V. The Nature of the Capital Problem

2 "Free" as opposed to slave labour. 3 This part of pure economic theory is sometimes referred to as the theory of kapitallo88 Wirtschaft. 50 CR. V The Nature of the Oapital Problem 51 tinue indefinitely to render useful services without any deliberate provision for their upkeep or replacement; they cannot therefore be regarded as "permanent" or "self-perpetuating".1 This is not only Act ually most protrue of practically all those bearers of use-ducllve resources are ful serVl' ces hich h e bee created by of limited durability W av n man in the past, and can rarely, if ever, be expected to last indefinitely or to remain permanently useful. It applies 2 to all the capacities acquired by human beings through education and training, and also to the greater part of the natural resources. Some of the latter, such as the fertility of the soil, can only be expected to endure permanently if we take care to preserve them. Others, such as mineral deposits, are inevitably exhausted by their use and cannot possibly render the same services for ever.

This distinction between permanent and non-per manent (or" consumable" 3) resources is of fundamental importance for the approach to the capital problem that will be followed in this study. It is not, Permanent and n~n however, a distinction which is in all cases permanent resources unambiguous. The main point to be kept in mind is that what matters is not permanency in any absolute sense, but the opinion of the economic subject as to whether par ticular resources at his command will last throughout the 1 Cf. Wicksell, Lectures, vol. i, p. 150. 2 At least from a social point of view: the individual can hardly use up his knowledge and training before he ceases to be interested in its usefulness (except possibly by overwork). It comes to the same thing when Professor Knight (1936, p. 641) makes the capital quality of human capacities dependent on their" presenting any possibility of delibera te over· or under·maintenance ".

3 It is unfortunate that in English the term "consumable" refers so definitely to final consumption that it can hardly be used, without danger of misunderstanding, to include things used up in production. If this were not the case it might be preferable to "non· permanent " in this connection, and Wa~ (ltUment8, edition definitive, 1926, p. 246) uses "consommables" as one of the essential characteristics of the "capitaux proprement dits", although he adds that they must also be " produits ".

52 Introductory PT. J period in which he is interested (be it his lifetime or a longer peri~d), or whether they will be exhausted or used up earlier than this. In this sense his own person may be regarded as a permanent resource if he is not interested in what will happen after his death. It could of course be argued with some plausibility that, strictly speaking, all resources are nonpermanent. But this would only mean that our distinction is merely a distinction of degree, and would by no means deprive it of its significance. What may be regarded as an even more fundamental basis for the distinction is the fact that the future services of some resources cannot be anticipated, as they will con tinue to give the same services in the future no matter how they are used in the present, while the present use of the services of other resources decreases the amount of such services which will be available in the future. This is not affected by the objection that no rigid line can be drawn between permanent and non permanent resources. The underlying fact, and in a sense the most general aspect of the phenomenon under consideration, is the irreversability of time which puts the future services of certain resources beyond our reach in the present and so makes it impossible to anticipate their use, whereas the present services of those resources can as a rule be postponed. 1 1 An aIt~rnate concept which is probably better but clumsier than the concept of permanent resources is the concept of non-anticipatable returns, i.e. those final services which would still be available at any future date even if up to that date their consumption had been kept at the maximum level attainable at every moment without regard to the future. In order that a resource may be permanent in this sense it is not essential for it to be indestructible in a physical sense. All that is necessary is that it should be expected to be useful, not in consequence of being kept in that state at a sacrifice, but because no present advantage would arise from destroying its future usefulness.

It is evident that certain resources may have to be treated as permanent in this sense, because their exp~ted future services cannot be sacrificed in order to increase satisfaction in an earlier period, but will have to be treated as nonpermanent in the other sense because their services, once they become available, are non-recurrent. In cases 'Phe Nature of the Capital Problem 53 The nOll-permanent nature of all "wasting assets" create;-, ~ problem which is not dealt with in the theory of timeless production. These assets cannot be directly used to contribute to the output of the The central problem time when they have ceased to exist. In bow tb. exl.ten •• of so far as their existence does help to main tain output permanently above the level at which it could be kept with the help of nonpermanent re sour... increas.. the permanent In.ome stream the permanent resources alone, it must do so in an indirect manner. lfthe fact that we have command over resources which remain useful only for a limited period of time did not help UR to use the services of the permanent resources more effeotively, it would be quite impossible to keep our income permanently above the level where it would stay if these nen-permanent resources had never been avail able.;7e might stretch their use over a longer period of time, bat ultimately we should inevitably exhaust them like tll!~S~ the significance of what we have called the irreversability of time, t.e. the fact that we can postpone but not anticipate the use of certain resources, becomes particularly clear. The range of time during which any force of nature can be turned to useful purposes has, as it were, always a definite beginning but frequently no necessary end.

