58 NATURE OF CAPITAL AND INCOME [Curae IV 
line to be drawn? Are we to say, for instance, that capital 
is that wealth whose use extends beyond seventeen days? 
And as all wealth is for future use it is also, by the same 
token, all a “reserve.” To call capital a reserve does not, 
therefore, in strictness, delimit it from other wealth. Even 
a beggar’s crust in his pocket will tide him over a few hours.! 
Equally futile is any attempt definitely to mark off 
capital as that wealth which is “productive.” We have 
seen that all wealth is productive in the sense that it yields 
services. There was a time when the question was hotly 
debated what labor was productive and what unproductive. 
The distinction was barren and came to be so recognized. 
No one now objects to calling all labor productive. And 
if this productivity is common to all labor, it is equally 
common to all wealth. If we admit that a private coach- 
man is a productive worker, how can we deny that the 
horse and carriage are also productive, especially as the 
three merely cooperate in rendering the very same service, 
— transportation ? 
Finally, we cannot distinguish capital as that wealth 
which bears income. All wealth bears income, for income 
consists simply of the services of wealth. But the idea 
that some wealth bears income and some not has been per- 
sistent from the time of Adam Smith, who, meaning by in- 
come only money income, conceived capital as the wealth 
which produces income in this sense, as distinguished from 
the wealth, such as dwellings, equipages, clothing, and food, 
which dissipates that income. A home, according to him, 
is not a source of income, but of expense, and therefore can- 
not be capital. 
§ 4 
In these and other ways have economists introduced, in 
place of the fundamental distinctions between fund and flow, 
and between wealth and services, the merely relative dis- 
! See the writer's “Precedents for Defining Capital,” Quarterly 
Journal of Economics, May, 1904, p. 404.