If you can fill the unforgiving minute
With sixty seconds worth of distance run, 
Yours is the Earth and everything that's in it 
And—which is more—you'll be a Man, my son!
———If, Rudyard Kipling 

Yet the old definition of leisure (from the Oxford English Dictionary), "the freedom or opportunity to do something specified or implied," should alert us that leisure is extraordinarily important. "Something specified or implied" can be any action whatever. This degree of generality tells us that leisure is a fundamental of action. 

That was Aristotle's view. Aristotle, who was certainly not given to rash and thoughtless hyperbole, repeatedly emphasized the importance of leisure (schole). "As I must repeat once again, the first principle of all action is leisure." (Pol., Bk VII, 3) Indeed, "we are busy that we may have leisure." (Nich. Eth. Bk X, 7.) According to Aristotle, leisure is the goal of busy-ness, of what we call labor. Aristotle is the first, and so far the only philosopher, to have held the doctrine that I call scholism: the view that leisure is a fundamental human value. He did not, however, give a formal account of its nature. 

The common definition of leisure as "time off work" or "time for play" points out an important aspect of leisure: time. It specifies the nature of the freedom or opportunity which is involved in leisure: leisure is time available for action. Unfortunately, to define leisure as time off work is like defining money as a commodity which can be exchanged for useless luxuries. Such a definition of money would blind us to the practical uses of money, and the common definition of leisure blinds us to the profoundly practical uses of leisure. 

To grasp the full significance of leisure, we must recognize it as time available for any action whatever. When you set aside an hour, day or decade for a particular project, you are devoting an hour, day or decade of your leisure to that project. Whether your project is utterly frivolous or profoundly serious, you require leisure for it. Leisure is a basic resource which is necessary for, and which is used up in, the performance of any action whatever, and therefore in pursuit or enjoyment of any value whatever.

So, what is leisure? To devote your leisure to some action means to devote your mental and physical powers to that action for that period of time. It means to devote your life to that action for that period of time. A minute or hour of your leisure is a minute or hour of your life. Your leisure is your life. Formally, leisure is an individual human life as measured by time. Informally, leisure is the time of your life.

Leisure is a value because life is a value. Leisure is just life regarded as a series of measured portions. 

Labor is leisure spent on production. Labor is leisure which is spent for something beyond itself, for its product. Labor is by definition exclusively a means, and its value qua labor lies in its product. 

As a means, labor can only be valued for its utility, yet the "disutility of labor" is a byword in economics. Disutility of labor is an alleged universal aversion to honest toil—a mysterious laziness imbedded in every human being. Disutility of labor was thought up to explain the evident fact that people refuse to spend all their time working, despite the equally evident fact that they could earn more goods by doing so. Disutility of labor is entirely a figment of a flawed theory that focuses merely on one use of our fundamental resource, that ignores its other uses—and that lacks a concept even to name that resource! 

But leisure is the fundamental resource, so men's reluctance to work is self-explanatory: they have other things to do with their leisure! Any particular kind of work at any particular time competes for our leisure with all those other things. The "other things" for which men reserve their leisure include every human value without exception.

The chief error in regarding labor as the basic resource is that labor is by definition solely a means, a cost. If we are to compare means and ends, we must do it in terms of a value which is both a means and an end, which can relate cost to worth. 

The pattern is: labor is a means to other values, those other values are a means to leisure. Dropping the "other values" from this pattern we can say with Aristotle that we labor in order to have leisure! And because we recognize labor as simply a use of the quantitatively definite value of leisure, we can numerically compare the means we expend to the end we reap. 

This is practically important. The man whose year's work earns values which will only sustain him for less than a year is in trouble. The man whose year's work earns values which will sustain him for more than a year is thriving. And the only basic way to tell if you're in the one state or the other is by calculations—actual numerical computations—in terms of leisure. 

