But it is more difficult to clear away from the idea of capital the ambiguities that beset it, and to fix the scientific use of the term. In general discourse, all sorts of things that have a value or will yield a return are vaguely spoken of as capital, while economic writers vary so widely that the term can hardly be said to have a fixed meaning. Let us compare with each other the definitions of a few representative writers:
“That part of a man’s stock,” says Adam Smith (Book II, Chap. I), “which he expects to afford him a revenue, is called his capital,” and the capital of a country or society, he goes on to say, consists of (1) machines and instruments of trade which facilitate and abridge labor; (2) buildings, not mere dwellings, but which may be considered instruments of trade—such as shops, farmhouses, etc.; (3) improvements of land which better fit it for tillage or culture; (4) the acquired and useful abilities of all the inhabitants; (5) money; (6) provisions in the hands of producers and dealers, from the sale of which they expect to derive a profit; (7) the material of, or partially completed, manufactured articles still in the hands of producers or dealers; (8) completed articles still in the hands of producers or dealers. The first four of these he styles fixed capital, and the last four circulating capital, a distinction of which it is not necessary to our purpose to take any note.
Ricardo’s definition is:
“Capital is that part of the wealth of a country which is employed in production, and consists of food, clothing, tools, raw materials, machinery, etc., necessary to give effect to labor.”
Principles of Political Economy, Chapter V.
This definition, it will be seen, is very different from that of Adam Smith, as it excludes many of the things which he includes—as acquired talents, articles of mere taste or luxury in the possession of producers or dealers; and includes some things he excludes—such as food, clothing, etc., in the possession of the consumer.
McCulloch’s definition is:
“The capital of a nation really comprises all those portions of the produce of industry existing in it that may be directly employed either to support human existence or to facilitate production.”
Notes on Wealth of Nations, Book II, Chap. I.
This definition follows the line of Ricardo’s, but is wider. While it excludes everything that is not capable of aiding production, it includes everything that is so capable, without reference to actual use or necessity for use—the horse drawing a pleasure carriage being, according to McCulloch’s view, as he expressly states, as much capital as the horse drawing a plow, because he may, if need arises, be used to draw a plow.
John Stuart Mill, following the same general line as Ricardo and McCulloch, makes neither the use nor the capability of use, but the determination to use, the test of capital. He says:
“Whatever things are destined to supply productive labor with the shelter, protection, tools and materials which the work requires, and to feed and otherwise maintain the laborer during the process, are capital.”
Principles of Political Economy, Book I, Chap. IV.
These quotations sufficiently illustrate the divergence of the masters. Among minor authors the variance is still greater, as a few examples will suffice to show.
Professor Wayland, whose Elements of Political Economy has long been a favorite textbook in American educational institutions, where there has been any pretense of teaching political economy, gives this lucid definition:
“The word capital is used in two senses. In relation to product it means any substance on which industry is to be exerted. In relation to industry, the material on which industry is about to confer value, that on which it has conferred value; the instruments which are used for the conferring of value, as well as the means of sustenance by which the being is supported while he is engaged in performing the operation.”
Elements of Political Economy, Book I, Chap. I.
Henry C. Carey, the American apostle of protectionism, defines capital as “the instrument by which man obtains mastery over nature, including in it the physical and mental powers of man himself.” Professor Perry, a Massachusetts free trader, very properly objects to this that it hopelessly confuses the boundaries between capital and labor, and then himself hopelessly confuses the boundaries between capital and land by defining capital as “any valuable thing outside of man himself from whose use springs a pecuniary increase or profit.” An English economic writer of high standing, Mr. Wm. Thornton, begins an elaborate examination of the relations of labor and capital (On Labor) by stating that he will include land with capital, which is very much as if one who proposed to teach algebra should begin with the declaration that he would consider the signs plus and minus as meaning the same thing and having the same value. An American writer, also of high standing, Professor Francis A. Walker, makes the same declaration in his elaborate book on The Wages Question. Another English writer, N. A. Nicholson (The Science of Exchanges, London, ), seems to cap the climax of absurdity by declaring in one paragraph (p. 26) that “capital must of course be accumulated by saving,” and in the very next paragraph stating that “the land which produces a crop, the plow which turns the soil, the labor which secures the produce, and the produce itself, if a material profit is to be derived from its employment, are all alike capital.” But how land and labor are to be accumulated by saving them he nowhere condescends to explain. In the same way a standard American writer, Professor Amasa Walker (p. 66, Science of Wealth), first declares
