Principles of Political Economy: Abridged with Critical, Bibliographical, and Explanatory Notes, and a Sketch of the History of Political Economy — John Stuart Mill — John Shaqi
Principles of Political Economy: Abridged with Critical, Bibliographical, and Explanatory Notes, and a Sketch of the History of Political Economy
John Stuart Mill · en
Mr. Mill’s statement of the theorem respecting capital, discussed
in the argument that “demand for commodities is not demand for
labor,” needs some simplification. For this purpose represent by
the letters of the alphabet, A, B, C, ... X, Y, Z, the different
kinds of commodities produced in the world which are exchanged
against each other in the process of reaching the consumers. This
exchange of commodities for each other, it need hardly be said,
does not increase the number or quantity of commodities already in
existence; since their production, as we have seen, requires labor
and capital in connection with natural agents. Mere exchange does
not alter the quantity of commodities produced.
To produce a plow, for example, the maker must have capital (in
the form of subsistence, tools, and materials) of which some one
has foregone the use by a process of saving in order that
something else, in this case a plow, may be produced. This saving
must be accomplished first to an amount sufficient to keep
production going on from day to day. This capital is all consumed,
but in a longer or shorter term (depending on the particular
industrial operation) it is reproduced in new forms adapted to the
existing wants of man. Moreover, without any new exertion of
abstinence, this amount of capital may be again consumed and
reproduced, and so go on forever, after once being saved (if never
destroyed in the mean while, thereby passing out of the category
not only of capital, but also of wealth). The total capital of the
country, then, is not the sum of one year’s capital added to that
of another; but that of last year reproduced in a new form this
year, plus a fractional increase arising from new savings. But,
once saved, capital can go on constantly aiding in production
forever. This plow when made is exchanged (if a plow is wanted,
and the production is properly adjusted to meet desires) for such
other products, food, means for repairing tools, etc., as give
back to the plow-maker all the commodities consumed in its
manufacture (with an increase, called profit).