we understand the economic principle that there can be no production without capital; that if the working reserves of a community are really impaired, the productive force is also straitened.
It will be said that consumption is rather the product than the cause of abundance. Undoubtedly, use is greatly increased by abundance; there is, in fact, action and reaction, the one stimulating the other. It will also be adhered to by some that capital is the sole source of production. Assuredly capital is not fixed in activity, nor are human energies rigidly limited; and as the resources of Nature are fairly boundless, wealth is wrought out of her bowels in our mines, and extracted from her chemistry in our fields, to an extent immensely determined by the demands of consumers. In the old fable of the purse of Fortunatus a gold piece appeared as rapidly as the contents were withdrawn; in the new purse of Fortunatus, called production, two or more pieces appear as rapidly as one is withdrawn; but we must not lose the purse, which let us consider as capital.
There is something more to be said about national extravagance. What is it that railways, and bridges, and canals, and fine buildings, cost? We hear continually the money-price mentioned. This is most misleading. The price paid is simply a sum of money that has changed hands; it represents the cost of the structures to those who built them, but not the cost to the community. What is this cost? What does a church or a railway cost the people as a whole? Some have paid wages, and some have received wages. This is only diffusion. Some money has gone for stone, iron, and timber, but this is only diffusion. The community is less this iron, stone, and timber,[1] but we have already seen that, as the production of this material is unlimited, no practical loss is inflicted here. It is asserted by all economists that food and clothing for the laborers are part of the cost. But the laborers would have been fed in any case, although they might have held on to their old clothes longer, had not the wage-fund been distributed among them. Now, to our mind, the real cost of this church or railway is the cost of the energy that might have been more profitably employed elsewhere. If all the productive industries are in full operation; if it is released labor, and the material is not required for more necessary purposes, then it cannot be shown that the church and railway have impaired the wealth of the community at all—that is, it cannot be shown that they have fundamentally cost the community anything. They were erected by released energies, by labor not otherwise required, and the community is not the poorer by a mite in consequence of their construction. A church may be a very extravagant undertaking for those who pay the money-price for it; the
- ↑ An exception must be made with timber. We are, in America, encroaching upon the forests, and hence consumption is now making this staple dearer; but, when all our hill-sides are covered with planted forests, the normal rule will operate in this product as in others.
