Ely starts very cautiously by stating, “It has been customary to speak of three factors of production—Nature, Labor and Capital.”
He does not protest strongly against this ill-assorted group of factors which include infinity in the guise of Nature, except to point out soundly that “Capital cannot be looked on as an independent factor of production since it is derived from the labor of man applied to nature.” From this point on he examines with great care and with great lucidity a long series of consequences which arise from the interactions of labor and capital within the infinite theater of nature. When he arrives at the examination of interest he comes within a hair’s breadth of putting forward the simple factors of dynamic human energy, stating, “so the ultimate factors in production may be said to be land, labor and waiting.”[1]
How can waiting be measured except by time? It is as though he stated the truth under an opiate without perception of its dynamic significance; for it goes without saying that if waiting were a factor of production, most of us would be very rich. It is not waiting he means; for such waiting is simply the apparent loss of time involved in the maneuver of calling forward the reinforcement of capital with a view to subsequent haste or saving of time.
The pressure of population upon area enhances the importance of time as a factor in a closely organized community; and it is in the examination of the phenomenon of interest that the economists come closest to comprehending the vital significance of time.
The consideration of interest forces us to recognize the factor of time, and it is in the investigation of interest—the effort bid per hour for the jeopardized freedom of others—that we shall later come across a group of dazed but courageous economists holding the factor of time at arm’s length as bachelor uncles bravely but awkwardly handle a baby, not actually denying its legitimacy, but very puzzled as to its uses.
Böhm-Bawerk, in spite of his keen interest in Time, em-
- ↑ “Outlines of Economics,” Richard T. Ely. 3rd edition, 1918, pp. 119, 121, 552. The Macmillan Co., New York.
