CHAPTER VII. 



MONEY. 



The most concise and expressive definition of the term "capi- 

 tal," which we have seen in the writings of the political econo- 

 mists, is the one furnished by J. Stuart Mill, in his table of con- 

 tents. He says: "Capital is wealth appropriated to reproductive 

 employment." There is, indeed, a certain ambiguity attached to 

 the word wealth; but let that pass; we accept the definition. A 

 tailor has $5 in money, which he proposes to employ in his business. 

 This money is unquestionably capital, since it is wealth approjiri- 

 ated to reproductive employment: but it may be expended in the 

 purchase of cloth, in the payment of journeymen's wages, or in a 

 hundred other ways; what kind of capital, then, is it? It is evi- 

 dently, disengaged capital. Let us say that the tailor takes his 

 money and expends it for cloth; this cloth is also devoted to repro- 

 ductive employment, and is therefore still capital; but what kind of 

 capital? Evidently, engaged capital. He makes this cloth into a 

 coat; which coat is more valuable ihan the cloth, since it is the re- 

 sult of human labor bestowed upon the cloth. But the coat is no 

 longer capital; for it is no longer (so far, at least, as the occupation 

 of the tailor is concerned), capable of being appropriated to repro- 

 ductive employment; what is it, then? It is that for the creation 

 of which the capital was originally appropriated: it is product. 

 The tailor takes this coat and sells it in the market for ^8; which 

 dollars become to him a new disengaged capital. The circle is com- 

 plete; the coat becomes engaged capital to the purchaser; and the 

 money is disengaged capital, with which the tailor may commence 

 another operation. Money is disengaged capital, and disengaged 

 capital is money. Capital passes, therefore, through various forms; 

 first it is disengaged capital, then it becomes engaged capital, then 

 it becomes product, afterwards it is transformed again into disen- 

 gaged capital, thus recommencing its circular progress. 



The community is liappy and prosperous when all professions 

 of men easily exchange with each other the products of their labor; 

 that is, the community is hai)py and prosperous when money circu- 

 lates freely, and each man is able with facility to transform his 

 product into disengaged capital, for with disengaged capital, or 

 money, men may command such of tlie products of labor as they 

 desire, to the extent, at least, of the purchasing power of their 

 money. 



The community is unhappy, unprosperous, miserable, when 

 money is scarce, when exchanges are effected with difliculty. For 

 notice, that, in the present state of the world, there is never real 

 over-production to any appreciable extent; for, whenever the baker 



