5-i Wisconsin Academy of Sciences^ Arts, and Letters. 



pleasure of some one wlio can come into partnersliip witli liim 

 by finding tliese tilings for liim to begin with. 



2. Capital is the residt of saving. To consume less than is 

 produced is saving. Saving is simply laying up tbe difference 

 between wliat one spends and wliat lie earns — between wealtli 

 produced and wealtli consumed. The amount saved and so 

 added to capital may be increased by either consuming less or 

 producing more, or both. There is no other source of capital. 



3. Yet capital though the result of saving is actually consumed 

 in the very process of production. 



The wealth saved goes at once into implements, materials 

 and provisions for the daily wants of laborere, and there is sub- 

 jected to consumption, quick or gradual. It is withdrawn fi'om 

 all other possible uses. Investment for production and spend- 

 ing for enjoyment coincide in the first stages of their opera- 

 tions. Both begin with the destruction of a portion of wealth. 

 But in the spending the first is the final stage. In the product- 

 ive investment a second stage is reached, when an equivalent 

 of what has been consumed is returned with increase. Tlius 

 capital is kept in existence from age to age, not by preserva- 

 tion, but by perpetual reproduction. The greater part of the 

 present capital of England was produced within the last 

 twelve-month. The growth of capital is like the growth of 

 population. Every individual who is born dies, but in each 

 year the number born exceeds the number who die. The 

 population increases while the individuals pass away. So with 

 capital ; out of the productive consumption of one year comes a 

 greater product available for the next. 



4 What supports and employs labor is the capital lohich sets it 

 at work, not the demand for the comphted p)roduct. The demand 

 for commodities determines the directions of labor, but not the 

 amount of labor itseli That depends on the amount of the 

 capital devoted to the sustenance and remuneration of labor. 



