pictures, and the infinite variety of instruments of production and objects of consumption!
This estimate of living capital is no doubt open to question, both as regards the principle on which it is based, and the actual figures adopted. But the important point to observe is that it is as well founded and as useful as the corresponding estimate of capital in the narrower sense of the term.
It may be well to restate the general principle in the light of the conclusion. There are two main positions. First of all, the people of the country are regarded (like the dead capital) as earning so much income. There can be no question whatever that the part of the national income due to personal exertion of all kinds is far larger than that derived from the pure interest on previous accumulations, or from the rent of appropriated natural agents. The relative proportions assigned, it may be remarked, might have been set down still more in favour of 'living' capital if other considerations had been allowed for, as, for example, the 'abstinence' involved in saving. It seemed best, however, not to carry the analysis beyond the point already accepted in the corresponding estimate of 'dead' capital, which has always been kept in view.
Exception may, no doubt, also be taken to the method of capitalising this income; but in a stationary, and still more in a progressive, state of society, it seems legitimate to look upon this income as derived from permanent sources—in short, to acknowledge that life is as permanent as land. Now, in capitalising permanent kinds of income, where, from the national point of view, risk may be omitted, the rate of interest must obviously be the basis, and at present thirty years (or even thirty-three) may be fairly taken.
But secondly, just as Mr. Giffen and others give a value to that part of dead capital which does not yield income (e.g., the furniture in houses), so a value must be given to 'living' capital simply as a permanent source of enjoyment. Here the natural basis (seeing that exchanges of this kind of capital are not now made) seems to be cost of production. As regards the precise method to be adopted, opinions may differ; my own choice was influenced largely, apart from the reasons already given, by the idea of making the comparison with the dead capital as close as possible. A more accurate method, however, might with some difficulty be founded upon aggregate national estimates of various kinds of annual consumption, expenses of education, and the like.
The uses to which the general result may be applied, after
