It often happens that the division between fixed and circulating capital is drawn with difficulty, some instruments belonging partly to the one, and partly to the other.Thus a horse employed for agricultural purposes is a part of fixed capital, while an ox may belong partly to fixed, and partly to circulating capital, as he is reared and fed, in part for the services expected from him as an animal of draft, and in part for the price his carcase brings.
The whole instruments owned by an individual, or a society, and comprehended under the terms a stock reserved for immediate consumption, fixed and circulating capital, have received the general appellation of stock.
All instruments, whether comprehended under the divisions capital fixed and circulating, or a stock reserved for immediate consumption, possess a capacity for supplying the wants, or saving the labor of man.But the wants which they supply, and the labor which they save, are in general not immediate, but future.Now we cannot estimate the same amount of labor saved, or wants supplied tomorrow, and five, or fifty years hence, as equivalent, the one to the other.Thus if we compare together a hundred full grown trees, and as many saplings, it may be, that, estimated in the supply they yield the wants of futurity, they are alike.If the former be cut down tomorrow they may yield a hundred cords fire wood, and if the latter be cut down fifty years hence they may yield the same.We should not nevertheless conceive, that they were equal the one to the other.What measure then are we to adopt for comparing them and other such instruments together, and thus finding an expression in a quantity of immediate labor for the whole capacity of instruments possessed by any community or for the whole stock of that community? The natural measure would seem to be the relative estimate, which the individuals concerned themselves form of the present and the future, that is, the strength of the effective desire of accumulation of the particular community.Thus in a community whose effective desire of accumulation is of strength sufficient to carry it to the formation of instruments of the order E, doubling in five years, an instrument, which at the expiration of five years yielded a return equivalent to two days'
labor, might fairly be estimated as equivalent to one day's present labor;if at the expiration of ten years it yielded an equivalent to four days'
labor, it might also now be rated at one day's labor, and so for other periods.This therefore is a mode of expressing in present days' labor the whole capacity of the instruments owned by any society which will be made use of in the following pages; and the terms, the absolute stock, and absolute capital of that society, will be employed to denote it.
The mode however in which the fixed and circulating capital and stock belonging to societies, is usually estimated, is different.It is usual to estimate the instruments belonging to any society, by comparing them with one another a~ they actually exchange, some particular commodity being made choice of as the standard to which all other instruments are referred.
To capital and stock estimated in this mode, the terms, the relative capital and stock of societies, will be applied.
In cases where the effective desire of accumulation of a community has had opportunity to work up the materials possessed by it into instruments of an order correspondent to its own strength, the absolute and relative stock must, it is obvious, agree; but, in cases where the accumulative principle has not yet had time fully to operate, the former will exceed the latter.Thus, were we to suppose the returns made by the whole instruments belonging to a society, or their total capacity, to be suddenly doubled, without any addition to the labor employed in forming them, the total absolute stock of the society would also be doubled, while its relative stock would remain unaltered.The relations of the several instruments possessed by it remaining the same, whatever commodity had been adopted as the standard, when applied to measure the others it would give the same results as before.
It never, indeed, can happen that any increase to the capacity of the instruments forming the stock et' a society, so great and sudden as we have supposed, can take place; but however small such increase, it would have a real effect, and would occasion a difference in the amount of the whole stock as estimated in the one or the other manner.Every such increase is effected through the operation of the inventive faculty, and we shall therefore refer the consideration of the effects flowing from it, until we come to treat of the phenomena resulting from the progress of that faculty.
