another. Goods cannot be thus moved with any freedom. A loom cannot be
taken out of a woolen mill and made to do duty in a carpenter's shop,
nor can a circular saw be made available in weaving. When the loom
wears out and needs replacement, it is in the owner's power to procure
either another loom or a circular saw, and if he chooses the latter
alternative, he causes capital to move into the woodworking business.
A whaling ship would not be useful as a cotton mill; but much capital
that was once invested in the whale fishery of New England has since
found its way into manufacturing. The transfer can often be made
without waste. If the earnings of an instrument have sufficed to
replace it with another that is like it, they may suffice for
producing an instrument that is unlike it. Waste, if it occurs,
results from a failure of the original instrument to earn the fund for
replacement. Capital which thus abides but passes from one employment
to another is a body the identity and the character of whose component
parts change. The transfer of capital from one industry to another is
a dynamic phenomenon which is later to be considered. What is here
important is the fact that it is in the main accomplished without
entailing transfers of capital goods. An instrument wears itself out
in one industry, and instead of being succeeded by a like instrument
in the same industry, it is succeeded by one of a different kind which
is used in a different branch of production. Goods have not moved from
one branch to another, but capital has done so.

_How Capital itself may be Destroyed._--When we speak of capital as
permanent, we mean that using does not destroy it as it destroys the
tissues of which it is composed. Fires, earthquakes, and business
disasters put parts of it out of existence and affect the volume of
the fund as a whole; but production itself leaves it intact. It is
this very production which destroys capital goods and makes it
necessary to replace them.

CHAPTER III

THE MEASURE OF CONSUMERS' WEALTH

In all stages of social development the economic motives that actuate
men remain essentially the same. All men seek to get as much net
service from material wealth as they can. The more wealth they have,
other things remaining the same, the better off they are, and the more
personal sacrifice they are compelled to undergo in the securing of
the wealth, the worse off they are. Some of the benefit received is
neutra