CARRUTHERS.—Ûn some of the Terms used in Political Economy. 7 
absurdity goes even one step further; the steam-engine is circulating 
capital when it is still in the hands of the maker—at least I think Mill’s 
definition would so classify it. When it is in the hands of the user and in 
“full work it is clearly fixed capital, and therefore less productive than before 
it came into use. 
These illustrations show how needless, or even mischievous, is the usual 
subdivision of wealth into fixed and circulating capital. The division I 
have indicated of direct wealth and implements is, however, natural and 
essential to an intelligent study of the laws which govern the production of 
wealth, 
The sacrifice which is always made when labour, which would otherwise 
have been applied to the production of direct wealth, is applied to the pro- 
duction of implements, is made by the labouring classes. The whole wealth 
of the community belongs to part only of the individuals composing it. 
They apply a portion of their wealth to their own use, the rest they give to 
labourers to induce them to work for them. The reasons which induce 
them to employ part of their wealth in this manner, are not influenced by 
a resolve on the part of one of their number to produce new implements. 
When, therefore, new implements are made, capitalists do not take men 
away from the production of those commodities which they intend to use 
themselves ; in other words, they do not lessen their own personal expendi- 
ture. They take men who would otherwise be engaged in producing com- 
modities for the labourers, and, of course, less of those commodities are 
produced, This less quantity becomes the total fund to be divided between 
the labourers as wages. The owners of wealth as a body, without any 
personal sacrifice, become the owners of the implement; the sacrifice is 
made by the labourers alone and at once. 
Generally, and perhaps always, except in the case of countries, which 
invest much wealth abroad, like England and Holland, the labourers suffer 
a further and still greater loss than the first cost of the new implements. 
The wealth-owners do not act as a body, but each individual acts indepen- 
dently of the others. Each man gives, of his own share of the general wealth, 
a certain portion annually to the labouring classes. When the implement 
was completed, no one would give more than before, while the man for whom 
it was made would give less; his gross share of the whole would be less than 
before by the whole cost of the implement, and he would give less by 
exactly that amount, as he would not reduce his own personal expenditure. 
There would thus be a general rise of profits, and a general fall of wages 
equal to the total cost of the implement, and this would continue for some 
years until the causes which had before fixed the relative proportions of 
