3 A plough is so many loaves of bread partly made, while a loom and the engine which moves it are partly made coats; that is, society having determined to make some more bread those of the second active capital.' These prod ucts of human industry which owe their exist ence and their value, not to their power to satisfy immediately human desires, but to the great fact of the efficiency of serial production, are future goods.
Though material commodities only are ordi narily included in the term " future goods," it should be pointed out that there are other pro ductive agencies which are entirely analogous in their action. Andrews refers to some of them as " unembodied inventions," and cites the knowledge of chemical combinations used in the arts, etc. The patterns of a stove manu facturer, often very valuable, are of course fut ure goods ; yet if the patterns themselves were destroyed, they could usually be replaced at nominal expense by one who remembered their form. The result of an invention, whether of a pattern, a chemical combination, or a me chanical process is only under very exceptional and coats, is so far along in the work that it has made a plough, a loom, and an engine to propel it. —Patten, see p. 263.
Capital and its Earnings," in Publications of the American Economic Association, Vol. III., No. 2.
circumstances wholly embodied in a physical form. The improvement of agricultural land may take such tangible form as to be easily rec ognized as a material product — a future good ; or it may consist simply in an improvement in the quality of the soil. Labor may be expended in the erection of agricultural stations in order to increase production. The result is then clearly a future good — a product of industry. Essentially the same thing is done when labor is expended in the training of laborers to greater efficiency. The qualities of man are improved as were those of the soil in the illus tration given. Finally, labor may be expended in the production of future goods, such as machinery, tools, and factory build ings. It is better to reserve the term "future goods" for these material commodities, using the broader term " capital " to designate the results of all labor exerted before that which performs the final act of transforming the future into a present good. Capital is embodied labor, but it is labor expended beforehand in order to increase the produce. Viewing the production
of wealth, rather than its consumption, looking not upon man's pleasures, but upon the indus trial organization — we thus get a clear idea of capital and its function. It does not include the means of subsistence in the hands of their final consumers, or any commodities which will directly satisfy the wants of man and are desired by men on their own account.
Whether capital is a productive agency, is a question of economic theory over which a severe struggle has continued to the present day. The least that can be claimed for the productive power of capital is that the produc tive agencies are far more efficient where there is a relatively large stock of future goods in existence, where the serial method of produc tion is in full vogue, where a portion of the labor necessary to satisfy a man's desires is exerted long in advance of the period when the commodity is to be consumed.' It is evident that a society which maintains value of the unfinished commodity, the product of in dustry, depends upon the distance which separates it from the finished stage. When products are exchanged for produce, it is always at a certain advantage to the holder of the former, pro vided he is able and willing to sacrifice thus a lower degree of pleasure in the present for a higher in the future.
a judicious proportion between the quantities of future and present goods will add thereby greatly to the satisfactions which it may enjoy. But it is essential further that the various classes of future goods should bear to each other a certain proportion determined in each case by the requirements of the industrial or ganization. If the object be to bring coal to the consumers, the future goods called into requisition are, among others, mine machinery, road bed, and rolling stock. Individual pro ducers sometimes put too large a portion of the available energy into the construction of rail ways, leaving not enough free for the production of machinery or for the mining industry The expenditure of labor too long beforehand is not to be justified. Production will be most efficient when the quantities of labor devoted to the various classes of future goods are most nicely adjusted.