Two people pass through the same year. One has lent a thousand pounds and receives forty for waiting; the other has spent his last pound on food and receives nothing. The difference cannot be that time passed more slowly for the lender. It lies in what he had the power to withhold. The defense of interest which follows the quarrel over usury begins here: the lender could have consumed his means, yet allowed someone else to use them, and the payment rewards his forbearance. There is something real in that account. A resource committed to tomorrow cannot serve every purpose today. But the passage from a use forgone to a sacrifice performed, and from a sacrifice to a claim upon another's product, crosses more ground than the word abstinence allows us to see.
Nassau Senior gave the postponement a place among the instruments of production. Labor and the powers of nature, he argued, could accomplish little if all their effort went into immediate results and all their produce was immediately consumed. Seed must be kept for sowing; an instrument must be made before its services can be enjoyed. Senior called abstinence the conduct of someone who withholds resources from unproductive use, or deliberately prefers a remote result to an immediate one. He wanted to identify the act behind capital, since the tool itself was already a product of labor, natural resources and a decision to wait. That decision might accompany labor: the person planting a tree works now for a distant harvest. In Senior's division, abstinence stood in the same relation to profit as labor stood to wages. The terminology made provision for the future into a distinct contribution, and gave the contributor an income to match.
The contribution begins with a constraint that survives the vocabulary chosen to describe it. The workers building a mill must eat before the mill grinds. The seed put in the ground is unavailable for today's bread. A society making provision for a later output must arrange its present uses so that the work can proceed. Yet a bank balance and a granary are different things. Transferring a claim to money does not by itself establish that additional machines were built, or that the full amount transferred measured an additional sacrifice of consumption. A loan may finance a new workshop; it may also buy an existing claim from someone who wishes to sell it. The abstinence argument identifies a requirement of production through time. Each particular payment still needs an account of the resources released, the alternatives displaced, and the activity financed.
The word becomes troublesome when postponement is made to sound like deprivation. A household putting aside the cost of a winter coat may feel the decision in every cold morning; an owner adding an unused surplus to a large portfolio may change nothing in his daily life. Both can abstain in Senior's technical sense, since both forgo an expenditure within their power. The hardship is plainly different. Marshall preferred waiting, a word that retained the delay without suggesting that the greatest fortunes were monuments to ascetic living. His distinction sharpens the question. An economic service may command a price even when its supplier finds it easy to provide. The ease of the provision neither abolishes the service nor converts its price into a measurement of pain.
An invented pair of loans makes the distinction visible. Suppose two people each lend £1,000 for one year on identical terms, with repayment certain and the interest fixed at four per cent. Each receives £40. One has forgone an important purchase; the other would have left the money unspent even at two per cent. The contract pays on the principal and the term, without asking how keenly either lender felt the loss of immediate command. The second person's willingness to lend for £20 does not disappear when the market offers £40. Nor does the first person's greater discomfort entitle him, under this contract, to a larger payment. A common price can induce the marginal supplier and reward other suppliers more than their own minimum would require. It cannot simultaneously be a personal certificate of every supplier's sacrifice.
The ability to wait is itself distributed before the price of waiting is agreed. Marshall begins his discussion of the sources of accumulation with the excess of income over necessary expenditure. The person with no such excess cannot turn admirable foresight into a financial advance. He also refuses to identify accumulation exclusively with the profits of capital: wages may sustain children, education and productive capacities which the narrow picture of a factory fund leaves out. This makes the social question larger than a comparison of bank accounts. A family may provide for the future through the health and learning of its children while acquiring few securities. Its contribution need never appear as interest-bearing wealth. Conversely, a fortune may earn interest because its owner controls transferable claims, even when the habits that first created those claims belonged to someone else.
A return can encourage saving without governing every saver in the same direction. Someone weighing an additional present pleasure against a future one may postpone more when the future reward rises. Someone trying to reach a fixed provision may need to postpone less. In a second invented example, a household wants exactly £1,000 a year from now and has a certain one-year saving opportunity. At five per cent it must set aside £952.38; at two per cent, £980.39. The lower rate requires about £28.01 more present saving to reach the same target. This calculation describes that objective, not a law of household behavior. Marshall recognized both the inducement to save and the exceptions created by fixed income aims. The supply of waiting therefore needs its motives, resources and circumstances specified; a rising line on a diagram cannot do that work by itself.
Waiting can even be wanted enough to command a charge. A person who has an income now and expects none in old age may value secure provision then more than an equal quantity now. If preservation is costly and trustworthy investment opportunities are scarce, accepting a smaller future amount can be sensible. Marshall expressly allows this possibility. It does not show that every saver will accept a negative return, any more than the fixed target shows that every saver responds perversely to a higher rate. It establishes the narrower point needed here: postponement does not carry a positive wage by definition. The terms depend on the uses open to present resources and the relative want for resources at different dates. A calendar supplies dates; it supplies no minimum remuneration.
Marx's objection begins one step before the owner decides to wait. A capitalist dividing a surplus between consumption and reinvestment already commands the surplus whose origin is in dispute. In Marx's account it derives from unpaid labor, and competitive pressure compels the capitalist to enlarge his capital if he is to preserve his position. Calling reinvestment abstinence describes a subsequent use of the product while leaving its acquisition unexplained. The criticism has force even as a question addressed to someone who rejects Marx's theory of value: what has been established about ownership by showing that an owner could have spent what he owns? The decision to leave a resource committed and the grounds of the claim to its return are separate matters. One cannot answer the second merely by dignifying the first.
The return measures the terms on which wealth is supplied; it cannot measure how hard its owner found it to wait.
Marshall's own analysis keeps the title to wealth apart from the decision to employ it. He says that, for the immediate inquiry, it makes no difference whether command over resources came from labor, inheritance, legitimate exchange or fraud. That is an analytical boundary with a moral consequence. The account can explain what someone who possesses a claim will require to release it without deciding whether he should possess it. The same boundary protects the useful part of the theory: questioning a distribution of ownership does not remove the practical need to allocate resources through time. A cooperative, a family or a public undertaking must also decide which uses to postpone and which projects to sustain. The existence of that task leaves its institutional arrangements open.
The defense of the saver is most useful when it asks what provision his action makes possible. Someone must arrange the interval between planting and harvest, and a prospective return may secure resources that would otherwise go elsewhere. That is a reason to examine the contribution carefully. It leaves questions about the size of the payment, the alternatives available to the supplier, and the division of the eventual product. The person who saves from necessity and the person who saves from abundance may both provide something useful; their sacrifices differ, their bargaining positions differ, and the market may pay them by the same schedule. To call every receipt an earned reward before these differences are considered is to ask a single word to perform the whole judgment.
The abstinence theory thus brings the volume from the legitimacy of lending to the conditions under which anyone is able to lend. Its enduring insight is the commitment of present means to a future result. Its temptation is to turn command over those means into evidence of a virtue, and the interest received into its measure. The poor may bear the greater deprivation while supplying no loan; the rich may supply the loan while bearing little deprivation. What reconciles their claims on present and future goods requires an account of both desire and opportunity. Fisher's Impatience takes up that account next. The saver may deserve payment for a contribution. To discover what contribution, and what payment, we must look beyond the fact that he waited.