By comparing the leisure we spend on our values to the leisure we derive from them, we can determine if we're getting ahead. As we'll see, getting ahead in terms of leisure is the key to an ever-expanding scope of action and valuing, the essence of personal progress. 

The quantities of leisure we spend as means to our values are our expenses, and the leisure we derive from our values as end is our income. The difference between our income and expenses is our profit or loss. In this sense, leisure is a measure of value. We can use such calculations to learn how well we did in the past, and to plan our course for the future. 

Leisure is a measure of an individual's values in the same sense that money is a measure of market value. Just as we must economize money, so we must economize leisure. As means, both are measures of our expenses. As ends, both are measures of our income. When we use the same value to measure both income and expenses, we can calculate profit or loss by simple subtraction. Just as accounting in terms of money is simple in essence, but endlessly complicated in the details, so is accounting in terms of leisure. 

The analogy with money helps us to understand how to measure values in terms of leisure, but leisure is more fundamental than money. Leisure came first: men have had the potential to measure values in terms of leisure for as long as they have been able to count, while money can only exist in a social context, and only then when trade is quite advanced. Leisure is a measure of every value, while money is (directly) a measure only of whatever is bought and sold. And finally, leisure is a measure even of the value of money; you don't know the value of a sum of money to you until you know how much work it would take you to earn it, and how long you could live on it. 

After I had spent many years pondering this problem, I found the solution in George Reisman's concept of invariable money. That concept supplies the missing piece of the puzzle, and shows how to refine and extend the analogy between leisure and money. 

Dr. Reisman writes, "When economists realized that even a gold money is regularly subject to forces that tend to change its value from the side of money, they launched a search for a money of invariable value—that is, for a money under which changes in prices would reflect exclusively changes operating on the side of goods, not money. ... Ricardo believed that in order for gold to be an invariable standard of value, the principal requirement that it would have to fulfill is always to require the same quantity of labor in its production." (Capitalism, Jameson Books, 1996, Ch. 12, Sec. 5, p. 537) Adam Smith tentatively suggested that grain, as the food of laborers, would be more stable in value than gold. 

Dr. Reisman's approach to invariable money is of a different order. He locates the essence of invariable money in an invariable volume of spending: "a fixed, constant aggregate expenditure of [money] for products—e.g., a fixed aggregate expenditure for products of one billion ounces [of gold] per year." (Ch. 12, sec. 5, p. 537) 

Dr. Reisman shows that constancy of total spending for products in a whole economy is precisely what is required for money to serve as an invariable measure of value. When total spending for products remains constant, a doubling of production leads to a halving of the general price level, a halving of production leads to a doubling of the price level. People in such an economy can meaningfully calculate in terms of money, and yet grow richer or poorer with no change in their money incomes and expenditures whatsoever. 

It is hard to overstate the brilliance and fruitfulness of this concept of invariable money. It links money's invariability to money's essential use: spending. It recognizes that other monetary factors—such as the quantity of money in existence, the amount of cash holding, and the cost of production of money—can only affect the value of money by affecting the volume of spending for products. The condition of invariable spending acts like a conservation law in physics: a dollar more spent here means a dollar less spent there. This reduction to fundamentals enables Dr. Reisman to garner a rich theoretical harvest. On pages 538 and 539, he lists more than a dozen crucial findings which follow from analysis based on his novel concept of invariable money! 

The significance of invariable money for the leisure theory of value is that constancy of total spending is precisely the condition which each of us faces, necessarily and inexorably, in terms of our leisure. We spend 24 hours of leisure every day, neither more nor less. If we grow richer or poorer, we still spend 24 hours of leisure every day. If we learn how to do in only 1 hour some chore that used to take 2 hours, we're better off by the hour saved, but we necessarily spend that hour on something else—so we still spend 24 hours of leisure every day. Whatever can be shown of an economy with invariable money can be shown, with the necessary adaptations, of an individual in terms of his leisure. 