It should be clear from these considerations that it would be equally misleading to gloss over this distinction by treating all resources as non-p&manent, as it is to treat all resources as permanent. It· is the existence of differences between the resources in this respect, and not the E'xistence of extreme types, that is relevant. Whether there are no really permanent resources in this sense, as is sometimes suggested, is open to doubt. When we remember that the relevant fact is not indestructibility in a physical sense but the lack of any inducement to destroy, there can be little doubt that, apart from the human beings themselves, not only a number of forces such as water-power but also quite a considerable part of the productive power of the soil must be regarded as permanent. A great deal of land (pastures) retains its fertility, not because provision is made to keep it fertile, nor despite its being used for current needs, but just because it is being used each year in such a way as to give the greatest possible service in that year. If anyone wanted seriously to deny (as I understand Mr. Kaldor does) that there are such things as permanent resources, he would have to assert that it is conceivable that by raising the rate of consumption (or rate of output) to the highest level obtainable in the near future, the productive capacity of the more distant future could be reduced to zero.

54 Introductory PT. I and should then have to be content with what services the permanent resources could render by themselves. It is this problem of why the existence of a stock of non permanent resources enables us to maintain production permanently at a higher level than would be possible with out them, which is the peculiar problem connected with what we call capital. l The term capital itself, in so far as it is required to describe a particular part of the productive resources, will accordingly be used here to designate the aggregate Capital as the aggre gate of aU non permanent resources of those nonpermanent resources which can be used only in this indirect manner to contribute to the permanent maintenance of the income at a particular leve1.2 It should be specially 1 Cf. F. von Wieser, Natural Value (1893), p. 124: "On the other hand, it is a matter for wonder to find that the perishable powers of the soil, and all the movable means of production, raw materials, auxiliary materials, implements, tools, machinery, buildings, and ot,her pro.

ductive apparatus and plant, which are consumed, quickly or slowly, in the service of production, are sources of permanent returns, returns which are constantly renewed, although the first factors of their production may have been long before used up. This brings UB face to face with one of the most important and difficult problems of economic theory; with the question, namely, how we are to explain the fact that capital yields a net return." In a footnote to this passage Wieser adds that" in what follows I understand by the tum capital the perishable or (with the extended meaning explained in the text) the movable means of production". A similar passage occurs in K. Wicksell, Wert, Kapital und Rente (1893), p. 73: "Dass nun aber die verbrauchbaren Guter, d. h. Gitter, die in einer begrenzten Reihe von Verbrauchsakten ihren ganzen Nutzgehalt zu ersch6pfen scheinen, dennoch ' kapitalistisch ' angewandt werden k6nnen, so dass ihr ganzer Wert dem Eigentumer aufbewahrt bleibt und sie ihm dennoch Ein· kommen schaffen, diese scheinbar paradoxe Erscheinung, dieses per.

petuum mobile des Volkswirtschaftsmechanismus bildet, wie fruher gesagt, den eigenUichen Kern der Kapitaltheorie ". 2 This definition of capital is far less revolutionary than may at first appear. The first move in this direction was made by Ricardo when he decided to include "permanent improvements" with the " original and indestructible powers of the s'oil " because, " when once made, the return obtained will ever after he wholly of the nature of rent and will be subject to all the variations of rent", differing in this from the" perishable improvements" which" require to be constantly renewed and therefore do not obtain for the landlord any permanent CH.V The Nature of the Capital Problem 55 noted, however, that the important point is not whether it is expedient to use the term capital for this purpose; on this reasonable people may differ, although they will scarcely find it worth while to argue about it. The addition to his rent" (Principles, chap. xviii; Works, ed. McCulloch, p. 158, note); and wh\iln for similar reasons he excluded from rent proper " the compensation given for the mine or quarry" (Principles, chap. ii ; Works, p. 35). Cf. also J. S. Mill, Principles of Political Economy, ed. Ashley, Part I, chap. vi, p. 93: "But as the capital ... cannot be withdrawn, its productivity is thenceforth indissolubly blended with that arising from the original qualities of the soil, and the remuneration for the use of it thenceforth depends, not upon the laws which govern the roturns to labour and capital, but on those which govern the recom.

