F.—ECONOMIC SCIENCE AND STATISTICS. 167 
society must bear a certain proportion to the whole capital of that society, 
and never can exceed that proportion.’ * 
, What Mill said about the Wage Fund is equally applicable to ‘ the 
capital of a society’ in its relation to industry : it is “not regarded as 
unalterable, for it is augmented by saving and increases with the progress 
of wealth ; but it is reasoned upon as at any given moment a predetermined 
amount.’ ** By a writer like McCulloch, who delights to make things 
superabundantly clear, this is expressly stated : ‘ No country can possibly 
employa greater number of workmen than its capital can feed and maintain. 
But it is plain that no restrictive regulation can of itself add one single 
atom to the capital.’ * 
The reason, of course, is that given by Adam Smith: ‘ The industry 
of the society can augment only in proportion as its capital augments, 
and its capital can augment only in proportion to what can be gradually 
saved out of its revenue.’ °4 
But all this rests upon a view as to the character and extent of the 
fluidity of capital which was current among the writers of the period we 
are considering but which subsequent experience has shown to require 
profound modification. It was a view which, as we now see, combined 
an exaggerated estimate of the extent to which already invested capital 
is transferable within a country with a quite insufficient estimate of the 
extent to which newly accumulated capital is transferable as between one 
country and another. 
“4 As to the export of capital, Ricardo struck the note in 1817: 
_ ‘ Experience shows that the fancied or real insecurity of capital, when not 
- under the immediate control of its owner, together with the natural dis- 
inclination which every man has to quit the country of his birth and 
- connections, and intrust himself, with all his habits fixed, to a strange 
Government and new laws, check the migration of capital. These 
_ feelings, which I should be sorry to see weakened, induce most men of 
_ property to be satisfied with a low rate of profits in their own country, 
- rather than seek a more advantageous employment for their wealth in 
foreign nations.’ * 
All these human touches—‘ fixed habits,’ and so on—are more appro- 
priate to the age before joint-stock companies than to ours. Ricardo’s 
_ account of the situation is so moderately expressed that it may be defended, 
even for our time, by a charitable interpretation. But the conclusion 
g drawn by the succeeding generation was in fact a pretty sweeping one. 
q To this clear testimony is borne by that Ricardian of Ricardians, Professor 
_ Cairnes, writing in 1874: ‘ The assumption commonly made in treatises of 
_ Political Economy is that, as between occupations and localities within 
_ the same country, the freedom of movement for capital and labour is 
_ perfect, while, as between nations, capital and labour move with difficulty 
~ or not at all.’ * 
{ 
“IT., p. 26. 
} ee ristions and Discussions, IV., p. 42, seq., excerpted in my edition of Mill, 
; 2 88 Reprint, p. 73. 
#4 Bk. IV., ch. ii. (I. 30.) 
____*8 Principles, ch. vi., p. 161. 
d 68 Some Leading Principles of Political Economy Newly Expounded (1874), p. 302. 