In terms of leisure, each individual is analogous to an entire economy with invariable money. For each individual has his very own money analog with which to measure his progress or regress. Even though you and I may both state all our values in terms of leisure, my leisure is not yours. An hour of your life is not an hour of my life: the units are different. Trade between individuals is analogous to trade between economies which use different moneys.

So the principles Dr. Reisman worked out for an economy with invariable money can be applied to an individual in terms of his leisure. 

"Let us imagine a nation of fisher[men], without private ownership or capital, dwelling naked in caves, and living on fish caught by hand in pools left by the ebbing tide. All the workers here may be considered equal, and each man is presumed to catch and eat 3 fish per day. But now one prudent man limits his consumption to 2 fish per day for 100 days, lays up in this way a stock of 100 fish, and makes use of this stock to enable him to apply his whole labor power for 50 days to the making of a boat and net. With the aid of this capital he catches 30 fish a day from that time on." (George Reisman, Capitalism, p. 787, quoting Bohm-Bawerk, quoting Roscher. Bohm-Bawerk and Reisman add the further assumption that the boat and net have a working life of 100 days.)

The second thing we do is dispose of irrelevant difficulties by assuming that Joe lives in a reliably sunny and arid climate, so that his saved fish are quickly preserved by drying. 

The third thing we do is resist the temptation to measure Joe's values by fish, and measure them instead in days of Joe's leisure, a unit which we abbreviate "D." 

His profit is easy to see if we look at his day in more detail. When he has spent 2/3 D catching 2 fish he has enough for his daily consumption; he's earned his living, so he can knock off early. He can take the remaining 1/3 of the day off. That 1/3 D is his profit. 

Leisure in the common meaning of the word—time off work—is profit! Joe's 1/3 D is a part of his life free from the necessity of toil, a part of his life that he can spend as he pleases. He can spend it basking in the sunshine, or idly watching the clouds drift by. He can spend it wondering if picking blackberries from the cliffside would be easier than catching fish, or he can spend it working out the accounting principles his new economic status requires. 

But Joe spends his profit producing another fish: he invests his profit in a capital good, i.e., a good which is a means to producing other goods. 

Joe's fish is theoretically momentous. It is simultaneously his savings, the only residue of his profit, his only wealth, and his only capital good. The process of producing that capital good is the process of investing a profit, and it is the process of creating wealth. Concepts which we form separately in a money economy, and which economists must laboriously connect to each other, are inextricably fused in Joe's economy, and require a labor of thought to separate! 

But still, Joe's profit came first, before his wealth and his capital good: if he had spent his entire leisure producing for present consumption, he would have had no leisure to spend producing a capital good. Observe further that if Joe had consumed his profit, if he had spent it basking in the sunshine for example, he would have nothing to show for it; he would have no capital good. Joe's wealth is invested profit.

In the analogy between an individual and a money economy, worth corresponds to consumer prices, while cost corresponds to prices of factors of production. 

With these appraisals, we can re-calculate Joe's profit as the worth of the goods he consumes minus the cost of the goods he consumes: 2 x (1/2 D) - 2 x (1/3 D) = 1/3 D, which agrees happily with our earlier calculation of Joe's profit. But the earlier calculation is more fundamental: this one has built into it the fact that Joe spent the leisure which was his profit on the production of a capital fish, which he need not have done. 

How is Joe to appraise his capital fish? It cannot be appraised for its worth in present consumption, because it is not part of present consumption. Joe doesn't even know what its worth to him will be! If he continues to consume 2 fish per day, his saved fish will eventually have a worth of 1/2 D. But if he were to binge on fish some day, eating the saved fish plus 3 others, it would end up having a worth of only 1/4 D. If it was his sole consumption one day, its worth would be fully D. A new principle is required to assign a value to Joe's capital fish. 

We adopt the principle that capital goods are booked at cost. By valuing capital goods at cost, we follow the precedent of a long line of accountants. 