pense for natural agents ". The definition adopted here is essentially the same as Wicksell's, and Wicksell in turn seems to be indebted to 'Vieser for it. Cf. Wick. sell, Wert, Kapital und Rente (1892), pp. 72·73: "Der wichtigste volks. \', .• ,tschaftliche Unterschied zwischen dem Grund und Boden und den produzierten Sachgiitern scheint namlich darin zu liegen, dass ersterer seine Nutzleistungen nur successive in einer vorher bestimmten und unveranderlichen zeitlichen Reihenfolge, dafiir aber auch in einer unend· lichen Reihenfolge abgiebt, wogegen die produzierten Giiter nur eine endliche Summe von Nutzleistungen, diese aber beinahe in beliebiger Reihenfolge abgeben kennen ... ; man kann sagen, dass die Produktions· werkzeuge um so mehr einen kapitalistischen Charakter (im engeren Sinne) bewahren, als sie nach Belieben verwendet werden kennen, z. B. die Maschinen, welche in schnelleren oder langsameren Lauf versetzt werden oder auch still stehen kennen, dabei aber keine Abniit· zung erfahren. Andere Vorrichtungen im Gegenteil, z. B. gewisse Bodenmeliorationen, sind, einmal angestellt, so ganz und gar mit dem Grund und Boden verwachsen, dass sie den erwahnten Charakter verlieren, d. h. nunmehr eigentlich Rentengiiter, nicht mehr Kapital· giiter im engeren Sinne sind"; and on p. 79 of the same book: "Fiir die folgenden Untersuchungen scheint es mir jedoch am zweckmassig.

sten, die verschiedenen Kapitalien einfach nach ihrer Dauerbarkeit zu rangieren. Die eminent dauerbaren Giiter, seien sie selbst Produkte oder, wie der fungfrauliche Boden, reine Naturalguter, und m6gen sie ihre Nutzleistungen spontan oder nur unter Zusetzung von menschlicher Arbeit abgeben, nenne ich im folgenden Rentenguter. Die verbrauch· baren oder schnell abgenutzten Produktions· oder Konsumtionsgiiter, solange letztere sich noch nicht in den Handen der KonsumE;lnten befinden, nenne ieh Kapitalguter oder Kapitalien im engeren Sinne." (Italics not in the original.) See also ibid. pp. 93·94, and the same author's Finanztheoretische Untersuchungen (1896), pp. 28 et seq., Geldzin8 und Giiterpreise, pp. 117.118, and Lectures, vol. i, pp. 186·187; and the passage from Wieser's Natural Value, quoted in the previous footnote, to which 'Vicksell refers in this connection.

56 Introductory PT. I essential point is that the existence of this kind of resources creates an important and peculiar problem which is different from and, we believe, of much greater significance than the problem of the kind of time-discount which would exist even in a society where all resources are permanent. It is this problem to which the present study is mainly devoted and it is for this purpose that we find it most useful to employ the term capital in the sense indicated. And at a later stage we shall attempt to show that it was this problem which originally gave rise to the conception of capital in ordinary business usage. 1 It is, however, not necessary that this definition should be interpreted and applied with too rigid adherence to the literal sense of the terms "permanent" and" non permanent". In fact, what in a particular situation will have to be regarded as capital will to some extent depend on the context in which we use the concept. Perhaps it would even be better to attempt a general definition of capital only in the negative form of saying that the only things which never will have to be regarded as capital are the really permanent resources in the strictest sense of the term. In the case of all resources which are not strictly permanent the decision whether we have to treat them as capital or not will depend on whether or not they can be used up (or used up more quickly) during the period of time relevant for the problem in question. 2 Certain kinds of goods, particularly those which are commonly referred to as circulating capital, can be used up even during very short periods and will therefore have to be treated as capital in practically all contexts (this is the reason why circulating capital shows the peculiar characteristics of capital in a particularly high degree, while with respect to others the problem of the gradual exhaustion and the 1 See below, Chapter VII, p. 89.

