Chapter 16 to divide

A man will seldom think of earning an income from his means if he has only enough to sustain him for a few days or weeks.He will consume it judiciously, and will hope, by his own labor, to acquire something to replenish it before he uses it up.In this case, his income is derived entirely from his labour.Most of the working poor in various countries live this kind of life. If all his means are sufficient to sustain him for months or years, he will naturally expect a large part of them to furnish an income; life.His whole wealth was then divided into two parts.That part of which he wishes to derive his income is called capital.The other part, for present consumption, consists of three things: (1) that part of the stock originally reserved for this purpose; (2) a gradual income, whatever its source; Items bought in the past but not yet used up, such as quilts, furniture, etc.Assets reserved for present consumption may consist of one, two, or all three of the three.

Capital that provides income or profit to investors can be used in two ways. One, capital can be used to produce, manufacture, or buy things that can then be sold for a profit.A capital so employed, while remaining in the hands of its owner, or in the same state, affords no income or profit to the investor.The merchant's goods cannot afford revenue or profit until they are sold for money; nor money until they are repaid for the goods.The merchant's capital is continually employed in one form and received in another; and it is only by means of this circulation, this continual exchange, that it is profitable.Such capital may therefore be called circulating capital.

Secondly, Capital may be employed in the improvement of land, in the purchase of useful machinery and implements, or in the acquisition of things which yield profit without changing hands or further circulation.Such capital may be called fixed capital. The proportions between the fixed and circulating capital which are necessary in different occupations are very different. The merchant's capital, for example, is entirely circulating capital.He hardly needs to use machines or implements, unless he regards the store or stack as such. Part of the capital of the craftsman and manufacturer must be fixed in tools.However, the size of this part varies from industry to industry. Some industries are small, while others are large.A tailor needs no tools other than a pack of needles.The tools of the shoemaker are more expensive, but limited in number.The tools of the weaver are much more expensive than those of the shoemaker.But the capital of this class of artisans is largely mobile, flowing out at first either as wages of the labourers, or as the price of raw materials, and then flowing in from the price of the product, which contains profit.

In other undertakings a much greater fixed capital is required.For example, in a large ironworks factory, it is necessary to spend a lot of money to set up iron melting furnaces, forges, and cutting yards.As far as the water suction machine and other various machinery needed for mining coal mines, the cost will be even more. As far as the farmer is concerned, the capital used to buy implements is fixed; the capital used to maintain workers and pay wages is mobile.The former he keeps in his hands to obtain profits, and the latter he pays out to obtain profits.The price or value of the livestock, like the implements, may be called fixed capital; the expense of keeping them, like the maintenance of labourers, may be called circulating capital.There are two ways for farmers to make profits, one is to keep the livestock, and the other is to pay the cost of raising livestock.However, the purchase and feeding costs of livestock that are only for sale and not for farming purposes should be included in working capital.Here, farmers rely on the sale of livestock for profit.In a country that produces livestock, sheep or cattle purchased for the purpose of shearing, milking, and breeding, not for the purpose of substituting farming or selling, should be called fixed capital; the method of generating profits here It's about keeping them.Their maintenance is circulating capital; here the method of earning profit consists in paying maintenance.When the maintenance fee is earned back, the profit from the maintenance fee and the profit from the overall price of the livestock will be provided in the price of wool, milk production, and breeding.The total value of the seed may also be called fixed capital.Although the seeds go back and forth between the land and the barn, they have not changed owners, so they have not really flowed.Farmers make profits not by selling seeds, but by producing products from seeds.

