IT is necessary at this point in our demonstration to pause for a moment to see if we can find some criterion for determining, in a short-hand kind of way, at what point in the scale of Production the fixed capital of a nation, which embodies the powers of Nature from which alone savings are made, ends, and where the merely consumable goods circulating on the wheel, and which form no part of the wealth of the nation as such, inasmuch as they are already implicitly contained in this fixed capital, begin; as the solution will enable us to put our finger with more definiteness on the cardinal principle of the philosophy of savings which, constituting as they do the increase of wealth of a nation, must be the main object of the Applied Science of Political Economy. And this criterion I think we shall find in two elements equally essential; - the one the element of relative permanence, in the sense that the economic product will retain its economic value long enough for the world-market to found practically reliable predictions on it, and so be able to economically manipulate it, and realise credits on it; the other, that it will be able over the whole period covered by that relative permanency to liberate definite amounts of the wealth-producing powers of Nature when called upon; provided always that calculable provision can be made for the expenses of wear and tear.

But before proceeding to this, we must first consider how it stands with an individual trader, as distinct from the nation as a whole. Now in the ordinary bankrupt assets of an individual farmer, manufacturer, wholesale dealer, merchant, or retailer, you can not only realise on his money, his credits, and his fixed capital, but also in the case of the wholesale dealer or retailer on his consumable goods, down even to his moth-eaten clothing or damaged fruit, provided always you limit sufficiently the period of time that is to be understood by relative permanency; for I doubt not that a Covent Garden fruit merchant, or the coster-monger retailing that fruit in some side alley, could realise something at least in the morning on what if not sold would be quite worthless by the evening. But with a nation it is different, and some light perhaps will be thrown on our problem of where the fixed capital of a nation ends, and where the consumption that is already included in it begins, by a consideration of the question as to what extent the land, the population of a country, and its stock of cattle, etc., figure as fixed capital in different stages of civilization, and to what extent not.

Now in pastoral ages and among nomadic tribes, where the land was unenclosed and uncultivated, and the peoples that roamed over it were always striking their tents and moving on, leaving the land over which they were passing behind them, it was only the cattle, sheep, or other live stock that could form the 'fixed capital' in which savings could be made, and on which tribal credits could be drawn, as it was in these alone that the economic powers of Nature on which these people could draw were centred and embodied; while the land itself, which in the natural order is the fruitful womb and mother of all this live stock, was reduced to the position of a mere temporary accompaniment, as it were, without value; so teaching us that it is only in those forms of fixed capital which have economic as distinguished from natural permanency that the savings of a nation can be made, and against which credit obligations can be drawn. In the ages of Slavery, again, where the land is in permanent cultivation, the slaves can be added to the land as an element of fixed capital in which savings can be made, inasmuch as they too have a relative permanence in the normal period of their working lives, and are as transportable from one nation to another as gold and silver, as was seen in ancient Greece and Rome. Herds of cattle and flocks of sheep, again, also have a relative permanency like the slaves, and are transportable like them, and are therefore to be counted as fixed capital, and as a national asset can be assessed either independently of the value of the land, owing to their independent reproductive powers, or if included in the value of the land would give it as an adjunct of fixed capital a higher value, precisely in the same way as if these lands had been improved by drainage, outhouses, fences, and manures.

In the Middle Ages, again, when the land had become the permanent home of men, and not as in the pastoral ages their temporary resting place, the labouring population who were bound to the soil as serfs, could be counted as part of the fixed capital of the nation to which they belonged with the live stock, either separately as having an independent relative permanency, or lumped with it and giving it an additional value as a national asset.

And now we have specially to ask, how does it stand with the free Working Population of Modern Times with whom we are here mainly concerned? Are they to be regarded as an independent species of 'fixed capital' that has to be counted separately in any inventory of a nation's wealth, or are they already implicitly included in it like its corn and wine and consumable goods generally. The question is important, inasmuch as in the theory of the Orthodox Economists the working population figures merely as an appendage of capital, and as already counted in it, quite as much so indeed as if they were consumable goods. For it will be remembered that it is one of the fundamental propositions' of the Orthodox Economy that the working population is fed and kept and paid out of capital. It is true that it is out of 'circulating capital' that they are represented as being paid for their services, in the form of the food, clothing, etc., which their wages buy. But as these, although called 'circulating capital,' are already as we have seen included in the fixed capital of the nation, none of them can be counted again as a separate asset, any more than the baker's bread can be counted as well as his flour, or the weaver's cloth as well as his yarn.