42 Manual of Political Economy.
BOOK I. CH. IV.
A temporary injury may be inflicted upon labourers by the conversion of circulating into fixed capital.
the wealth which this capital produces must at least be sufficient in amount to enable the capital to be re-created. But the same immediate reproduction of wealth does not take place if the capital is converted into fixed capital; and therefore there need not immediately be produced so large an amount of wealth as if the capital were consumed by a single use, and had, in consequence, to be at once reproduced. Now, labourers derive their wages from circulating capital; hence, if the circulating capital is diminished, their wages will temporarily fall. As an example, the construction of a railway may cause circulating to be converted into fixed capital. Suppose that 10,000,000l., previously paid to agricultural labourers, is now paid to railway labourers: the agricultural labourers would consume their wages; but then their labour would at once produce something which would be again consumed, and which would be again employed as circulating capital. The railway labourers will be as usefully, or even more usefully, employed than the agricultural labourers. The nation is not made poorer by this transfer of capital from one industry to another; she has her railway instead of the commodities which were produced by the capital previously invested in agriculture. There is no diminution of national wealth; but there may be less wealth in the country available for consumption—a smaller fund, in fact, to distribute amongst the labourers, and therefore the labourers may temporarily suffer. The application of improved machinery and the construction of such works as railways will ultimately confer upon the labourers an advantage amply sufficient to compensate them for any temporary loss which they may suffer from the conversion of circulating into fixed capital. Railways and machinery have most powerfully stimulated the production of wealth, and a large amount of wealth has been produced by their aid which could never have been produced without them. Moreover, the capacity which exists in England for the accumulation of capital, quickly repairs any encroachment that is made upon her circulating capital; and therefore it is doubtful whether the labourers in this country have been even temporarily injured by the extensive use of machinery, and by the rapid development of our railway system.
