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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 await repayment backed by the law. The investor has intangible property. As Commons argued in different places, there are differences between those who save and invest in terms of risk portfolio but otherwise they are both waiting.

It must be said that Commons clearly views prices as playing a key role in supply and demand and a regulator of scarcity. Some heterodox economists may feel that Commons was too weak or accommodating to neoclassical economists in terms of scarcity and the role of supply and demand.  

Finally, Commons wanted to make the point that the waiting wasn't about some past foregone consumption but rather the foregone opportunities moving forward. Commons writes that, "Thus the economic effects of the negotiational psychology of will ingness are not the painful costs of abstinence nor even any painful “costs” of waiting. They are the volitional costs of foregoing avail able alternatives, either because the alternative buyer offers a lower income to the seller, or the alternative seller imposes a higher outgo on the buyer.”” But it is this choosing of alternatives that diverts production. The same is true of the other aspects of human forecasting and planning. All of them, whether expected interest, expected profits, expected wages, etc., are alike in that the choices between present alternatives have the social effect of diverting production into the immediate or remote future. " (Commons, 1934, pg. 504).

From there, Cassel then pointed towards short and long periods of waiting time. This will be the focus of the next installment.


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