Marx's argument takes the form of an inquiry into the origin and social effects of capital; understanding the word capital, however, in a peculiar sense. Capital, according to the elementary teaching of political economy, always means the portion of wealth which is saved from immediate consumption to be devoted to productive uses, and it matters not whether it is so saved and devoted by the labourer who is to use it, or by some other person who lends it to the labourer at interest or employs the labourer to work with it at a fixed rate of wages. A fisherman's boat is capital as much as a Cunard Company's steamer, although the boat is owned by the person who sails it and the steamer by persons who may never have seen it. The fisherman is labourer and capitalist in one, but in the case of the steamer the capital is supplied by one set of people and the labour undertaken by another. Now Marx speaks of capital only after this division of functions has taken place. It is, he says, not a logical but a historical category. In former times men all wrought for the supply of their own wants, the seed and stock they received was saved and owned by themselves, capital was an instrument in the hands of labour. But in modern times, especially since the rise of foreign commerce in the 16th century, this situation has been gradually reversed. Industry is now conducted by speculators, who advance the stock and pay the labourer's wages, in order to make gain out of the excess of the product over the advances, and labour is a mere instrument in the hands of capital. The capitalist is one who, without being personally a producer, advances money to producers to provide them with materials and tools, in the hope of getting a larger sum of money in return, and capital is the money so advanced. With this representation of capital as money, so long as it is but a popular form of speech, no fault need be found, but Marx soon after falls into a common fallacy and positively identifies capital with money, declaring them to be only the same thing circulating in a different way. Money as money, he says, being a mere medium of exchange, is a middle term between two commodities which it helps to barter, and the order of circulation is C--M--C, i.e. _commodity_ is converted into _money_ and _money_ is reconverted into _commodity_. On the other hand, money as capital stands at the two extremes, and commodity is a middle term, a medium of converting one sum of money into another and greater; the order of circulation being expressed as M--C--M. Of course capital, like other wealth, may be expressed in terms of money, but to identify capital with money in this way is only to introduce confusion, and the real confusion is none the less pernicious that it presents itself under an affectation of mathematical precision.