Some Leading Principles of Political Economy Newly Expounded, Chapter 1, Part 2. ↩
Times of commercial panic are marked by high rates of discount, but this is evidently not a high rate of interest, properly so-called, but a high rate of insurance against risk. ↩
For instance McCulloch (Note VI to Wealth of Nations) says: “That portion of the capital or wealth of a country which the employers of labor intend to or are willing to pay out in the purchase of labor, may be much larger at one time than another. But whatever may be its absolute magnitude, it obviously forms the only source from which any portion of the wages of labor can be derived. No other fund is in existence from which the laborer, as such, can draw a single shilling. And hence it follows that the average rate of wages, or the share of the national capital appropriated to the employment of labor falling, at an average, to each laborer, must entirely depend on its amount as compared with the number of those amongst whom it has to be divided.” Similar citations might be made from all the standard economists. ↩
We are speaking of labor expended in production, to which it is best for the sake of simplicity to confine the inquiry. Any question which may arise in the reader’s mind as to wages for unproductive services had best therefore be deferred. ↩
This was recognized in common speech in California, where the placer miners styled their earnings their “wages,” and spoke of making high wages or low wages according to the amount of gold taken out. ↩
Money may be said to be in the hands of the consumer when devoted to the procurement of gratification, as, though not in itself devoted to consumption, it represents wealth which is; and thus what in the previous paragraph I have given as the common classification would be covered by this distinction, and would be substantially correct. In speaking of money in this connection, I am of course speaking of coin, for although paper money may perform all the functions of coin, it is not wealth, and cannot therefore be capital. ↩
Industry is limited by capital. … There can be no more industry than is supplied with materials to work up and food to eat. Self-evident as the thing is, it is often forgotten that the people of a country are maintained and have their wants supplied not by the produce of present labor, but of past. They consume what has been produced, not what is about to be produced. Now, of what has been produced a part only is allotted to the support of productive labor, and there will not and cannot be more of that labor than the portion so allotted (which is the capital of the country) can feed and provide with the materials and instruments of production.
—John Stuart Mill, Principles of Political Economy, Book I, Chap. V, Sec. I
I speak of labor producing capital for the sake of greater clearness. What labor always procures is either wealth, which may or may not be capital, or services, the cases in which nothing is obtained being merely exceptional cases of misadventure. Where the object of the labor is simply the gratification of the employer, as where I hire a man to black my boots, I do not pay the wages from capital, but from wealth which I have devoted, not to reproductive uses, but to consumption for my own satisfaction. Even if wages thus paid be considered as drawn from capital, then by that act they pass from the category of capital to that of wealth devoted to the gratification of the possessor, as when a cigar dealer takes a dozen cigars from the stock he has for sale and puts them in his pocket for his own use. ↩
Political Economy for Beginners, by Millicent Garrett Fawcett, Chap. III, p. 25. ↩
The words quoted are Ricardo’s (Chap. II); but the idea is common in standard works. ↩
New Zealand and Its Inhabitants. Rev. Richard Taylor. London, . Chap. XXI. ↩
Principles of Political Economy, Book II, Chap. IX., Sec. VI.—Yet notwithstanding what Mill says, it is clear that Malthus himself lays great stress upon his geometrical and arithmetical ratios, and it is also probable that it is to these ratios that Malthus is largely indebted for his fame, as they supplied one of those high-sounding formulas that with many people carry far more weight than the clearest reasoning. ↩
The effect of the Malthusian doctrine upon the definitions of capital may, I think, be seen by comparing (see Chapter II of Book I) the definition of Smith, who wrote prior to Malthus, with the definitions of Ricardo, McCulloch and Mill, who wrote subsequently. ↩
Address before Massachusetts State Board of Agriculture, . Report U.S. Department of Agriculture, . ↩
Origin of Species, Chap. III. ↩
Note IV to
