ral analysis of price or exchange value.

It is of some interest to observe that the difficulties which our
world socialist commonwealth would encounter if it attempted to
dispense with the rate of interest, would not necessarily include that
of obtaining a supply of capital. It might, indeed, not find it easy
to determine the proportions in which it should allocate its
productive resources between immediate and distant ends. Our present
system cannot be said to have evolved satisfactory principles for the
solution of this question; and the socialist commonwealth would have
to work out its own solution. But when it directed that labor and
materials should be devoted to purposes of long-period utility, there
would be an automatic collective saving, of which no one would be
conscious as an individual sacrifice. Even at the present time, our
capital is not supplied entirely by the savings of individuals, but to
an extent, which though quite incalculable is yet certainly
considerable, by involuntary saving of an essentially similar type to
the above.

Sec.9. _Involuntary Saving_. When a municipality embarks on a municipal
tramways scheme or any other industrial enterprise, and pays off by
means of a sinking-fund the capital which it borrows in the first
instance, the proceeding amounts, as the defenders of municipal
trading have rightly claimed, to a compulsory and unconscious saving
on the part of the citizens. Their consumption has been postponed
willy-nilly as the result of the increased rates or the high charges
which they have had to pay; and, when the subscribers to the original
loan have been paid off, the capital of the community is enhanced to
the extent of that loan. Central governments might similarly increase
the supply of capital by devoting annual revenue to capital purposes;
though their actual record, as it happens, is mainly of a different
kind. But what is chiefly a possibility in the case of Governments has
actually been carried out on an enormous scale by other institutions.
The development of the joint-stock company system has introduced a new
factor into the problem of the supply of capital, which is of immense
though but dimly perceived importance. The directors of a company are
technically no more than the servants of the shareholders. It is the
profit of the shareholders that it is the directors' duty to promote
with a single mind, and the whole capital of the concern, including
its reserves bot