Valuing capital goods at cost makes their value numerically equal to the profit that was invested to produce them. Here it makes the value of Joe's capital fish equal to the 1/3 D profit he spent on it. 

Rate of profit is profit divided by capital. When Joe saved his first fish, his rate of profit was undefined; his capital was zero, and you cannot divide by zero. When he saved his second fish, his rate of profit was his profit of 1/3 D divided by the capital from his previous day's saving which was also 1/3 D, a rate of 100% per day. As his profits remained the same, and his capital increased, his rate of profit steadily fell, until when his capital reached 100/3 D, his rate of daily profit had fallen to 1/3 D divided by 100/3 D, i.e., 1/100 or 1% per day. 

His daily profit is the worth of his living for the day, D, minus the cost of the fish he consumes, or D - 2/3 D = 1/3 D. His capital is increased each day by the D he spends on his boat and net, and decreased by the cost of the 2 fish he consumes, for an overall increase in his capital of 1/3 D each day. When he is done, he has a boat and net with a value of 50D, and no fish. 

Joe is still reaping a profit over this period, but plowing it all back into investment in his boat and net. The source of his profit over this period is the advance of value of his saved fish from their cost, or book value, to their worth as he consumes them. 

Over this period, his rate of profit continues to fall. His profit remains the same, but the value of his capital increases from 100/3 D to 50 D. By the end of his boat building, his rate of profit has fallen to 1/3 D divided by 50 D, i.e., 1/150, about 0.67% per day. 

But now Joe is consuming more than fish. Joe doesn't eat his boat and net, but he does consume them, he uses them up, over 100 days. So the daily cost of the goods he consumes over this period is 1/15 D in fish, PLUS 1/00 of a boat and net at a cost of 50 D, which adds another 1/2 D. The grand total cost of this consumption is 17/30 D. 

Joe's daily profit is now his living, D, minus the cost of his consumption, or 13/30 D. On the first day, his rate of profit is 13/30 D divided by the 50 D value of his boat and net, i.e., 13/1500 or 0.867% per day. 

After 100 days of this, he has accumulated 2800 fish, and his boat and net are gone. At the new cost of fish, this is a capital of 280/3 D. It can be seen as the accumulated profits of the past 100 days—1300/30 D—plus the 50 D value of the boat and net at the new cost of fish—1500/30 D. His rate of profit has fallen again, to 13/30 D divided by 280/3 D = 13/2800, or about 0.46% per day. 

And yes, his profit is real, and it is really leisure. If he is so inclined, Joe can knock off work really early, and devote fully 13/30 of his day to anything he pleases without growing any poorer or missing any meals! 

The worth of Joe's capital determines the duration of the projects he can consider. When he had 50 D worth of capital, he was (just barely) able to begin his 50 day boat and net project. At his present rate of consumption, his 2800 fish are worth 1400 D—he can undertake projects requiring more than 3.8 years of leisure!

The worth of a given stock of goods, unlike their book value, is not carved in stone. It depends on the rate at which they will be consumed. It is inherently a prospective, future-looking, measure. If Joe doubled his consumption of fish, their worth would fall by half. 

We calculate the worth of Joe's capital as its book value times the current ratio of worth to cost of final goods, i.e., of consumers' goods, i.e., of fish. This is obvious when his capital is entirely invested in fish, for then the worth of his capital is the worth of a pile of fish. To the extent that his capital is in goods other than final goods, this calculation also involves an estimate of how much final goods those other goods will be used to produce. 

When Joe consumes his profits, the book value of his capital becomes fixed at its current level. Its worth also becomes fixed, but in general at a different level, one determined by his consumption of final goods. His profits become fixed at the difference between worth and cost of goods consumed. So his rate of return based on book value of capital, and his rate of return based on its worth will both be fixed, but generally at different levels. He will have reached a steady state very different from his beginning. 

