13-5b2b Because of money, the rate of return will tend to be uniform throughout the length and breadth of the production structure

“Since money is the general medium of exchange and can be invested in all products, this close competition extends throughout the length and breadth of the production structure. It is the “social rate of time preference.” It is the “price of time” on the market as the resultant of all the individual valuations of that good.”

“Not only must the interest rate be uniform for each good; it must be uniform for every stage of every good. In the real world of uncertainty, the tendency of entrepreneurial actions is always in the direction of establishing a uniform rate of interest throughout all time markets in the economy.”

“The rate of interest will tend to be equalized for all areas of the economy, as it were in three dimensions—“horizontally” in every process of production, “vertically” at every stage of production, and “in depth,” in the consumer loan market as well as in the production structure.” (p. 420)

Next:

• 13-5b2c There is no time inconsistency in the evenly rotating economy (ERE)

Related:

• 3-1a4b7 The monetary account will increasingly explain the world—especially as it pertains to the human actions—though never exhaustively
• Related in the sense that each claim only applies necessarily in the evenly rotating economy (ERE), but not in reality:
  • 13-5d2 Interest is not the reward of capital goods per se—it is derived from the generalized investment of time
• One reason why the claim here doesn’t necessarily apply in reality is to do with the fact that knowledge necessarily starts off locally and with parochialism—along with the fact that we cannot know if two minds hold precisely the same idea:revisit
  • 1-1a2a There is no human nature if by this we mean a kind of a priori knowledge common to all and only to humans
  • 1-1a2d An innate capacity to learn ≠ Specific (‘parochial’) knowledge
  • 9-1b1a It almost never happens that two minds hold precisely the same idea
  • 9-2b3e Everett on John Locke - His tabula rasa didn’t mean there were no innate abilities, but that there were no innate specific concepts (innate capacities ≠ innate knowledge)
  • 10-2g1f3 We can only figure out what they know by what they do (‘performance’), because we can never directly study what people know (‘competence’). To assert that we can is a common error in thinking.
  • 13-1a3a2a The difference is implied in any exchange and division of labor

ERE