The total wealth of a country or a society is the wealth of its entire population. Therefore, it is naturally divided into these three parts, each with its own special function. The first part is reserved for present consumption, and its character is not to provide income or profit.Food, clothing, furniture, etc., which have been purchased by consumers but not yet fully consumed, fall into this category.Domestic houses for residential use only are also a part of this section.The means invested in a house, provided that the house is occupied by its owner, loses the effect of capital from that moment, that is to say, it yields no income to the owner.Such a dwelling, though useful to him like clothes and furniture, is like clothes and furniture as incapable of furnishing him an income.It is only part of expenses, not part of income.Renting a house and people can get rent, but the house itself cannot produce anything, and the tenant still has to pay the rent from income from labor, capital or land.Therefore, although it provides income to private owners, it has a capital effect, but it does not provide income to the public and cannot have a capital effect.It does nothing to increase the income of the people as a whole.Likewise, clothing and furniture sometimes furnish an income, and thus have a capital effect on particular individuals.Where masquerade parties are popular, there are people who rent out masquerade clothes for a night.Furniture merchants often let out their furniture by the month or year; funeral parlors let out funeral objects by the day or the week.There are also many people who rent out furnished houses and charge not only rent for the room, but rent for the furniture as well.In short, this kind of loan event happens everywhere.But the income from the letting of such things always comes in the last analysis from other sources of income.Moreover, it must be observed, that of all the means reserved for present consumption, both individually and in society, the slowest consumption is that part which is invested in houses.Clothes last for years, furniture for fifty or a hundred, but a well-built and well-kept house lasts for hundreds of years.But though it will be a long time before the house is consumed, it is still a stock for present consumption, like clothes and furniture.

The second part is fixed capital.Its characteristic is that it can provide income or profit without going through circulation or changing owners.It mainly includes four items: First, all useful machines and implements which facilitate and save labour.Second, all profitable buildings, such as shops, storehouses, workshops, farmhouses, sheds, barns, etc.This type of building not only provides income to the owner of the rental house, but also a means of obtaining income for the people of Nazuo.This building is quite different from a house.This is a business tool, and it should be considered a business tool.Second, the cost of improving the land, by clearing, draining, walling, fertilizing, etc., which are profitable, to make the land more workable.An improved farm is like a useful machine, which facilitates and saves labour; it enables the investor to afford a much greater income for an equal amount of circulating capital invested.Both are equally advantageous, but the machinery wears out more, and the improved ground lasts longer.The farmer needs very little maintenance of the land, save the capital which is necessary for cultivation according to the most expedient method.Fourth, the useful talents learned by all people in society.To acquire a talent, one must be educated, one must go to school, one must be an apprentice, and it costs a lot.The capital spent in this way seems to have been realized and fixed in the learner.These talents are, of course, a part of his property to him personally, and they are also part of the property to the society to which he belongs.The increasing dexterity of the workman may be regarded as a fixed capital of society, as are machinery and tools which facilitate and save labour.When studying, it is true that there is a fee, but this fee can be repaid and profited.

The third part is working capital.Its characteristic is to rely on circulation and provide income by changing owners.It also contains four items: First, currency.Relying on money, the other three can be turned around and distributed to real consumers.Second, the food that is owned by the butcher, the stockman, the farmer, the grain merchant, the brewer, etc., and who sells it at a profit.Thirdly, the materials of clothing, furniture, and houses, which are still in the hands of the tiller, manufacturer, cloth merchant, timber merchant, carpenter, bricklayer, etc.Whether these materials are pure raw materials or semi-processed materials does not matter; as long as they have not been made into clothes, furniture or houses, they belong to this category.Fourthly, Articles which have been made, but which are still in the hands of the maker or merchant, and which have not been sold or distributed to real consumers, such as are displayed on the counters of blacksmiths, woodworkers, goldsmiths, gemstoners, chinasmiths, and various other shops finished products.The circulating capital thus consists of food, materials, manufactures, and money in the hands of various merchants.The circulation and distribution of food, materials, and finished products must have money.Otherwise they cannot reach the people who end up using or consuming them.

