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Common's Futurity pg. 506-510

 V. Interest and Profit Discount This section starts with a well known adage, likely as well known today as hundred years ago, that risk and uncertainty drive a discounting of the future as compared to the present. Interest rates then a re a measure of that future risk but leading to a specific discount factor today. Commons gives the example of a laborer who is in essence also a creditor to a business or any going concern. The laborer is paid in arrears, but in the meantime is working and creating use value for the employer. A business is also doing the same thing on the commodity and debt markets. A business may borrow a certain amount form a bank promising to repay them in a short period of time.  The business will factor in repaying the loan and also generating a profit, in essence a interest and profit discount of what they are paying for materials and labor today for use value tomorrow. The business may turn out to right or wrong but this is their best forecast at the mo...

Common's Futurity pg. 500-506

 3. Scarcity of Waiting pg. 500-506 Gustav Cassel was a Swedish economist who was alive from 1866 to 1945 so roughly the same time as John R. Commons. commons felt that Cassel was important in understanding interest and waiting.  The key theme was that interest is the price of waiting.   However, from this starting point there are some important differences that matter in what context this waiting occurs. Here again we see Commons surveying and thinking about how economists have written about this issue of interest and waiting. Cassel has criticized how others have thought about interest and waiting as if it was in isolation. in fact for Cassel and Commons in turn, interest and waiting are in fact allowing others to consume or invest. In this sense, two activities are occurring at the same time. It is also important to note that those who save and those who invest are both waiting. The saver has incorporeal property in that debt is issued with their savings and they ...