SOCIAL PROGRESS 255 



than a steadily increasing population, provided the quality and fre- 

 quency of exceptionality are not diminishing through an untoward 

 reproductive selection. 



How carefully should statesmen strive to prevent all hindrances to 

 the successful operation of this fundamental law of social progress 

 which is imbedded in the very nature of knowledge. With what fore- 

 thought should we strive to prevent the wastes of nations. To the 

 wastes of nations such as disease, ignorance, vice, crime, injustice, bad 

 government, lack of opportunity for the exceptional and war, must we 

 ascribe the hideous catastrophes which have wrecked successively one 

 nation after another. 



On account of the above law that there tends to be an annual in- 

 crease in capital value of the new arts, and varying with the square of 

 the population, we are led to the conclusion that herein lies the cause 

 of interest. In those fields where inventions are being made most 

 rapidly at any time, capital is needed. The savings in part effected 

 by the new arts are paid over for the use of the capital. The existence 

 of an interest rate which, eliminating the element of risk, probably 

 varies between two per cent, and eight per cent, is the shadow of this 

 law of progress which says in substance that the product of the annual 

 work of the exceptional men tends to vary as the square of the popu- 

 lation, and it follows that as population slowly increases, this surplus 

 fund comes into existence out of which interest is paid. The above, 

 then, seems to be the major cause of interest, and many known facts 

 are in harmony with this theory. Interest has increased historically in 

 times of rapid invention. It rules highest in industries where new 

 inventions are taking place most rapidly. Interest is higher in new 

 countries where population is rapidly increasing. Further, in the case 

 of nations retrograding through disease, vice, bad government and 

 decreasing population, commercial interest sinks to a very low figure. 

 The elaborate agio theories of interest seem to me to throw no light on 

 the cause of interest. A geometrical increase of wealth, which is so uni- 

 versal, must have an adequate cause. I am aware that there are very 

 many important considerations not touched upon in the foregoing, but 

 in a series of notes, this must of necessity be so. 



