International Finance by Hartley Withers
page 8 of 116 (06%)
page 8 of 116 (06%)
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hands of those who have somehow managed to seize it; but is in fact so
necessary to all kinds of industry, that those who have amassed it, and placed it at the disposal of industry render a service to society without which society could not be kept alive. For capital, as has been said, is money saved and lent to, or employed in, industry. By being lent to, or employed in, industry it earns its rate of interest or profit. There are nowadays many wise and earnest people who think that this interest or profit taken by capital is not earned at all but is wrung out of the workers by a process of extortion. If this view is correct then all finance, international and other, is organized robbery, and instead of writing and reading books about it, we ought to be putting financiers into prison and making a bonfire of their bonds and shares and stock certificates. But, with all deference to those who hold this view, it is based on a complete misapprehension of the nature and origin of capital. Capital has been described above as money put to certain purposes. This was done for the sake of clearness and because this definition fits in with the facts as they usually happen in these days. Economists define capital as wealth reserved for production, and we must always remember that money is only a claim for, or a right to, a certain amount of goods or a certain amount of other people's work. Money is only a title to wealth, because if I have a sovereign or a one-pound note in my pocket, I thereby have the power of buying a pound's worth of goods or of hiring a doctor to cure me or a parson to bury me or anybody else to do anything that I want, up to the buying power of that sovereign. This is the power that money carries with it. When the owner of this power, instead of exercising it in providing himself with luxuries or amusements, uses it by lending it to someone who wants to build a |
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