of Professor Leone Levi, with whom I corresponded on these matters, I drew the conclusion that the sum thus counted twice over was about _one hundred million pounds_ annually ten years ago. This would knock off twenty per cent at once from Mr. Shaw’s _five hundred million pounds_; and I may again mention Mr. Giffen’s emphatic warning that, if we are thinking of any general redistribution, another _two hundred million pounds_ would have to be deducted from the sums which persons like Mr. Shaw imagine await their seizure. [63] The case may also be put in another way. Interest is the product of capital _quâ_ capital, as opposed to the product of ability as distinct from capital. But the bulk of modern capital is historically the creation of ability, which has miraculously multiplied the few loaves and fishes existing at the close of the last century. Interest may therefore be called the secondary or indirect product of ability, whilst earnings and profits may be called the direct product of ability. Any one who is living on interest at the present moment is almost sure to be living, not on his own ability, but on the products of the ability of some member of his own family who has added to the national wealth within the past two generations. Suppose a man who died in 1830 left a fortune of _two hundred thousand pounds_, which he made, as Salt did, by the invention and production of some new textile fabric; and suppose that this fortune is now in the hands of a foolish and feeble grandson, who enjoys _eight thousand pounds_ a year. This is evidently not the product of the grandson’s ability; but it is the product of the ability of the grandfather. The truth of this may be easily seen by altering the supposition thus—by supposing that the original maker of the fortune, instead of dying in 1830, is alive now, but as imbecile as we supposed his grandson to be. He has, we will say, long retired from business, and lives on the interest of the capital he made when his faculties were in their vigour. Would any one say that he is not living on his own ability? The only difference is—and it is a difference which, from many points of view, is of the greatest importance—that formerly he was living on the direct product of his ability, and he is now living on its indirect product. THE END _Printed by_ R. & R. CLARK, _Edinburgh_. ——————————————————————————————————————————————————————— PRINCIPLES OF POLITICAL ECONOMY By J. SHIELD NICHOLSON, M.A., D.Sc. PROFESSOR OF POLITICAL ECONOMY IN THE UNIVERSITY OF EDINBURGH, SOME TIME EXAMINER IN THE UNIVERSITIES OF CAMBRIDGE, LONDON, AND VICTORIA In 2 Vols. demy 8vo. Vol. I. price 15s. _ALSO BY THE SAME AUTHOR_