2 Cf. Wicksell, Lecture8, vol. i, p. 186: "If, therefore, our analysis is only applicable within a fairly short period, then, strictly speaking, only short.period capital (in other words, circulating capital) can be regarded as capital proper".

CH.V The Nature of the Capital Problem 57 need for replacement will arise only when the period relevant to the problem in hand is much longer.} The final justification of any particular definition of the term capital can of course come only from its use as a tool of analysis. At this stage we do not propose to dwell much longer on the definition; we want Relation of this to only specially to emphasise its comprehen-other capital concepts sive character. Included under this term are not only the man-made productive equipment in so far as it is not expected to remain useful for ever but also natural resources in so far as they are " wasting assets ", and all consumers' goods existing at the moment in so far as they are nonpermanent sources of final income. But although this concept is related to the familiar concept of the "produced means of production", it is not identical with it. It does not necessarily include all the produced means of production, since it is at least conceivable, although not very probable, that some of the produced means of production may be expected, once they have been created, to remain useful for ever; 1 and in this case they would not be capital in our definition of the term. 2 1 It may sound curious that we reckon, e.g., houses as capital only if and in so far as they are nonpermanent. There can of course be no doubt that we would be better off if houses, once they are built, lasted for ever, and the fact that they need replacement is clearly a disadvantage. Yet it is this fact, that we have to replace them by something if we want to keep our income stream at a given level, and that we can use the amortisation quotas earned on houses in the same way as the amortisation quotas earned on any other capital good to replace these capital goods by whatever form of new investment appears most advantageous at the moment, which gives all the capital goods a common attribute, that of being the source of the" fund" which makes current investment possible - and necessary.

2 Cf. Wicksell, Lectures, vol. i, p. 186: "Such improvements to the land often leave a permanent residual benefit. This happens, for example, in the case of· major blasting operations to secure wat.er in mountain regions, the building of roads, protective afforestation, etc. Thus new qualities which, once acquired, the land retains for all posterity, cannot be distinguished either physically or economically from the original powers of the soil; in the future they are to be regarded not as capital, but as land. . . . It may be further pointed out that nearly aU the long-term capital investments, nearly all 58 I ntrod'uctory PT. I Nor is it identical with the wider concept which identifies capital with the total stock of wealth,! for it excludes the sources of really permanent services. 2 so-called fixed capital (houses, buildings, durable machinery, etc.) are, economically speaking, on the border-line between capital in the strict sense, and land."

1 This latter definition of the concept of capital, which has been given wide currency through the writings of Professor Irving Fisher (and has also been used by Walras, although he singles out the con· sumable and produced capital as "capitaux proprement dits "), has the advantage of great logical clearness and of avoiding any distinction based on mere differences of degree. Its disadvantage for our purposes, however, is not only that it uses the term capital for a magnitude for which there are other terms (particularly" wealth ") available and in general use, but, what is more' important, that it severs all connection with the special problems which have given rise to the concept of capital and which, since they need close study, are most conveniently treated under that general heading. Where the definition of capital is entirely subservient to an explanation of interest, as has been the case with most of the traditional discus,sions, this definition may be usefully adopted. But where the peculiar problems arising out of production in time are the main subject of discussion, it would be a pity to have to invent a new term so long as the term capital is avail able for the purpose.

I It may be useful to summarise the relation between the various capital concepts and the categories of resources which they include, with the help of a schematic table: Kinds of Resources Non.producible (" original ") I Producible (" augmentable ") Permanent (Non-consumable) Nonpermanent (Consumable) I-~~~~~~+ ----~-a c b d '-------~~------------'---~ -------'--------Our definition includes the categories band d, while the more familiar definition of capital as produced means of production (or as " augment able resources" in the revised form in which Mr. Kaldor has recently revived this definition - see 1937. p. 219) would include c and d. Professor Fis!1er's definition (and the wider capital concept used by Walras) would of course include all four groups, while Walras' narrower concept (the" capitaux proprement dits") would include d only. We shall later see (see Chapter VII, p. 90, below) that while of the things which exist at any moment only those belonging to the groups band d serve as capital, their existence enables us to " invest" by creating things belonging either to the group d or to the group c, thA laUer ceasing thereby, however, to be capital in our sense.

