““In general,” Herr Dühring sermonises us, “the estimate of most of Hume’s commentators has been very prejudiced, and ideas have been attributed to him which he never entertained in the least”.
Herr Dühring himself gives us more than one striking example of this “procedure”.
For example, Hume’s essay on interest begins with the following words:
“Nothing is esteemed a more certain sign of the flourishing condition of any nation than the lowness of interest: and with reason; though I believe the cause is somewhat different from what is commonly apprehended.”.” (p 306)
As Marx sets out in Capital III, no such mechanical correlation can be adduced. The lowest rate of interest arises at that point of the cycle following the period of crisis. At that point, the rate of profit rises sharply, due to rises in productivity brought about by a technological revolution. There is, then, a large rise in the mass of realised profit, relative to the demand for money-capital. Such periods are characterised by slower growth and stagnation, and the low rate of interest encourages speculation in assets, rather than investment in real capital accumulation. Similarly, when economies are booming, the demand for money-capital rises relative to its supply, because, in such periods, the rate of profit is squeezed. The rate of interest rises to its highest point when this same process leads to crisis.
What can be said is that societies that had a long period of capital accumulation tend to have lower rates of interest. That is because, as Marx describes, they have, thereby, a larger pool of amassed savings. Many of those who were were formerly industrial capitalists – as with Engels – having retired, take their money-capital with them, and it forms a relatively growing pool that can be thrown in to the money market in addition to the constant flow of additional money-capital from realised profits.
The idea, put forward by Hume, as a commonplace, had, in fact, been put forward a century earlier, by Child. Hume never claimed to have originated this idea, and yet, Duhring says,
“Among the views (of Hume) “on the rate of interest we must mainly stress the idea that it is the true barometer of conditions” (which?) “and that its lowness is an almost infallible sign of the prosperity of a nation”. (p 306)
Engels notes,
“We have seen how Hume confuses every increase of the precious metals with such an increase as is accompanied by a depreciation, a revolution in their own value, hence, in the measure of value of commodities. This confusion was inevitable in Hume because he had not the slightest insight into the function of the precious metals as the measure of value. It was impossible for him to have it because he had absolutely no knowledge of value itself. The very word is to be found perhaps only once in his essays, in the passage where, in attempting to “correct” Locke's erroneous notion that the precious metals had “only an imaginary value”, he makes matters even worse by saying that they had “chiefly a fictitious value”.” (p 306-7)
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