Nature of Capital, The: A Rejoinder

The Quarterly Journal of Economics, November 1907, 22.1, pp. 28-47.

SUMMARY: The identity of capital and capital goods: is it admitted by Professor Clark? A difference as to knowing the existence and finding the explanation of the return on capital, A question of method: shall a theory of distribution confine itself to the present, or must it reach back to the past? The synchronizing effect of “capital” considered once more.

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In his reply to the criticisms which I have presented in recent numbers of this Journal, Professor Clark has pre­sented his views on the theory of capital with his wonted literary skill, and yet, I believe, without materially changing the scientific situation. He surpasses himself—if such a thing can be—in new and even more effective phrases, in order to secure the reader’s assent to propositions as to which my convictions remain, and will remain, unchanged, that they belong to the realm of phrase, and not to that of fact. I will not enter the field of repetitions. Never­theless, certain new terms and differences on the part of my honored opponent, even tho they contain no new views, are such that some discussion of them may, at least, serve to bring into clearer light the differences between the rival views, and so may facilitate the choice for the competent reader, to whom my opponent refers for judg­ment, as I gladly do myself. With this in mind, I will say something as to the remarks of my distinguished opponent.

In defence against my objection that his “true capital” is but a phantom, Professor Clark fortifies its reality, its corporeal character, with some expressions which are even more unequivocal than those which he himself previously used. He says now that capital is a mass of capital goods, not simply that it consists of such goods. He says further (p. 354) that at any mathematical instant there is no difference between capital and capital goods. I am entitled to assume that with these last words Profes­sor Clark means not only that there is equality, such as exists between twins or between two drops of water, but literal identity. At any mathematical instant, “capital” and the “capital goods’ which compose it are, in his opinion, identical things.

I welcome these expressions, which are fully in accord with my own views. But, in the next or second mathe­matical instant, is the situation different? Is not capital identical with capital goods at every instant? Can the whole course of time, in Professor Clark’s own opinion, ever bring an instant in which this identity does not hold and in which capital and capital goods appear as two different material entities? And, if this be not the case, what is to become of the theory that there are two things?1  Professor Clark, to be sure, finds himself face to face with the fact that the capital of to-day is not identical with the capital goods of yesterday, and he seems to think his artifice neces­sary in order to be able to deny this sort of identity,—the identity of capital with things which were tools or ma­terials yesterday or last year, but which now are either worn out or converted into consumable goods. But, surely, it could not escape the eye of so excellent an investigator that those things upon whose exclusion from capital he rightly lays so much stress have ceased to be capital goods. Things which once were capital goods are capital goods just as little as things which never possessed the qualities of a capital good. But, in order to deny the identity of capital with things which are not capital goods at all, it is surely not desirable, least of all logically neces­sary, to deny the identity of capital with capital goods.

Surely, the facts are very simple. Material things during a certain phase come into that temporary relation to human well-being in which, as productive goods or capital goods, they serve human needs in indirect ways. They do not remain in this relation indefinitely, but gradually pass beyond it, while other things in turn enter into this relation. The notion of capital includes always the goods which are in this temporary relation. Capital is not, and never can be, anything other than the whole of these goods. Professor Clark builds up for himself logical obstacles, which are in fact no obstacles at all, and thereby prevents himself from grasping these simple facts in an equally simple way, and, in order to find an escape from the difficulties which he has thus created for himself, turns to devices which are no less superfluous than they are inconsistent with the facts. He peoples the world of reality with a new kind of thing which, in fact, does not exist,—with a capital which has a real and “literal” ex­istence and which also is “something material,” and which, nevertheless, is something different from the capital goods. It is a capital to which Professor Clark believes himself entitled at a later time to ascribe effects of its own, which are not the effects of capital goods; and capital whose relation to capital goods, notwithstanding all the rich phraseology of its creator, never can be made clear to simple common sense.

For how can Professor Clark, side by side with the ex­pressions just cited, continue to define his true capital as “embodied value,” as ‘a permanent value in a shifting corporeal embodiment”? If capital, as he now unequivo­cally says, is a mass of capital goods, how can it be em­bodied in it? Seriously, can a thing be embodied in itself?