CH.V The Nature of the Oapital Problem 59 The first question to which we have to turn, then, is how the existence of a stock of nonpermanent resources enables us to maintain our income at a raised level for an indefinite period. The ans·w·er to this ques-The temporary sertion is .especially significant because it also vices of the nonI h f h permanent resources exp ains w ya great part 0 t ose resources, enable us to invest namely those which are" produced means the services of the permanent resources of production", ever came into existence. and thereby to InThe answer is of course that the non_crease their return permanent resources provide an income stream for a limited period; and that in consequence we are in a position to postpone the return from some of the current services of the permanent resources without reducing our consumption below the level at which it can be perma nently kept. We are thus able to take advantage of the celebrated productivity of the "roundabout methods"

of production 1 which have been the cause of so much misunderstanding. In other words, the existence of nonpermanent resources makes it at the same time possible and necessary to "invest" some of the current productive services, that is to use them in such a way that they will not yield consumable services until a later date than they might otherwise have done, but will then yield a larger amount of such services than they would have done at the earlier date. It is only because of this that the provision of an additional amount of services for a limited period in the future puts us in a position to raise for all time the return which we may hope to obtain from the meagre supply of really permanent resources. 1 This was not, of course, a new discovery of Bohm-Bawerk's, although he invented the term " roundabout methods of production" and brought out the role of time· in production much more clearly than anyone before him. The essential point was understood fairly well 'by most of the classical writers and it was particularly well formulated by N. W.

Senior in the third of his" Four Elementary Propositions of the Science of Political ·EcononlY ", viz. "That the powers of Labour, and the other instruments which produce wealth, may be indefinitely increased by using their Products as a means of further -Production" (Political Economy, 1836, 8vo edition, p. 26).

.t ~.' I But why should the more time-consuming methods of production yield a greater return? Ever since the time when it was first put forward this proposition has been Th f th the source of unending confusion, and it e causes 0 e ' productivity of In-has given rise to so many misunderstandvestment . lngs that, however much space one were prepared to give to the subject, it would scarcely be possible to deal with all of them. Nor is it certain that there is any single explanation that will necessarily fit all cases. There is, however, one general fact which makes it appear probable that it will always be pos sible to increase the amount of final services which can be obtained from given resources if more time is, allowed to elapse between the time when the resources are applied and the time when their final product emerges. And this is of course all that is required. This general fact is, briefly, that there will almost always exist potential but unused resources which could be made to yield a useful return, but only after some time and not immediately; and that the exploitation of such resources will usually require that other resources, which could yield a return immediately or in the near future, have to be used in order to make these other re sources yield any return at all. This simple fact fully suffices to explain why there will nearly always be possibilities of increasing the output obtained from the available resources by investing some of them for longer periods.

It has nev'er been asserted that every investment for a longer period will necessarily yield a larger product, although the critics have sometimes attacked the theory on these grounds. All that is important is Not all postponements of returns will cause that, so long as there are possibilities of them to Increase • • th d t b· t· c InCreasIng e pro uc y Inves Ing lor a longer period, only such prolongations of investment periods will be chosen as will actually give a greater product. The rather obvious reasons for this we shall consider later.

CH.V The Nature of the Capital Problem 61 The explanation of the greater productivity of some time-consuming methods of production is closely con nected with another question, namely: In what sense can it be said that the services of the per-S d f d carce an ree, use manent resources are given in a definite and latent services of t 't ~ It' t b . b resources quan 1 y. IS necessary 0 egln y considering the meaning of this assumption in detail. Of all the potential sources of satisfaction of human needs only comp'aratively few can be used directly. There are always an infinite number of natural forces which are capable of being turned to some human use, and which are in this sense potential or latent resources. And of those actually used only a part will be scarce, and will therefore be cOWlted as valuable assets on the use of which the satisfaction of human needs depends. What part of the total of the potential resources will actually be used, and what part will be scarce, will always depend on con crete circumstances and will vary with these circum stances. When we speak here of a constant stream of services from the permanent resources being available, what we have in mind is always the totality of such potential resources, irrespective of what part of them is actually being used at any particular moment or what part of them has become scarce. 1 It is only in this sense that they can be regarded as an extra-economic " datum ". What part of them will be used and what part will be scarce and therefore have value, will depend on human decisions which it is the task of economists to explain. In general, the teas on why resources which are capable of being turned to some useful purpose 1 The fact that with changing circumstances the amount of the services accruing from permanent resources that are scarce will vary instead of remaining constant, creates a serious difficulty which it will hardly be possible to take into account at all stages of the exposition without making it unduly complicated. During the earlier part of the analysis, which is devoted to a mere description of the technological interrelations, we shall in any case have to take it as a given fact that only a certain part of the potential resources is scarce and must there fore be taken into account, the free resources being neglected.