To illustrate a steady state, let's suppose that when Joe's first boat wears out he decides to raise his final consumption to 4 fish per day, and to consume all his profits from then on. That is, he decides to fish and build boats just enough to maintain his capital, and to devote the rest of his leisure to other things. 

The cost of fish remains at 1/30 D because, although he catches fewer fish when he knocks off early, he still catches them at the same rate. So the cost of the fish he lives on is 2/15 D per day. The cost of running a boat and net remains at 1/2 D. So his profit is his living, D, minus these costs, or 11/30 D per day. 

So he can reduce his production of boat and net or of fish to 19/30 D per day. When he does so, what happens to the other 11/30 D of his leisure? It is spent producing and enjoying other things which are worth precisely the leisure they cost him—that's the meaning of the assumption that he consumes his profits! He is still profiting, he's just not investing his profits in any durable form. 

The book value of his capital remains 280/3 D. The worth of his capital remains at the higher value of 280/3 D times 1/4 D divided by 1/30 D, or 700 D. The rate of profit based on book value remains at 11/30 D divided by 280/3 D, or 11/28% per day. The rate of return based on the worth of his capital remains at 11/210% per day, permanently lower than the rate based on book value. (This lower rate seems to correspond to interest, with its difference from rate of profit unusually large due to the assumptions of the example.) 

Joe's consumption of fish is higher than it could have been when he started out, and 11/30 of every day is permanently his to spend on whatever he pleases.

At every step, calculations in terms of leisure have been simple and commonsensical. Hang on to that thought; you'll need it, because I'm about to draw some conclusions that you will probably find startling 

We did not start by somehow knowing the worth of individual fish, and we did not add up any such revealed numbers to get a total that just happened to be D. We started by knowing that their total worth is D. Joe's final consumption is worth D: that is not a result to be discovered by calculation, but a datum on which calculation is based. 

Joe's daily living is, necessarily and inevitably, worth precisely D. That is a basic fact of life, always and everywhere. It is a fact for Joe if he consumes 2 fish or 200. It is a fact for Joe if he consumes nothing but fish, or many different goods. It is a fact for the rest of us. It will remain a fact to our most remote descendants. 

If, instead of living exclusively on fish, Joe consumed a godzillion different goods, his final consumption would remain, precisely and inexorably, D! To account for it in detail, he would have to multiply the quantity he consumed of each final good by a coefficient representing its worth per unit quantity, and then add them all up. This would be a very difficult task, but we already know the answer he would get: D! 

So our limitation of Joe to nothing but fish is inessential to the worth of his final consumption. If Joe also caught and ate rabbits, and painted pictures on his cave wall and admired them, the worth of his final consumption would remain precisely D. 

The collection of final goods which Joe consumes in a day is his daily living. Its worth is precisely D. The larger his living, the lower the worth of its parts, in such a way that its total worth remains D. (This is analogous to the prices of consumer goods in the face of a constant monetary demand for them.) In the simplest case of a one-commodity economy, each unit of his living is inversely related to D: if he consumes n fish, each one is worth D/n. 

We simply cannot do without the concept of a living; it is at the base of everything else. Joe's profit is the leisure he has left after earning his living. His capital goods are produced with the leisure remaining after earning his living. The dividing line between his progress or regress is his living.

A living is not the smallest quantity of final goods you can get by on, it is what you actually do get by on. A living is often called subsistence, but that term can be misleading, as subsistence is usually and wrongly associated with images of direst poverty. Joe's daily living is 2 crummy fish; my living is a vastly greater collection of goods than Joe's; Bill Gates' living is vastly greater again than mine. Yet for each of the three of us, in terms of our own leisure, our daily living is inescapably worth D! 

The collection of goods Joe produces in a day is his production, and it costs him D in leisure. If his only production in the day is n fish, then the labor cost of each fish is D/n. If he produced a godzillion different goods, then to account for them all he would have to add up the leisure expended on each. This calculation would involve all sorts of decisions about which expenditure of leisure to charge to which good, so it would be very difficult. But we already know the answer—precisely D! 

