312 PRINCIPLES OF RURAL ECONOMICS 



There was a time when a farmer could succeed with very little 

 capital, for the simple reason that nobody used a great deal. He 

 was as well equipped as his competitors in the industry and 

 could produce as cheaply as they. But in this age of labor- 

 saving devices he must be as well equipped with these devices 

 as his competitors, otherwise he will not be able to produce 

 cheaply enough to sell his products at a profit. But to equip 

 himself with all these modern machines and implements is to 

 possess a large amount of capital as compared with the farmer 

 of a century or even a generation ago. Capital does not rain 

 down from the sky, nor does it come into existence in any 

 other mysterious way. It comes into existence through the sim- 

 ple process of saving and investing. So long as I spend all 

 my income for consumers' goods I shall never become a cap- 

 italist. Every time I spend a dollar for a productive tool rather 

 than for an article of consumption, I become a capitalist to the 

 extent of a dollar. If I spend a great many dollars in this way, 

 I become a great capitalist, and that is all there is to it. It is 

 true, as pointed out already, that I may spend my dollars for 

 tools directly or I may spend them indirectly through the 

 medium of savings banks or other credit institutions. 



Since capital is coming to be a more and more indispensable 

 factor in industry, it follows that the man who supplies capital, 

 that is, who spends his income for tools rather than for con- 

 sumers' goods, is coming to be a greater and greater benefactor. 

 He supplies a thing which is needed more than it was ever 

 needed before, and which is coming to be more needed every 

 year. Society usually pays highest for what it most wants. 

 That is the simple and logical explanation of the fact that the 

 capitalist is coming to be a more and more important personage 

 in every progressive society. This is as simple and logical a 

 result as it was that the soldier should have been the most 

 important personage in an age when society needed soldiers 



