FACTORS OF AGRICULTURAL PRODUCTION 2 1 1 



tn view of the necessity of having this surplus fund of pro- 

 ductive energy before tools can be produced, it cannot be very 

 inaccurate to say that capital, even in this initial form, is a factor 

 of production. It certainly is a means whereby the future pro- 

 ductive power of the community is increased, and its absence 

 wo aid be a means whereby this power would be diminished. 

 Even money is an aid in production in the sense that it saves 

 a great deal of time and energy in making the necessary ex- 

 changes. Any one will be convinced of this if he will consider 

 the difficulties he would have in supplying himself with the 

 necessaries of life by trading his services or his products for 

 these things if there were no money of any kind in circulation. 

 Money may, from 'this standpoint, be called a labor-saving tool, 

 and included under capital. 



Ways of economizing in the use of money. While it is a 

 mistake to call capital money, it is not incorrect, as we saw 

 in the last section, to call money a form of capital. Whether 

 we agree to call it by that name or not, there can be no dis- 

 agreement as to the advisability of economizing it or making 

 a little of it go a long way. This, however, does not mean 

 simply that the individual needs to spend his money wisely; 

 it means rather that the whole community ought so to arrange 

 things as to make it possible to carry on the necessary ex- 

 changes with the smallest possible amount of money. Whether 

 some form of pure credit currency, unsupported by metallic 

 money of any kind, will ever be possible or not, it is certain that 

 no nation has ever yet been able to get along without at least a 

 certain amount of money made of some material which has a 

 high value for other purposes than money. 



In recent times gold and silver have served this purpose. But 

 such money is expensive. It requires that a certain amount of 

 the productive energy of the world shall be used in getting 

 these metals for this purpose. If it were possible to get along, 



