The rate of return to capital

Analysis begins with a natural economy, but the final problem for a theory of profit or of ntecest is a ratio between sums of money. If we take capital to be money invested, we must ect any theory representing interest as the product or rent of a particular factor of produc n. But the productivity theory in any form fails to account for the general rate of return because it cannot prove that an increase of the aggregate physical product of society results in an increase of the aggregate of pecuniary return. The rate to be explained is an average of actual rates. For capital as money there cannot be a rate determined by a marginal in crement. And the primary problem is the rate of the whole net pecuniary return, not the rate of interest only. The latter cannot be marked off from the whole return, either as a specific product or as something determined definitely by time preference. The best approach to the problem of the rate of return is an analysis of the circuit flow of money.