If James did not lend the plane to William, he could only get his gain of a plank by working with it himself, and wearing it out himself. When he had worn it out at the end of the year, he would, therefore, have to make another for himself. William, working with it instead, gets the advantage instead, which he must, therefore, pay James his plank for; and return to James, what James would, if he had not lent his plane, then have had—not a new plane—but the worn-out one, James must make a new one for himself, as he would have had to do if no William had existed; and if William likes to borrow it again for another plank—all is fair.
That is to say, clearing the story of its nonsense, that James makes a plane annually, and sells it to William for its proper price, which, in kind, is a new plank. But this arrangement has nothing whatever to do with principal or with interest. There are, indeed, many very subtle conditions involved in any sale; one among which is the value of ideas; I will explain that value to you in the course of time; (the article is not one which modern political economists have any familiarity with dealings in;) and I will tell you somewhat also of the real nature of interest; but if you will only get, for the present, a quite clear idea of “the Position of William,” it is all I want of you.
I remain, your faithful friend,
[1] Communicated to me by my friend Mr. Rawdon Brown, of Venice, from his yet unpublished work, ‘The English in Italy in the 14th Century.’ [↑]
FORS CLAVIGERA.
LETTER II.
Denmark Hill,
1st February, 1871.