CannvTHERS.— n some of the Terms used in Political Economy. 17 
capital; we will therefore examine his four fundamental propositions as 
given in chap. v., to see whether he means any or all of the three requisites 
of production above given. 
His first proposition is, that “Industry is limited by capital,” and con- 
versely, ‘‘ every increase of capital gives, or is capable of giving, additional 
employment to industry, and this without assignable limit.” 
The whole wealth produced by the community belongs to the capitalists. 
The labourers have no share in its ownership. Theoretically, the capitalists 
could store it in their warehouses and keep it for their own exclusive use, 
leaving the workmen to starve; practically, they do not, nor would they 
be allowed to do so. It is their interest to keep only a certain share for them- 
selves, and to give the balance to the workmen to induce them to work for 
them and produce new wealth. If they acted together as a class, or if no 
individual capitalist wanted to get more than the share he was already 
entitled to of the total product, they need never give the labourers more 
than the bare necessaries of life. All that could be produced beyond that, 
they might themselves consume. The labourers would then be divided into 
two classes; one engaged in producing the necessaries of life for themselves 
and for the other class ; the other engaged in producing luxuries for the 
rich, and new and improved implements, which would still further increase 
those luxuries. It is obvious that if the wealthy then reduced the share 
of wealth which they gave to the producers of necessaries, some of the 
labourers would starve, and industry would thus be lessened as the number 
of labourers was lessened. The theorem is correct only when the conditions 
are such as are here indicated, when the labourers get only the bare 
necessaries of life, and when capital means these necessaries. Industry is 
then limited by capital, but not otherwise. 
Fortunately, capitalists do not act together as a class; each individual 
tries to get more than his allotted share of the wealth of the community, 
and all try to entice workmen from the others by giving higher rewards, 
that is, they **employ more of their capital in reproductive investment.” 
The result is not, however, an increase of industry as stated in the theorem, 
but higher wages for the labourers. 
The second theorem is, that “Capital is the result of saving.” The 
meaning of saving in this sentence is not that which it usually bears. It 
means the saving made by the capitalist, that is, giving to the working 
classes some of the wealth which the capitalist might, had he so chosen, 
have consumed himself. He says, by way of illustration of the theorem,— 
“ If all persons were to expend in personal indulgences all that they pro- 
duce, and all the income they receive from what is produced by others, 
; B 