62 Introductory PT. I are not actually so used is that they would have to be combined with other resources which are more urgently needed elsewhere. So long as these other, complementary, resources cannot be spared because the total quantity of them available is required for purposes where they will yield a greater return than they would yield in co-opera tion with the potential resource in question, this resource will remain unused, or latent, and will not become scarce. This general phenomenon of complementarity between different productive resources becomes significant for our particular problem if the potential resources, which might Many potential resources remain un .. used because their exploitation would require the with drawal 01 other be used to produce useful services, will not yield these services until some time after they have been combined with other re sources which can be used to produce such resource. Irom cur-services immediately. It is of course by no rent use means a priori necessary that the product which will be obtained in this time-consuming way shall be greater than (i.e. that it will be preferable to) that which would have been obtained from the direct use of the complementary resources. All that we can say in general is that men will take the trouble to use the services of addi tional resources only if, as a result, the product not only becomes different but is also preferable to what it would otherwise have been. 1 But that it is technically possible does not mean that it will always be done. So long as the other resources, such as human labour, which are required to utilise' the potential resources, but which can also be used for the satisfaction of immediate current wants, cannot be spared, these potential resources will remain unused. And so long as they remain unused we can hardly regard them as separate resources since they 1 It is, perhaps, not unnecessary to.day to stress the fact that the goal of economic activity is not to use the greatest possible quantity of resources, but to produce the maximum of satisfaction, and that these two things are not identical.

CH.V The Nature of the Capital Problem 63 naturally remain free goods. Even when it has become possible to divert some of the other resources from the service of current needs to utilise the latent resources, it will be some time before the latter grow scarce. And although the increased product will be due to the fact that use is now being made of resources which it was impossible to use previously, we need pay no attention to this fact so long as these additional resources are free and not " economic" or scarce factors. From among the different latent resources some can be made to give a return after a short interval and some only after a long one. Under otherwise equal circumstances, those which yield a return The return from In sooner will be taken up first.l But among vestment has to be considered relatively the other circumstances which must be to the loss 01 current satisfaction and Ihe equal in order for this to be true is the size time we have 10 wall of the return which may be obtained by lor the return applying to them a certain amount of resources with drawn from use for current consumption. If in a par ticular instance the return obtainable from investing resources for a certain period is considerably greater than twice the return obtainable from investing the same resources for half t,hat period, the longer investment will evidently be taken up first. But the detailed con sideration of this question must be reserved for a later chapter.

For the moment another point is more important. At first what count as " investments" are only the services of those resources which might also have given an im mediate return. So long as they are the only resources which can be used at all, or fully used, it is only their 1 Suppose that there are two latent resources of which one can be made, by the application of labour, to yield a return after one year, and the other, with the same application, will yield a return of equal size only after two years. Then if we assume that both of these invest· ments will be repeated continuously, the return obtained during any stated period will always be greater from the first resource than from the second.

64 Introductory PT. I investment which leads to a reduction of current output. But as, in consequence of these earlier investments, the formerly latent resources, with which the other resources As more current re-are com bined, become first effective and 'Sources are Invested then gradually scarce, these too will besome of the formerly latent resources will gin to count, because some consumption also grow scarce and will be dependent on the particular use begin to count as Investments to which they are put. If they are then combined with some other potential resources which will not yield a consumable product until still later, this will represent an additional postponement of consumption. This fact that, as investment proceeds, more and more of those natural forces which before were only potential resources are utilised and gradually drawn into the circle of scarce goods, and have in turn themselves to be counted as investments, is of great importance for the under standing of the whole process. 1 We shall have to return to this question of the general function of capital in the process of production in the next chapter but one. But before we can do so it is necessary to consider somewhat more· concretely the various forms in which time enters into the process of production. This will have to be the task of the next chapter.

1 Cf. C. Menger, Grund8atze der Volk8wirtschaft8lehre (1st ed. 1871; reprinted London, 1934), pp. 129-130.