Three of these four, food, materials, and manufactures, generally pass from circulating capital to fixed capital, or stock reserved for present consumption, within a year, or in a period longer or shorter than that. Fixed capital is transformed from circulating capital, and must be constantly replenished by circulating capital.All the useful machinery and instruments of business have their origin in circulating capital.Circulating capital furnishes the materials for the construction of the machines, and the maintenance of the laborers who build them.Once a machine is built, it often requires circulating capital to repair it.Without circulating capital, fixed capital cannot provide any income.The materials with which the work is done, the food on which the worker lives, come out of circulating capital.Without circulating capital, not even the most useful machinery can produce anything.The land, however improved it may be, has no working capital, and can afford no income.The laborer who maintains the tillage and harvest must also have circulating capital.

Fixed capital and circulating capital have the same purpose, and only one, namely, to increase and increase the stock reserved for present consumption.The people's food, clothing and shelter depend on this kind of wealth.The wealth of the people also depends on whether the wealth these two capitals can provide is abundant or poor. In order to supplement the fixed capital in the society and the resources for current consumption, it is necessary to continuously withdraw a large part of the circulating capital, and the circulating capital must also be continuously replenished.Without this servitude, working capital would soon dry up.This increase has three main sources, namely, the produce of the land, the produce of the mines, and the produce of the fisheries.Up to three resources are continuously supplied with food and materials.Some of them are processed into finished products.It is precisely because of this supply that the food, materials, and finished products drawn from the working capital year are newly replenished.In addition, the metals required to maintain and replenish the currency must be taken from the mines.Money, though, in ordinary cases, need not be withdrawn from circulating capital as fixed capital, or stock reserved for present consumption, yet, like other things, it is subject to wear and tear, and is inevitably exported to foreign countries, and must therefore be continually replenished, though in very small quantities. That's all.

Land, mines, and fisheries all require fixed and circulating capital to operate; the products of which must repay not only the capital thus invested, at a profit, but also all other capitals in society, at a profit.The food and materials consumed by the manufacturers are replenished by the farmers every year; the industrial products consumed by the farmers are replenished by the manufacturers every year.Although these two classes seldom exchange directly with each other manufactured and agricultural products, this is actually the case with the yearly exchange between them.We know that the farmer has corn, cattle, flax, wool; what he wants are clothes, furniture, tools.The person who buys corn, livestock, flax, and wool is not necessarily the same person who sells clothes, furniture, and tools.The peasant, therefore, first exchanges his native produce for money; and with the money he can buy wherever he wants manufactured goods.The capital employed in fishing and mining is also at least partly supplemented by land.Fishing from the water and mining from the ground are all inseparable from the products on the ground.

Where their natural productive forces are equal, the yields of land, mines, and fisheries are all in proportion to the magnitude of the investment and the good or bad employment of the funds.Where the quantities of capitals are equal, and the methods of investment equally appropriate, their output will be in proportion to the magnitude of their natural productive forces. In all countries where life is relatively secure, there is no man of common sense who is unwilling to employ the means at his disposal for present enjoyment, or for future profit.If it is used for present enjoyment, then it is money reserved for present consumption.If it is used to seek future profits, then the way to seek profits is either to keep the assets in hand, or to spend them.In the one case it is fixed capital; in the other it is circulating capital.I cannot believe that a man is not insane if he does not employ all the means at his disposal, whether own or borrowed, where life and property are fairly safe. If, unfortunately, the state is autocratic, the monarch is tyrannical, and the people's property is in danger of being violated at any time, then the people often hide most of their wealth.In this way, when the disaster they are always on guard against is imminent, they can take it to a safe place at any time.This is said to be the case in Turkey, in India, and, I believe, in other countries of Asia.In the era of feudal tyranny, this situation seems to have happened in our country as well.The treasures unearthed were regarded as a big income for the monarchs of the major European countries at that time.All things buried in the ground, whose ownership cannot be proved, are regarded as the property of the king, and unless the king's special permission is granted, it belongs neither to the discoverer nor to the landowner.This kind of treasure was very popular at that time.The same was true of gold and silver mines at that time.Gold and silver mines are not included in common land titles unless expressly licensed.Random mining is not acceptable.However, mines of lead, copper, tin, and coal are relatively unimportant, so they are allowed to be exploited by the people.Chapter Two: On Being a Society