Professor Clark seems to be ever under the spell of his formula as to the permanence of true capital. He repeats again and again its “continuance” (p. 355): this sup­posedly unequivocal fact compels us, he thinks, to admit the existence of something different from capital goods. But is there anything so unequivocal in this formula? May it not be used loosely as well as strictly? Consider the example of the capital that lasts fifty years (p. 356): does he really maintain that there is a “continuance” of the same identical thing? If capital, which fifty years ago was ‘created” in the shape of a farm, exists to day in a grandchild’s possession in the shape of a stock of silks, can and will Professor Clark assert with full scientific accuracy that the material thing which was capital fifty years ago and the material thing which is capital to-day are identical material things?2  Those men of affairs on whose expressions and conceptions Professor Clark is dis­posed to base his scientific system would probably say, with more or less hesitation and evasion: “In a certain sense the grandchild’s stock of silks is the same capital as the grandfather’s farm; but in another sense it is not the same. The farm was an agricultural capital: the silks are something quite different,—a commercial capital.” It seems to me unmistakable that this infusion of sub­jective conceptions into the question of identity rests simply upon the play of our abstraction carried out in different directions. The varying answers are possible only because at one time “stress is laid” upon one circum­stance, at another time is laid upon another, because we disregard or abstract from all other changes except those on which for the moment we “lay stress.” An affirma­tive answer on this question of identity can be reached only if we make use of abstraction as against all the changes which, in fact, take place and destroy real identity. The identity of the capital that was created fifty years ago and of that now existing is not a brutal, unequivocal fact, but a flexible formula which can be adapted to the particular sort of abstraction which happens to be used.3

I must beg the reader’s pardon if I weary him. But I venture to ask Professor Clark, and, if it be not super­fluous, the reader also, to consider another concrete ex­ample,—a house. A house, like any other constituent of Clark’s true capital, is an entity whose existence continues notwithstanding change in its constituent parts. It can be repaired, sundry parts can be changed, new windows can be put in, a new roof added. It can be enlarged and rebuilt; can be taken to pieces and put up again; can be put up on the same place and with the same materials or with only partial use of the old site and the old materials. How long can we say that it remains the “same” house? Would one receive an unanimous answer to this question from all quarters, or a series of somewhat different answers, each one with its justification? Must we not receive dif­ferent answers according to the different point of view from which they were given? One sort of answer might come from the lawyer who had occasion to consider a mort­gage on the house, another from the historian who had to decide whether “this” was the house in which a poet died. The philologist, the physicist, the logician, each from his point of view might give a different answer. Each would abstract from all considerations except those relevant for his purpose. We thus might have half a dozen different answers on the question of identity. None the less, it is clear that we have not to do with six different material things, but with the result of six abstractions, each justi­fied for its particular purpose. Thus the formula as to the “continuance” of house and of capital rests not upon the solid basis of literally and unmistakably identical facts, but upon fluctuating subjective points of view. Hence Professor Clark may take comfort and assure himself that neither he nor economic science is under any logical compulsion to assume in the world of reality the existence of “permanent” things which correspond to his formula.

I must pay my homage to Clark as a man of letters. Among the endless analogies which might be chosen, he has selected, in his examples of the river Hudson and of the human beings who reach the age of fifty or sixty, pre­cisely those which might dispose the reader in favor of his view. As to his example of living beings, to be sure some­thing might depend as to one’s views as to their “identity,”—on one’s conceptions as to the “soul” and as to a ‘unit of consciousness” running through the various phases of life. These are considerations which cannot apply to the loose combinations of inanimate material things which we may elevate, according to our point of view, into “unities” or “entities.” Such considerations even in their own field support at the best a spiritual dualism, but no hypothesis of the co-existence of two material things. It is better to leave to the other sciences which have to deal with such problems the riddles as to life and soul, and not to import these into the consideration of the very simple facts which suggest no such riddles. I suspect I do no injustice to my opponent’s brilliant art of exposition by suggesting that he ever leads the reader to view the controverted questions through skillfully selected lenses which lead to that same optical illusion under which Professor Clark himself suffers and which he naturally wishes to impose on his readers.

