56 NATURE OF CAPITAL AND INCOME [Crar. IV 
land* and all natural agents under capital. Bohm-Bawerk,? 
while agreeing that it must be a product, insists that it 
must not apply to a finished product. Marx * denies that 
capital is productive. Bohm-Bawerk * admits that it is 
not ‘“‘independently’’ productive, but denies the Marxian 
corollary that it should not receive interest. Other writers 
make it codrdinate with land and labor as a productive 
element. 
As to what it is that capital produces there is further 
disagreement. Adam Smith ° affirms that capital produces 
“revenue,” Senior,’ that it produces “wealth.” Others 
vaguely imply that it produces value, services, or utility. 
Most of the definitions involve some reference to time, 
but in many different ways. Hermann 7 has in mind the 
time the wealth will last; Clark,® the permanency of the 
fund capital as contrasted with the transitoriness of its 
! The fancied distinction between land and capital, viz., that the 
former yields rent and the latter interest, and that rent varies with 
different grades of land whereas interest is uniform for all sorts of 
capital, is based on a confusion between quantity and value of wealth. 
The return from land per acre will, it is true, vary according to the 
quality of the land. But so also the return from machinery of differ- 
ent grades will vary per machine. The return from different kinds of 
capital per $100 worth will, it is true, be uniform; but so will the 
return from land per $100 worth. For a full treatment of this confu- 
sion see Fetter’s “ The Relations between Rent and Interest,” a paper 
presented before the American Economic Association, December, 1903. 
Cf. Clark, Capital and its Earnings, p. 27, and Distribution of Wealth 
(Macmillan, 1899), Chaps. IX and XIII. Cannan developed the same 
idea in “What is Capital?” Economic Journal, June, 1897. Cf. the 
writer’s “ Role of Capital,” Economic Journal, December,1897, pp. 524, 
526. 
2 Positive Theory of Capital, English translation, London and New 
York, 1891, p. 38. 
# Capital, English translation, London, 1887, Vol. II, p. 792. 
4 Capital and Interest, Book VI. 
8 Wealth of Nations, Book II, Chap. I. 
® “Political Economy,” Encyclopedia Metropolitana, Vol. VI, p. 
153. 
" Staatswirtschaftliche Untersuchungen, Munich; 1832, p. 59. 
Capital and its Earnings, Publications of American Economic 
Association, 1888, pp. 11-13.