28 Transactions.— Miscellaneous. 
venient instrument for passing capital from one man to another, he has no 
difficulty in disposing of it and it takes its place as a circulating medium. 
Money is therefore valuable to the owner in the same way as any other 
acknowledgment of indebtedness. As a commodity, its proper cost is 
nothing, but it is a token proving a legal claim to a share of the wealth of 
others. 
Having now explained the definitions which I believe to represent most 
accurately what wealth and capital really are, as well as the less important 
ones which it was necessary for the purposes of my paper also to explain, I 
will proceed to my main work, which is to test the arguments employed by 
Mill in the 9th part of chap. V. book I. of his ‘ Political Economy," by 
substituting these definitions for those employed by him. The greater 
clearness of view which we get will enable us to detect the fallacies which 
the confusion of his definitions prevented him from seeing. 
His fourth fundamental theorem respecting capital may be shortly 
stated to be, that by purchasing commodities a capitalist is not an 
employer of labour and does no good to the working classes, but that by 
keeping retainers, grooms, gardeners, and others working for him, or by 
giving away his income in alms, he does good to them and tends to raise 
their rate of wages. 
His illustrations are very telling and well selected. A man, he says, 
may spend part of his income in employing workmen to build houses, dig 
artificial lakes, and lay out pleasure grounds ; or he may spend the same sum 
in buying velvet and lace. If he has been in the habit of buying velvet and 
then changes his expenditure to hiring bricklayers, there is, at once, addi- 
tional work for bricklayers, and the velvet-makers do not lose their employ- 
ment, for they are employed making corduroy and other things for the 
bricklayers, so that the work given to the latter is clear gain to the working 
classes. 
He gives several other illustrations, but none, I think, in which the 
fallacy lies so deeply hidden as in the one I have selected. At first sight 
his argument looks unanswerable, but it is really quite erroneous. 
There is in the world a certain store of commodities, part of which is 
suitable to the wants of the rich, and part to those of the poor. The 
capitalist may select which of these he will take for his share, but he cannot 
turn velvet into corduroy, nor Chateau Lafitte into gin. The proportions 
of these which have been produced have been decided by men whose 
occupation and interest it is to estimate, as closely as they can, the quantity 
of each that will be required, and any sudden upsetting of their calculations 
is pretty certain todo harm. The philanthropic capitalist will find it very 
difficult to do any immediate good to anyone whom he would care to benefit, 
