11 KiB
--- ENTITY: stock ---
Stock
Definition
The accumulated wealth of an individual or society that can be employed to generate revenue, distinguished from immediate consumption goods and divided into capital (which yields profit) and revenue (which supports consumption).
Source Chapter
Book II, Chapter 1
Context
The foundational concept introduced at the beginning of Book II, establishing the distinction between stock that produces revenue and stock consumed for immediate subsistence, forming the basis for Smith's analysis of capital accumulation and economic growth.
Economic Domain
General Theory
--- ENTITY: capital ---
Capital
Definition
That portion of an individual's stock which is expected to yield revenue, employed either in purchasing goods for resale with profit (circulating capital) or in improving land and acquiring productive machinery (fixed capital).
Source Chapter
Book II, Chapter 1
Context
Developed as one of the two fundamental divisions of stock, capital is defined by its revenue-producing function and further distinguished into circulating and fixed forms based on how it generates profit.
Economic Domain
Accumulation
--- ENTITY: circulating capital ---
Circulating Capital
Definition
Capital employed in purchasing goods for resale with profit, which yields no revenue while in possession and only generates profit through successive exchanges and circulation from one form to another.
Source Chapter
Book II, Chapter 1
Context
One of two forms of capital, exemplified by merchant stock that must be continually sold and repurchased to generate profit, distinguished from fixed capital by its requirement for circulation.
Economic Domain
Exchange
--- ENTITY: fixed capital ---
Fixed Capital
Definition
Capital employed in improving land, purchasing productive machinery, or acquiring instruments of trade that yield revenue or profit without changing masters or requiring circulation.
Source Chapter
Book II, Chapter 1
Context
Distinguished from circulating capital as the form that generates profit through productive improvements and durable assets rather than through exchange and circulation.
Economic Domain
Production
--- ENTITY: revenue ---
Revenue
Definition
The income derived from stock employed as capital, whether through the sale of circulating goods or through the productive use of fixed capital in land improvement and machinery.
Source Chapter
Book II, Chapter 1
Context
The profit generated by capital, contrasted with the portion of stock reserved for immediate consumption, and forming the basis for understanding how wealth accumulates and sustains economic activity.
Economic Domain
Distribution
--- ENTITY: immediate consumption ---
Immediate Consumption
Definition
That portion of an individual's stock reserved for present use and subsistence, consisting of food, clothing, household furniture, and dwelling houses that provide no revenue but sustain the owner.
Source Chapter
Book II, Chapter 1
Context
The second fundamental division of stock, distinguished from capital by its consumption function rather than revenue production, forming the basis for understanding the distinction between wealth accumulation and subsistence.
Economic Domain
Consumption
--- ENTITY: labouring poor ---
Labouring Poor
Definition
The majority of workers whose stock is insufficient to maintain them beyond a few days or weeks, deriving revenue solely from their labour without capital accumulation.
Source Chapter
Book II, Chapter 1
Context
Introduced as the baseline economic condition against which capital accumulation is contrasted, representing the subsistence economy from which economic development begins.
Economic Domain
Production
--- ENTITY: master artificer ---
Master Artificer
Definition
A skilled craftsman who employs capital in his trade, requiring fixed capital in the form of tools and instruments while circulating the remainder in wages and materials.
Source Chapter
Book II, Chapter 1
Context
Exemplifies the intermediate economic position between merchants (purely circulating capital) and farmers (significant fixed capital), illustrating the varying proportions of fixed and circulating capital across occupations.
Economic Domain
Production
--- ENTITY: farmer's capital ---
Farmer's Capital
Definition
The stock employed in agriculture, divided into fixed capital (instruments of husbandry and breeding cattle) and circulating capital (wages of servants and maintenance of labouring cattle).
Source Chapter
Book II, Chapter 1
Context
Provides a detailed example of how agricultural capital combines fixed and circulating elements, with profit derived both from keeping breeding stock and from selling fattened cattle.
Economic Domain
Production
--- ENTITY: society's general stock ---
Society's General Stock
Definition
The aggregate wealth of all inhabitants or members of a country, naturally dividing into the same three portions as individual stock: immediate consumption, fixed capital, and circulating capital.
Source Chapter
Book II, Chapter 1
Context
Extends the analysis from individual economic agents to the national economy, establishing the framework for understanding how different forms of capital contribute to national wealth and economic development.