I trust I have shown that the delusion so created disap­pears as soon as one steadfastly looks at other phases of the problem whose consideration my honored opponent has hitherto unremittingly avoided.

Doubtless all this belongs rather to logic than to eco­nomics. I cannot escape the impression that the logicians, in case controversy of this sort should arise among them, would dispose of it very summarily. I suspect that in the specialized field of logic a decision has long been reached in regard to controversies of this sort, in the shape of rules and examples for learners, so familiar that they are no longer worth discussing. But other parts of our contro­versy touch matters which belong, if not exclusively, at least in their main content, to the field of economics.

First of all, I would remark that my distinguished op­ponent has a different and a less exacting conception than my own as to what is the “explanation” of a phenomenon. Only in this way can I understand what he says (for ex­ample, on page 362) in a somewhat ironical and would-be victorious tone. He mentions that the money receipts of a plough factory must suffice to buy new emery wheels and other tools that are worn out, to replace what has been spent for wages, including wages of supervision, and, finally, leave something as a return on capital. Such facts no one denies, and, in order to convince me of their ‘correctness,” it was hardly necessary to adduce the “dis­coveries” which my honored opponent made in his own experience with such matters. But I confess I am unable to see why Professor Clark speaks of the “conclusiveness” of an insight into these facts. He seems to find in these facts an explanation, or at least a long step toward an explanation, of interest on capital: whereas I see in them only a statement of the facts to be explained. I can only ascribe it to the absence of a clear discrimination between the ascertainment and the explanation of a fact that, whereas I distinctly asked4  how the emergence of a net re­turn on capital was explained, Professor Clark ascribes to me an entirely different question,—namely, “how we know that there is any net profit whatsoever” (p. 362). That a net return on capital exists is obvious enough, and I have asked no question about it. Why a net return on capital exists is not obvious, and all Professor Clark’s experiences with his plough factory do not suffice to tell us.  Finally, those very detailed descriptions which Profes­sor Clark quotes at length (p. 357) from his book, with the illustrations of A, B, C, and H, tell us nothing about it. They form a very neat description of the division of labor and the parceling out of the steps in production. But they contain not a word of real explanation. They do not ex­plain, for instance, why the wages of the laborers in Group H (who, to be sure, cannot be clothed in the machines which they make nor live in the factories which they erect) do not exhaust the whole value of the commodities pro­duced by them. Everything that Professor Clark says about wear and tear, about replacement of capital, is simply a matter of description: it explains nothing.5  I might have cited this same passage of Professor Clark’s book to show that Professor Clark fails to undertake that investigation of the problem of rent, which I miss in his book. Professor Clark, very gently and politely, but none the less clearly, accuses me (p. 359) of not having given an accurate representation of his views. I fear that this accusation has no better basis than a constant confusion on Professor Clark’s own part between a simple statement of the facts, such as he has really given, and an explanation of the facts, such as he fails to give either in the passage which he has quoted or in others referred to by me. Further, Professor Clark, again in the way of correcting the remark made by me on page 259, lays stress upon his own statement that the share of the produce of a capital good which is needed to replace it does not go wholly to labor, but that part goes to capital (p. 360). I am glad to take note of this statement of his, but believe that a little misunderstanding lies in it. I had no intention of set­ting forth anything inconsistent with this statement. My reasoning rests upon the following undenied and un­deniable circumstances. In his diagram, Professor Clark treats as the product created by any added unit of capital, not the whole “gross product’’ of the co-operation of cap­ital goods, but only a part of that gross product; namely, that part which goes as net interest to capital. Now whatever goes as net interest to capital surely has nothing to do with the replacement or wear and tear: hence I concluded that Clark regards as the product of capital only that part of the total product which is free from any such claims, or, to repeat, the amount by which “the gross product exceeds what is needed for the replacement of the capital consumed in production.” Further, in his diagram, Professor Clark turns over to the laborers as wages every­thing which does not go as net interest to capital: whence I concluded that Professor Clark must have credited to labor the entire remainder of product produced with the co-operation of capital goods,—that is, that part which does not go as net interest on capital. I do not believe that Professor Clark would be disposed or would be able to raise any objection against this interpretation or reason­ing concerning his news.

