Principles of Political Economy: Abridged with Critical, Bibliographical, and Explanatory Notes, and a Sketch of the History of Political Economy
John Stuart Mill · en
(_b._) It follows from the above proposition also that taxes
levied on the rich, and paid by a saving from their consumption of
luxuries, do not fall on the poor because of a lessened demand for
commodities; since, as we have seen, that demand does not create
or diminish the demand for labor. But, if the taxes levied on the
rich are paid by savings from what the rich would have expended in
wages, then if the Government spends the amount of revenue thus
taken in the direct purchase of labor, as of soldiers and sailors,
the tax does not fall on the laboring-class taken as a whole. When
the Government takes that wealth which was formerly capital, burns
it up, or dissipates it in war, it ceases to exist any longer as a
means of again producing wealth, or of employing labor.
Chapter V. On Circulating And Fixed Capital.
§ 1. Fixed and Circulating Capital.
Of the capital engaged in the production of any commodity, there is a part
which, after being once used, exists no longer as capital; is no longer
capable of rendering service to production, or at least not the same
service, nor to the same sort of production. Such, for example, is the
portion of capital which consists of materials. The tallow and alkali of
which soap is made, once used in the manufacture, are destroyed as alkali
and tallow. In the same division must be placed the portion of capital
which is paid as the wages, or consumed as the subsistence, of laborers.
That part of the capital of a cotton-spinner which he pays away to his
work-people, once so paid, exists no longer as his capital, or as a
cotton-spinner’s capital. Capital which in this manner fulfills the whole
of its office in the production in which it is engaged, by a single use,
is called Circulating Capital. The term, which is not very appropriate, is
derived from the circumstance that this portion of capital requires to be
constantly renewed by the sale of the finished product, and when renewed
is perpetually parted with in buying materials and paying wages; so that
it does its work, not by being kept, but by changing hands.