Economic Domain
General Theory
--- ENTITY: productive abilities ---
Productive Abilities
Definition
The acquired and useful talents of society's members, acquired through education and apprenticeship, constituting a form of fixed capital that contributes to national wealth through increased productivity.
Source Chapter
Book II, Chapter 1
Context
Identified as the fourth component of fixed capital, alongside machines, buildings, and land improvements, highlighting human capital as a productive resource.
Economic Domain
Production
--- ENTITY: circulating capital components ---
Circulating Capital Components
Definition
The four parts of circulating capital: money for circulation, provisions in possession of producers, raw materials and partially manufactured goods, and finished work held by merchants and manufacturers.
Source Chapter
Book II, Chapter 1
Context
Provides the detailed breakdown of circulating capital's composition, showing how different forms of goods and money facilitate economic exchange and production.
Economic Domain
Exchange
--- ENTITY: land, mines, and fisheries ---
Land, Mines, and Fisheries
Definition
The primary sources of raw materials and provisions that replenish circulating capital and maintain the economic system, providing the natural resources from which all economic activity ultimately derives.
Source Chapter
Book II, Chapter 1
Context
Identified as the fundamental sources of economic renewal, explaining how natural resources support the continuous circulation and replacement of capital throughout the economy.
Economic Domain
Production
--- ENTITY: feudal government effects ---
Feudal Government Effects
Definition
The political system that encouraged the concealment and burial of stock due to fear of violence from superiors, representing an economic barrier to capital accumulation and market development.
Source Chapter
Book II, Chapter 1
Context
Provides historical context for understanding how political institutions can inhibit economic development by creating insecurity that prevents capital from being employed productively.
Economic Domain
Regulation
--- ENTITY: treasure-trove ---
Treasure-Trove
Definition
Concealed wealth discovered in the earth to which no particular person could prove right, considered part of sovereign revenue in feudal times and reflecting the economic insecurity of the period.
Source Chapter
Book II, Chapter 1
Context
Illustrates the economic consequences of feudal insecurity, where valuable resources remained buried rather than being employed productively in the economy.
Economic Domain
Regulation
--- ENTITY: dwelling house distinction ---
Dwelling House Distinction
Definition
The economic difference between houses used as capital (rented for revenue) and those used for immediate consumption (owner-occupied, providing no revenue to the public).
Source Chapter
Book II, Chapter 1
Context
Clarifies how the same physical asset can function differently in the economy depending on its use, distinguishing between capital that generates revenue and consumption goods that do not.
Economic Domain
General Theory
--- ENTITY: masquerade dress trade ---
Masquerade Dress Trade
Definition
The commercial practice of renting masquerade costumes for temporary use, representing how consumption goods can occasionally function as capital when rented for revenue.
Source Chapter
Book II, Chapter 1
Context
Provides an example of how goods normally reserved for immediate consumption can occasionally generate revenue when employed as capital through rental arrangements.
Economic Domain
Exchange
--- ENTITY: improved farm advantages ---
Improved Farm Advantages
Definition
Agricultural land that has been profitably enhanced through clearing, draining, enclosing, and manuring, functioning as fixed capital that facilitates and abridges labour like any other productive machine.
Source Chapter
Book II, Chapter 1
Context
Demonstrates how land improvements constitute fixed capital, comparing their productive advantages to mechanical inventions and emphasizing their durability and profitability.
Economic Domain
Production
--- ENTITY: seed as fixed capital ---
Seed as Fixed Capital
Definition
The total value of seed employed in agriculture, considered fixed capital because it moves between ground and granary without changing masters, generating profit through increase rather than sale.
Source Chapter
Book II, Chapter 1
Context
Provides a nuanced example of fixed capital, showing how agricultural inputs can function as capital despite their apparent circulation between different locations.
Economic Domain
Production
--- ENTITY: three-way employment of stock ---
Three-Way Employment of Stock
Definition
The three possible uses of capital: for immediate consumption, as fixed capital, or as circulating capital, representing all possible ways stock can be employed to generate present enjoyment or future profit.
Source Chapter
Book II, Chapter 1
Context
Concludes the chapter by summarizing the fundamental choices available for employing stock, establishing the framework for understanding all economic activity in terms of these three categories.
Economic Domain
General Theory