What is necessary is plainly the power to produce these things in large quantities as they are required.  And this power is furnished by the durable instruments of production, which we thus rightly regard as the true representatives of modern capital.  If it is argued that this power to produce consumable goods may be regarded as being in effect a store of consumable goods, it must be sternly replied that this is the language of symbolism, not of science, and that symbolism is highly dangerous in this connection.  The false conception of capital as essentially a store of consumers’ goods has led and still leads to many serious fallacies.  It was this that gave rise to the notorious doctrine of the Wages Fund; the notion that the sum which can at any time be paid in wages is equal to the quantity of capital, alias consumable goods, which happens to exist.  To this day it blocks, with an undergrowth of obscurantist controversies, the way to a straightforward account of the problem of trade cycles.

Sec.5. The Essence of Waiting.  But it is with positive conclusions that we must here concern ourselves.  What is the essence of this waiting, as we have called it?  What are its results from the point of view of the community?  The individual, who saves and lends, waits in the obvious sense that he postpones consumption.  He foregoes his right to purchase now a quantity of consumers’ goods in consideration of the prospect of purchasing a larger quantity of such things in the future.  From the standpoint of the whole community, there is a similar postponement of consumption, though it need not commence so soon.  The store of consumable goods is what it is:  the quantity of goods in process of manufacture, which will shortly be coming forward, is also what it is.  For some time, therefore, a sudden access of saving cannot affect the quantity of goods available for consumption; and if, in fact, they should be consumed less rapidly, that will represent an unfortunate defect, not an essential condition of a smoothly working system.  The necessary consequence comes later.  The increased saving will cause labor, materials, land, agents of production generally, to be devoted to distant purposes.  Men will be set to work producing durable goods, largely durable instruments of production like ships or railways or factories or plant.  If the increased saving is considerable, the labor, materials, etc., required for these purposes will be withdrawn even under our present system, as under a smoothly working system they clearly must be, from the production of other and more immediately consumable things.  Hence, some time later, the supplies of consumable things will be diminished, while at a later period still they will be more than correspondingly increased as the result of the assistance of the new durable instruments.  That is the essence of saving from the social standpoint.  An early future is sacrificed to a more remote future.  The aggregate consumable income of the present is unaffected; the aggregate consumable income of the near future is actually diminished; it is not until at least some years later that the aggregate consumable income is increased.