Front Page Titles (by Subject) CHAPTER V.: On Capital and Land. - Letters to Mr. Malthus, and A Catechism of Political Economy
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CHAPTER V.: On Capital and Land. - Jean Baptiste Say, Letters to Mr. Malthus, and A Catechism of Political Economy 
Letters to Mr. Malthus, on Several Subjects of Political Economy, and on the Cause of the Stagnation of Commerce. To Which is added, A Catechism of Political Economy, or Familiar Conversations on the Manner in which Wealth is Produced, Distributed, and Consumed in Society, trans. John Richter (London: Sherwood, Neely, and Jones, 1821).
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On Capital and Land.
Is it sufficient for an undertaker of industry to have the talents and judgment which constitutes his industry?
No: his judgment and his talent would be exercised upon nothing. He must possess, besides those, the materials on which he would employ his industry, and the indispensible implements to carry it into effect. All these things have a value previously acquired, and this value is called capital.
I thought that capital was a sum of money, and not materials and utensils?
The value of a capital at the moment in which it is borrowed may have the form of money: but it has it only transitorily, in the same manner that the corn which a producer of corn desires to exchange for cloth, is exchanged in the first place for money, which is to be again exchanged for cloth.* The values which we save, in order to be employed as capitals are, in the same manner, products which we successively exchange for money, and when we desire to use them as capital, we exchange them again for products necessary to production.
You say that capital is composed of products, that is to say, of things or values produced by the industry of man: a capital is then always a value which is moveable?
No: the products of human industry may be either moveable or immoveable. A house is a product of human industry. In works of agriculture, besides the value of the land, which may be considered as a great and admirable instrument in the hands of man, and which, on this account, makes part of his capital, the clearings, the buildings, and the inclosures, which are improvements of this grand instrument, are products of industry.
Are there not also moveable values in the capital of an agriculturist?
Yes; the implements of labour, the cattle, the seed, as well as the provisions for his family, his servants, and his animals: and even the money that is destined for the outgoings which his undertaking requires.
Tell me of what the capital of a manufacturer; a weaver, for example, consists.
It is composed of the value of his first material, which may be either cotton, flax, wool, or silk: also of his looms, shuttles, and other implements: and, in fact, of every value which he is obliged to advance for his own maintenance as well as that of his workmen.
If the value of the capital is employed in the purchase of all these things, how is it that it is not lost?
Because the result of all these things is a ribband or a cloth, the value of which reimburses the capital, and pays besides to the weaver the profits of his industry. In the same manner, the capital of the merchant consists principally of the value of the merchandise in which he trades, and this merchandise, augmenting in value in his hands, represents at all times his capital increased by his profits.
How does a man, engaged in industry, know whether the value of his capital is increased or diminished?
By an inventory; that is, by a detailed account of all that he possesses, in which every thing is valued according to its current price.
[* ]See Chapter I. on the Use of Money.