political Economy.”) What Mill recognized dimly as an “antagonistic principle” was the significant effect of diminishing resistance. Other economists put forward dirigible balloons and ocean liners, and show proudly that velocity does not increase in direct proportion to power. Why should it? Velocity is only one dimension of dynamic value. If they put their projectiles nose to nose there would be no such velocity to diminish. If they put them in a vacuum there would be no diminishment of velocity. They are overlooking the fact that the medium is moving against the projectile just as fast as the projectile is moving against the medium. If effort does not result in motion it results in heat, which also is value. If human effort does not always result in “roly-poly, gammon and spinach,” then it results in education, which is even more valuable. There is no scientific law of diminishing returns, since force is as indestructible as matter. There are two homely truths that the political-economists have blended into a so-called law: first, that you cannot have your cake and eat it; and, second, that you cannot run your head advantageously into a brick wall; but these truths will not blend mathematically.
- ↑ See pages 300–3.
