The Positive Theory of Capital

The Positive Theory of Capital

The Positive Theory of Capital

The Positive Theory of Capital

Excerpt

In systems of Political Economy the word Capital and the theory of Capital are regularly met with in two distinct spheres; first, under Production, and, second, under Distribution. In the former case capital is represented as a factor or tool of production: as an instrument which men use to extort from nature the various forms of wealth unattainable by simple labour. In the latter case capital appears as a source of income or a rent fund; and we are shown how, in the division among the various members of society of that wealth which has been produced in common, capital acts like a magnet, drawing a portion of the national product to itself, and delivering it over to its owner: it appears, in a word, as the source of Interest.

When we are told that capital assists in the production of wealth, and then again that it assists in the obtaining of wealth for its owner, we are apt to jump to the conclusion that the two phenomena are intimately and essentially connected, and that the one is the immediate result of the other-- that capital can bring wealth to its owner because capital assists in the production of wealth. As a fact, Political Economy has taken up this idea only too readily and too completely. Captivated by the deceptive symmetry that exists between the three great factors of production -- Nature, Labour, Capital -- and the three great branches of income -- Rent, Wage, and Interest -- the science, from Say's day till the present, has taught that these three branches of income are nothing else than the payment for the three factors of production, and that . . .

Search by... Author
Show... All Results Primary Sources Peer-reviewed

Oops!

An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.