less than the ninth did _when there were only nine in use_, and that
the ninth unit formerly produced less than the eighth did in that
still earlier stage of the process _in which there were only eight in
use, etc._ If the productive wealth of the United States were only
five hundred dollars per capita instead of more than twice that
amount, interest would be higher than it is, because the productive
power of every dollar's worth of capital would be more than the
productive power of each dollar's worth is now; and, on the other
hand, if we continue to pile up fortunes, great and small, till there
are in the country two thousand dollars for every man, woman, and
child of the population, interest will fall, because the productive
power of a dollar's worth will become less than it now is.

_How Competition fixes Interest._--We can now see how it is that the
capitalist can make the _entrepreneur_ pay over to him the amount left
in his hands after paying wages. Every unit of capital that any one
offers for hire has a productive power. It can call into existence a
certain amount of goods. The offer of it to any _entrepreneur_ is
virtually an offer of a fresh supply of the kinds of goods which he is
making for sale. Loaning ten thousand dollars to a woolen manufacturer
is really selling him the amount of cloth that ten thousand dollars
put into his equipment will bring into existence. Loaning a hundred
thousand dollars to the manufacturer of steel, so as to enable him in
some way to perfect his equipment, is virtually selling him the number
of additional tons of steel, ingots, or rails that he can make by
virtue of this accession to his plant.

_The Significance of Free Competition._--Now, the tender of capital
may be made to any _entrepreneur_ in a particular industry, and the
existence of free competition between these _entrepreneurs_ implies
that a lender of capital can get from one or another of them the whole
value of the product that this capital is able to create. A unit of
capital in the steel business can produce _n_ tons of steel in a year,
and if one employer will not pay the price of _n_ tons for the loan of
it, another will. This, indeed, implies an absolutely free
competition; but that is the condition of the problem we have first to
solve. When we know what ideally active competition will do, we can
measure the effects of the obstructions that, in practice, competition
actually encounters.

_Competition for C