On the other hand, I had no intention, as Professor Clark evidently assumes I had, to undertake any more exact statement as to how much Professor Clark would turn over to capital in his diagram as net interest. More particularly, I had no intention of limiting this amount to’ the sum which one particular capitalist would get as net interest; namely, that capitalist who conducts the last stage in production and who is the owner of the com­pleted capital good which yields a specified gross return. To put it more concretely, I am well aware that the gross yield of a spinning machine suffices to yield a net return, not only to the owner of the machine, but to the capitalists of the preceding stages who were concerned with the creation of the machine. In the language which is pertinent to the present discussion, net interest and wear and tear in the last stage of production are not identical with net interest and wear and tear of all the stages which lead to the final gross yield. I have no intention of ascribing any erroneous opinions on this subject to Professor Clark. Hence, as the attentive reader will see, I did not use the precise language which my honored opponent (no doubt in good faith) puts in my mouth—language which would have been in­accurate. I did not say, as Professor Clark intimates that I did, that that part of the yield of a capital good which is not net income “for its owner” goes entirely to labor. I made use purposely of more general expressions, which refer to the whole return necessary to bring both net inter­est and replacement of wear and tear.6

I must point out, however, that the whole question, whether Professor Clark ascribes to capital a larger or a smaller sum, lies outside the scope of my criticisms. These bore not upon the extent of the shares ascribed on the one hand to capital as net interest, on the other hand to labor as wages, least of all on any ascription of too little to capital or of too much to labor. Their essential point is that the process of imputation from which he adduces the emergence of interest is not clearly brought before our eyes at the decisive point. To repeat the expression which I have already used, a net return to capital, distinct from any wear and tear, appears in his demonstration as a com­pleted distillate, whereas the process of distillation by means of the apparatus of imputation is not made clear.

“By the means of the apparatus of imputation”: in these words I find the essential point of difference be­tween them. Professor Clark has promised to explain in­terest through the rules of imputation, and, as I still must believe, he has failed to keep his promise. Whenever he applies his apparatus, whenever he uses arithmetical or geometrical modes of stating how much in the way of product is gained or lost with the increase or diminution of a factor of production, he is silent on the subject of gross and net yield of capital, and evades any explanation of the relation between them. Where he says anything at all on this subject, he no longer applies the apparatus of imputation. We find in his book sometimes examples of complete disregard of this crucial step and sometimes remarks in which there is lack of explanation and proof.

These omissions do not seem to me to be repaired in what Professor Clark now says in the latter part of his reply (p. 360). Is it any explanation of interest to say that one “finds” that the “plus quantity,” which is due to the presence of capital, exceeds the” minus quantity,” which is the result of wear and tear? And, notwithstanding all the objections of my honored opponent, are we not still in the domain of the arithmetic of magic, when it is said (on page 361) that the entire gross product is due to the exist­ence of capital goods, and yet (on page 362) that only a much smaller product is due to the existence of the self-perpetuating mass of capital goods, namely, the net prod­uct, diminished by the amount necessary for replacement? In whatever way Professor Clark pictures the relation be­tween his true capital and his capital goods, it is certain that the mass of capital goods on page 362 can be no less than the capital on page 361, since between both there is, at least for a mathematical instant, complete identity. Without magic, how is it possible to ascribe to the existence of “a mass” of capital goods another and smaller product than to these same instruments or capital goods of which this mass consists? Is it a solution of this problem (a problem which I believe to be insoluble) or is it simply a bit of arbitrary procedure, if in the considera­tion of a mass of capital goods one part of its product is cut off at once and treated as if it did not exist? Does the fact that a flock of sheep must be slaughtered in order to get the mutton diminish the quantity of meat due to the flock? Has a married couple which brings five chil­dren into the world, and thereafter goes the way of mortals, bred only three children? The very laborers suffer a sort of wear and tear; to put it in other words, there is necessarily a consumption of goods and products, in order that their productive efforts should be maintained. Would Professor Clark maintain that this consumption is to be reckoned as a “minus quantity” or a “negative product” in the process of imputation, and that the “laboring forces” (it will be recalled that he distinguishes between the con­crete workmen and the “working” or “laboring force”) bring forth as the product of labor a share diminished by this waste?

