Henry George

“ As a matter of fact, a portion of the wealth produced is constantly going to the replacement of capital, which is constantly consumed and constantly replaced. But it is not necessary to take this into account, since it is eliminated by considering capital as continuous, which, in speaking or thinking of it, we habitually do. When we speak of the produce, we mean therefore the wealth that is produced over and above what is necessary to replace the capital consumed in production ”

“ Production does not merely mean the making of things, but includes the increase of value gained by transporting or exchanging things. There is a produce of wealth in a purely commercial community, as there is in a purely agricultural or manufacturing community; and in the one case as in the others, some part of this produce will go to capital, some part to labour and some part, if land has any value, to the owners of land. ”

“ Adam Smith well illustrates how wages and compensation for risk largely enter into profits, pointing out how the large profits of apothecaries and small retail dealers are in reality wages for their labour, and not interest on their capital; and how the great profits sometimes made in risky businesses, such as smuggling and the lumber trade, are in reality but compensations for risks that in the long run reduce the returns to capital so used to the ordinary or below the ordinary rate. ”

“ Land, labour and capital are the factors of production. The term land includes all natural opportunities and forces; the term labour, all human exertion; and the term capital, all wealth used to produce more wealth. In returns to these three factors is the whole produce distributed. The part that goes to landowners as payment for the use of natural opportunities is called rent; the part that constitutes the reward of human exertion is called wages; and the part that constitutes the return for the use of capital is called interest. ”

“ The produce or production of a community is the sum of the wealth produced by that community. It is the general fund from which, as long as previously existing stock is not lessened, all consumption must be met and all revenues drawn. ”

“ It means a gain, an amount received in excess of an amount expended, and frequently includes receipts that are properly rent while it nearly always includes receipts that are properly wages, as well as compensations for the risk peculiar to the various uses of capital. Unless extreme violence is done to the meaning of the word, it cannot therefore be used in Political Economy to signify that share of the produce which goes to capital, in contradistinction to those parts which go to labour and to landowners. ”

“ These terms mutually exclude each other. The income of any individual may be made up from any one, two, or all three of these sources; but in the effort to discover the laws of distribution we must keep them separate. ”