208 PRINCIPLES OF RURAL ECONOMICS 



have a selling price, it has become customary to speak even of 

 these things in terms of money, as so many dollars' worth. This 

 merely means that since all one's tools, implements, live stock, 

 etc., possess value, it is convenient to speak of them all in 

 terms of that one quality. This has led some people into the 

 mistaken notion that capital is some kind of a spiritual or im- 

 material entity inhabiting the material bodies called tools, ma- 

 chines, etc. As a matter of fact, it is only the value of these 

 things which men are thinking about when they speak or write 

 thus. Ask any farmer or business man how mtich capital he 

 has, and he will answer in terms of dollars. Ask him, however, 

 in what his capital consists, and he will not answer in terms of 

 dollars at all, but in terms of plows, horses, cattle, buildings, 

 machinery, etc. His answers will show very clearly that he 

 knows exactly what capital is, even though he sometimes uses 

 words incorrectly. However, there is nothing incorrect in using 

 the idea of value as a means of expressing quantity, of telling 

 how much wealth one possesses. There is no way of express- 

 ing the quantity of a number of unlike things except by reducing 

 them all to a common denominator, as length, bulk, weight, etc. 

 But it would be absurd for a farmer to try to tell you how much 

 capital he has in any of these terms, to say, for example, that 

 he has so many pounds, or cubic feet, of tools, horses, and cattle. 

 His only method is to give you the sum of their values and to 

 state these values in terms of money. 



Relation of abstinence to capital. As indicated above, fore- 

 thought and abstinence are at the very foundation of the whole 

 capitalistic process of production. Let every one consume his 

 entire income and there will be no new capital that is, no new 

 tools produced, and the existing stock will eventually wear 

 out. Such a community would speedily decay. Let every one, 

 on the average, save just enough of his income to replace the 

 worn-out capital, and that will be a stationary community. Let 