How much product is due to an existing mass of capital goods is one question. Quite a different question is what factors bring about the existence of this mass of capital goods. This second question is not to be confounded with the first, not even in the way of a compensation. If Professor Clark had followed the strict rules of imputation in their natural sequence, he would certainly have come across those really difficult parts of the problem of interest to which I have called attention in my criticism and of whose evasion I accused him. Professor Clark con­founds the two questions. A part of the product, which is in fact produced by a “mass of capital goods,” he fails to ascribe to that mass. On the other hand, If I under­stand his mysterious calculation, he ascribes to it some­thing else which, in fact, it has not produced, but which has been produced by other factors in production; namely, its own existence. He does this by means of its inherent “self-perpetuating” or” sell-renewing” quality.

On the proper mode of investigation in our subject and as to what constitutes an inadmissible ‘evasion,” Pro­fessor Clark entertains opinions diametrically opposite to mine. These opinions he has supported by reasoning which seems to me the most dubious part of his rejoinder. He believes that the problem of distribution which must be considered in our own day, and as to which social parties are especially in conflict, is how the product flowing from present production is divided between present labor and now existing capital. In the solution of this problem he believes we have nothing to do with past activities or past claims, which to be sure, are to be investigated, but in­vestigated separately. The method of isolation requires us to avoid a confounding of the problem of the present with any problem of the past. My suggestion that the inquiry as to distribution be extended to those factors to which the existence of present capital is due he regards as due to a “confusion” resting on the simultaneous examina­tion of two different periods (pp. 364, 365).

To this I reply as follows. Nearly all theories of dis­tribution, and, more particularly, the theory of my dis­tinguished opponent, rest the claims of the several pro­ducers on some sort of relation to the product whose ex­istence is due to them. The fundamental ground of justi­fication is not that the immediate present decides as to the distribution of those things which at this same present are available. This perhaps would be the method of distr­ibution for a band of robbers who proceed at once to the division of the booty before them. Distribution in its economic sense, takes place among those who have taken art in the creation of the product and in such quotas as correspond to their contribution. No one has stated this principle more clearly and distinctly than Professor Clark himself. The gist of his whole theory of distribution is that each factor of production reaps that which is due to its contribution to the joint product.

I ask, is it in any way possible to deny or disprove that a coat ready to-day has been created partly by the farmer who bred the sheep, the spinner, the weaver, and so on? This is surely so, notwithstanding certain peculiar views of Professor Clark’s, of which again I shall have occasion to say something elsewhere. But my opponent can­not deny that a consideration of the part played by these ‘reparatory operations and of the share of these pre­paratory workers in distribution belongs to the theory of distribution, and is not to be set aside under the pretext hat it is all a matter of the past. Is the creation of a consumable commodity—setting aside a negligible few f the very simplest products—ever the work of a mathe­matical instant? Is it not always the fruit of a process of production which runs through time and in which the co­operating factors succeed each other? And, this being the case, must not the operations gone through for the comp­letion of a consumable commodity be necessarily of the “past” kind,—in the case of the coat everything except he very last stitch of the tailor? Is this not as certain as is that the beginning and the middle of a piece of work must precede the end, and that cause must precede effect? And is not, then, a theory which bases distribution on the contributions of the factors of production necessarily de­prived of its foundation if the contributions of the past are disregarded merely because they are past?

Professor Clark speaks of a mixture of periods. Now what is the period to be whose limits we are to regard with such scrupulous respect? Literally one day, that “to­day” of which Professor Clark so often speaks? Or, perhaps a longer period? A week? A month? A year? Is there any essential difference between the nature of the contribution from the labor of yesterday and that of last week or of last year? Does not each of these labors contribute to the joint product, and must not each one of them, in precisely the same way, be incorporated in an “existing capital good”? Is not yesterday’s stitch of the tailor incorporated in the nearly finished coat in precisely the same way as the labor of the shepherd was incorporated in the successful stages of wool, yarn, and coat? Surely, the length of time of this incorporation is not material.

