FACTORS OF AGRICULTURAL PRODUCTION 207 



dollar for a tool he encourages the toolmakers and sets them 

 to work making tools, to the extent of a dollar. If he offers to 

 pay the dollar for a pig, he encourages the stock raisers and 

 sets them to work growing young pigs, to the extent of a dollar. 

 Whether he invests a dollar or a million dollars, the nature of 

 the transaction is the same and the results are proportionally 

 the same. 



But one may invest his dollar indirectly, that is, one may de- 

 posit it in a bank, in which case one virtually lends it to the 

 bank and the bank in turn lends it to some one who invests it, 

 that is, who buys tools, live stock, or some other productive 

 agent. Every conceivable case where capital originates, or the 

 world's stock of capital increases, will be found to be a case 

 which began in an act of waiting or saving of deferring con- 

 sumption to a future time in order that one may possess one's 

 self of a source of future income. Forethought is therefore the 

 basis of all capitalistic production. 



Money and capital. In the illustrations just used money 

 figured as the thing immediately saved and invested. Of course 

 there was capital before there was money, and capital may some- 

 times originate to-day without the use of money. But since we 

 are now living in an age when money is everywhere the medium 

 of exchange, the form in which wages are paid, and the means 

 of making investments, it happens that capital normally or gen- 

 erally takes the form of money first. That is, it is generally 

 the case that the first stage in the process of making use of 

 capital is to possess one's self of money or to get control of it 

 through credit. Afterwards this money is exchanged for tools, 

 live stock, and other equipment. Since this is the form in which 

 one, first gets his capital, it is not uncommon to speak of capital 

 as though it consisted of money. But, as we have seen above, 

 all producers' goods are capital. Again, since all one's producers' 

 goods were bought with money, and since they all continue to 