The worth of a daily living = the daily labor cost of production = D.

If you think that this equation makes profit impossible, go back and look at the examples more closely. The key to profit in the face of this equation is that, to the extent that your production exceeds your living, the cost of that excess is the book value of your newly produced wealth.

"Let us imagine wage earners without capital, dwelling stylishly dressed in apartment towers, and living on dollars earned by working in an office. The workers here are presumed to earn and spend on consumption $3,000 per month. But now one prudent man limits his consumption to $1500 per month for 10 years, investing the other $1500 per month in a mutual fund which, by earning the average rate of profit in the surrounding economy, grows in dollar value at a compound rate of 7.2% per year, and from the capital thus accumulated draws $1500 per month from that time on. The price level and average rate of profit in the surrounding economy are presumed to be fixed."

An interesting exercise, should you choose to do it, is to calculate Rob's profit in terms of his leisure while he is consuming his entire money income, while he is saving half of it, and while he is drawing a living from his capital. (It is very helpful to know that, due to the laws of compounding, he ends up with an investment which will yield him $1500 per month indefinitely.) 

For those skilled in economic theory, it would be interesting to work out the effects of Rob's actions on the wider economy, with and without the assumption that the money rate of profit remains fixed. What would be the economics of a society made up of Robs, in various stages of their savings program? 

Knowledge is a product: it is produced through the labor of original discovery or of learning from others. Knowledge is not material, but it is not fleeting or momentary: knowledge endures. Knowledge is a good. 

Knowledge is not merely a consumption good, to be pursued for the sheer joy of contemplating it. The joy of contemplating truth, especially a new truth, is real; it is an essential part of the learner's or discoverer's reward. But contemplation is production and consumption in one: it is worth the leisure we spend on it, but it costs the leisure we spend on it; it leaves nothing over for the future. And even our delight in contemplation rests on the usefulness of knowledge. Contemplating knowledge is like admiring a train, a ship or an airplane: our awareness of its use is essential to our delight. 

Knowledge is a capital good, but of a peculiar kind. Knowledge is not consumed by use, you cannot use it up. Money and leisure are like matches, to spend them once is to use them up; material capital goods eventually wear out. But knowledge can be used over and over, as often as you need or wish: it doesn't depreciate! It is not a one-time means, but an enduring power. "Knowledge is power," taught Sir Francis Bacon, and he was right! 

Not all knowledge is equal in power. When Aristotle sought the "highest and best" knowledge—wisdom: the knowledge of first causes and ultimate principles—he was, perhaps unwittingly, seeking the most powerful knowledge.

For theory is the most powerful knowledge. Theory condenses vast blocks of knowledge into a few words or algebraic symbols, and gives you the power to reach conclusions in mere seconds that could otherwise require a lifetime of study! Theory vastly increases the productivity of your thinking. In this sense, theory gives you power over knowledge.

Theory is capital knowledge. Just as a capital good is a good used to produce other goods, so theory is knowledge used to produce other knowledge. This is most evident with logic and epistemology, but is true of all theory. Theory is a body of principles, and a principle which guides your research is knowledge used to produce knowledge. Theory is a tool of discovery. 

Not all knowledge can be got at the same cost. You can learn that it's raining by glancing out the window. Theory is more costly. 

To formulate a theory which is fundamental to an entire field of study or to all of life; to integrate all the evidence; to eliminate errors and confusions one by one, when each change obliges you to re-think the entire subject; to process the theory into a form which can be quickly grasped and efficiently used—that is a work of decades.

A fundamental theory is very costly to its creator—and therefore it is precious to him, for capital goods are booked at cost. It can never be so precious to those who learn it in a matter of hours or days, though it can be even more powerful. 

Yet the difference between the theorist's decades and the learner's hours or days gives an estimate of the theorist's service to the learner, and may serve to estimate the gratitude we owe to those who create the theories by the power of which we live.