Or is it perhaps a ground for distinctions that the inter­mediate product has a name of its own,—wool, yarn, cloth,—or that it has been put together in a different work­shop from that whence the final consumable commodity issues? Any one of these views surely quite misunder­stands the nature of the division of labor as a form of social co-operation. I know not which one of them to ascribe to my honored opponent. I can only ask again, What should decide the measurement of the period beyond which we are not to follow the share of labor in the creation of a final product without incurring the reproach of an inad­missible “confusion”? Nay, is it not clear that, when Professor Clark accuses me of confounding between periods in industry, I am really sticking to the subject which he has himself set before us? He tells us that the product is to be distributed among all the factors that co-operate in its creation. These factors in truth succeed each other: we cannot do otherwise than to consider factors which are not contemporaneous and which act in different periods.

Professor Clark, finally, says something about “past claims” and of a “problem taken from the past.” No doubt the shepherd who tended the sheep in a past year has been paid for his co-operation long ago. But would my honored opponent still speak of past claims and past problems if, what is by no means an impossibility, this shepherd had not yet been paid? Would it not be unmis­takably clear in this case that a factor whose contribution was made in the past, nevertheless must be considered in the distribution of the present? Would it not, then, be obvious that an investigation is unavoidable as to the contribution which this earlier labor had made to present product? And that such an investigation is by all odds pertinent in order to ascertain how the present product is to be divided? Is this investigation perhaps superfluous or modified in its essential outcome, because a payment of wages has already been made for this earlier labor? More particularly for such a doctrine as Professor Clark’s, is not this payment to the earlier labor to be measured accord­ing to the contribution which that labor has made to the final product? And does not therefore, the payment of that previous labor involve the ascertainment of the con­tribution of that previous labor? In fact, Professor Clark rests his whole scheme of distribution on the answer to a simple question of fact; namely, what part of a joint prod­uct is to be ascribed to each individual co-operating factor. Can the answer to this fundamental question be changed one iota by the circumstance that one of these co-operating factors has received payment in advance of the share due to it under this scheme? Can it suddenly cease to be true that this earlier labor, already paid, has co-operated in the creation of the coat, and is its co-operation more or less effective than it would be if the laborer had not been paid in advance for the product due to his labor? The same question arises as to the share due to this past labor, whether the laborer appears in person or whether some representative appears who has paid him off and presents his claim.

The crucial question then arises, does the fact that an earlier factor in production, say labor, has been paid and disposed of, make a change in the extent of its claim on the present product which it has aided to create? We must ask whether the laborer who has created an “existing capi­tal good” may ascribe to himself the whole, or not so much of the whole, as is contributed by this capital good on its utilization by the person who has entered on its posses­sion. Is this only a problem of the past, an historical or antiquarian inquiry, with no bearing on the actual problem of distribution? Does not the answer involve the further inquiry whether a difference arises, something which is in reality, or apparently, deducted from the imputation of product to this past labor and which ensures to the possessor of an existing capital good? Laborers to the present are as much concerned with the answer to this fundamental question as those laborers of the past who have already been paid or disposed of; for they will have precisely analogous claims on the product of the future. Is it per­haps to be supposed that the laborers, when they ask this question through those advocates who present their theo­retical claims, are to be told first that their question comes too early, and next that it comes too late, but that it never is pertinent to the problem of existing distribution? The inquiry, in this view, would come too late if it bears upon the earlier labor which contributed to present labor; for then the only question is as to “past” labor, which is no longer to be considered in the existing problem. It would come too early if it bears upon the claims of present labor to the future product; for then the question is as to claims on that future product which, according to the view I am combating, is not yet to be considered. That very instant at which the future product becomes present and at which this essential condition for the existence of a present prob­lem is fulfilled, that very instant the problem at once ceases to be, since the previous labor has already disap­peared in the past!

