6. Are men wealthy in proportion to the money they have? Are countries?
7. Would a nation be poorer if, like Sparta, it prohibited all money?
Chapter 14. The Money Economy and the Concept of Capital
1. Are national bonds or promissory notes, wealth?
2. Is it money or things that the borrower wants?
3. If you were starting a factory on credit, would you rent the machines or buy them with borrowed money? Why?
4. When a man says he has a certain capital invested in his business, does he mean to include the value of the land and buildings?
5. What is the meaning of the phrase, "a capitalistic age"?
Note.—We are indebted to the economic historians for a better understanding of the important influence money has had on economic organization. See Hildebrand's notable article in the first number of the Jahrbücher, and Ashley, English Economic History. J. B. Clark was the first among contemporary economists to emphasize the value concept of capital. The scholarly and judicial article by Irving Fisher on "Precedents for Defining Capital" in Quarterly Journal of Economics, May, 1904, makes possible better understanding and agreement on the subject. I am pleased to say that in this article, and in personal correspondence, Professor Fisher disavows the interpretation I had thought (see "Recent Discussion," etc.) that his words required. His conception of capital is thus, in essentials, the one here employed, differing from it not in thought, but merely in terminology. Professor Fisher's original studies of the capital concept, in the Economic Journal in 1896-7, are indispensable to an understanding of the development of this important phase of the new economic theory. The connection between the conclusions of economic history and the value concept of capital in economic theory has been made by the author in essays before cited under chapters 6 and 8: "Recent Discussion of the Capital Concept"; "The Next Decade of Economic Theory," and "The Relations between Rent and Interest."