Manual of Political Economy/Book 1/Chapter 2
CHAPTER II.
THE REQUISITES OF PRODUCTION.
Requisites of production.THE production of every species of wealth requires the application of man's labour. The forces of nature, acting upon the materials of which the earth is composed, have created products from which wealth is immediately derived. The seams of coal were deposited without any human agency; but the coal is not available to satisfy any of the wants of life until man's labour has dug this coal from the mine, and placed it in those situations in which it is required. But labour, in order to produce anything, must have some materials upon which to work. These are supplied by nature, and may be termed natural agents. The steam-engine, for example, is fashioned out of metals, deposited as the result of certain forces acting in remote geological ages.
Labour, natural agents,Production, therefore, has manifestly two requisites—labour, and appropriate natural agents upon which this labour may work. But there is a third requisite, the necessity of which will, perhaps, not appear so self-evident. The casual observer might be very possibly satisfied to accept as sufficient the two requisites of production we have mentioned; for it might be said, Does not properly trained labour, acting upon suitable materials, suffice to produce the required commodity? But there is something which is requisite to this labour itself. The labourer must be fed. How can he be fed but by food which has been previously accumulated? This food also required the application of labour; therefore, since the labourer must be fed by previously accumulated food, a third requisite of production is suggested, for some of the results of past labour are required to be and capital.set aside to sustain the labourer whilst labouring. The third requisite of production, therefore, is a fund reserved from consumption, and devoted to sustain those engaged in future production. This fund is termed capital.
The early steps of a student in almost every science are met by certain obstacles; if he succeeds in surmounting these obstacles, his future progress seems to be insured.The young mathematician who obtains a firm grasp of the physical conceptions involved in the laws of motion, will comprehend with facility problems of apparently great mathematical complexity. The questions involved in considering the functions of capital, will test a man's capacity to master the principles of political economy. Success in the study of this science may be regarded as guaranteed to all who obtain a clear insight into the nature of capital.
Capital is the result of saving.There are certain fundamental propositions concerning capital which should be kept steadily and constantly in view. One of these is as follows:—Capital is the result of saving. This saving may not be primarily prompted with a view of assisting future production. The results of labour, however, are not rendered immediately available for consumption: the ploughman who ploughs the soil must wait for months before the wheat which his labour contributes to produce will be ready for human food; but the ploughman must be fed, and he is fed with food previously accumulated. The labourers, too, who have constructed his plough, must be fed on food which has been saved from previous consumption; for a considerable time must elapse before the harvest can be gathered from the soil which the plough has assisted in tilling. Capital, therefore, represents all that has been set aside from the results of past labour to assist present or future production. It will now be perceived that capital is as indispensable a requisite of production as either labour or appropriate natural agents.