The peculiar and, in my judgment, dangerous conception to which my honored opponent holds, has its roots in his no less peculiar views on the whole subject of past and present in the process of production. I have already stated that I do not believe Professor Clark expressly to deny that the earlier labor of the shepherd has contributed to the coat now in existence. But, if I may so express it, he seems to think it equally true that this co-operation comes from the present labor of the shepherd who now is herding his sheep. The “synchronizing” effect of capital is supposed to bring it about that we can enjoy to-day in the form of consumable commodities the fruit of labor which is to-day still exercised in the preparatory stages.7  I have already set forth at length what my views are on this subject (p. 265). What Professor Clark says in his last article calls or no further reply. I am unable to see that he has really met my objections. He contents himself with repeating certain propositions which, I believe, I have shown to be quite untenable. I find again such familiar phrases as these: “If society does not insist on the coat made of that particular wool, but on a coat of some wool equally good, it can have it to-day in consequence of the labor of to-day”; or again, “I can have the water I need at once. Pumping water in at one end will cause an outflow at the other.” As the context indicates, Professor Clark means here that a simultaneous outflow is brought about.

I believe the words which Professor Clark italicizes are not justified. I do not deny that the desired commodi­ties are in fact obtained, under the conditions described by Professor Clark, without waiting; but they are ob­tained not in consequence of to-day’s labor, not in conse­quence of present pumping, but because they have been made ready by a chain of operations extending through the past. To follow his own simile, labor applied to pump­ing in the past has already filled the pipes. What the labor of the instant secures is not a present provision of completed commodities, but the continuance of provi­sion at some time in the future. The ground upon which I rest this view I have stated with great fulness in Part IV of my earlier article (pp. 265 seq.), and I find no answer on the decisive point. My honored opponent turns the discussion to another point, which is quite im­material, when he says that under the supposed condi­tions ‘society gets what it wants.” This much is easy of proof, for, under the assumptions made, a stock of goods is already on hand due to previous labor and already con­taining in completed or nearly completed form what “so­ciety wants.” But this in no way proves that society gets its present provision not from past labor, but from present labor. To show this, my honored opponent applies again all the resources of his dialectics, which, brilliant as they are, constitute no proof.

Professor Clark refers to a forthcoming work of his, in which his theory is to be further developed. I await it with all due interest. It will without doubt enrich our science. But it will be doubly welcome to me and to many others if it is quite clear and precise, especially as to the writer’s meaning on every point on which the author of a connected theory of capital ought to have an opinion and to express it. The more clearly each link in a chain of thought is described, the better can we see whether they all fit together and form a tenable whole.

• 1Professor Clark maintains even more strongly than before that capital also is a material thing, On page 369 he speaks of it as “a very literal and material thing.”
  The page references in this article are to vol. xxi. Of this Journal; to my own articles in the issues for November, and February, pp. 1-2, 247-282, and to Professor Clark’s reply in the issue for May, pp. 351-370.
• 2As to the material quality of  Clark’s capital, see the foot-note preceding. 
• 3Incidentally, I would remark that I do not share Professor Clark’s opinion as to the complete change in the thought and speech of every-day life which, in his view, must set in if my opinion should prevail.  I am in no way opposed to the use of abstract conceptions, which are indispensable alike for the man of science and the man of affairs, nor am I opposed to the use of figurative expressions.  But I am opposed to any practice in science of using abstractions and figures of speech as if they were realities.  In any case it is not to be believed that any man of affairs would accede to Professor Clark’s views, and seriously be of opinion that, when he owns a factory, his property consists of any other “material thing” than the capital goods of which the factory consists. 
• 4See pages 261, 203.
• 5It is significant that Professor Clark himself introduces this quotation with the remark (p. 357) that in it the mode in which capital good provides for the emergence of its successor is described.
• 6I beg to refer the reader to what I said on page 254 in the text and on the pages 254 and 256 in the notes, where it will appear how carefully I refrained from undertaking any numerical expressions of Professor Clark’s precise method of imputation.  On the details of this method I am still in the dark, and any version of my own might not be in accord with Professor Clark’s intentions. 
• 7At the very beginning of what he has most recently said on this subject, on page 366, Professor Clark makes some remarks on the synchronizing function of capital, the precise wording of which might intimate that Professor Clark goes less far than his previous expressions on this subject have steadily gone.  But I have no doubt that the use of these weaker expressions in this one passage took place only by accident, and that Professor Clark has no intention of withdrawing or weakening his often-stated doctrine.