In addition to the two basic and universal factors of production, labor and natural forces, there is another factor of production. Without it, industry can only be in the initial primitive and rough state, and it is impossible to carry out any other production activities. This is the accumulation of previous labor products. The accumulation of this product of labor is called capital. It is extremely important to thoroughly understand the role of capital in production, because many misunderstandings about capital come from the incomplete and chaotic understanding of this point.

In the eyes of people who are completely unfamiliar with this problem, capital is money. In order to expose this misunderstanding, we must repeat what is said in the introduction. Money is neither wealth nor capital. Money itself cannot perform any function of capital, because it can't provide any help for production. In order to help production, money must be exchanged for something else; Anything that can be exchanged with other things can promote production to the same extent. What capital does for production is to provide places, protection, tools and raw materials needed for work and support workers in the production process. These are the services that current labor requires from past labor, and they are also the products of past labor. In this respect, that is, what meets the above preconditions necessary for productive labor is capital.

In order to be familiar with this concept, let's first look at what a country's capital invested in various productive industries is used for. For example, part of the manufacturer's capital exists in the form of buildings to provide places for production activities. The other part exists in the form of a machine. The third part looks at his products. If he is a spinner, it exists in the form of raw cotton, flax or wool; If he is a weaver, it exists in the form of hemp yarn, wool, silk or cotton yarn. According to modern custom, the food and clothing needed by the laborer is not directly provided by him; Except for the producers of food or clothes, few capitalists put any noteworthy part of their capital in the form of food or clothes. Every capitalist does not hold food or clothes, but money. He paid the workers to buy their own food and clothes. In addition, there are finished products in the warehouse. After selling these goods, he can get more money, which can be used to pay workers' remuneration, supplement raw materials, repair houses and machines, and replace scrapped houses and machines. However, not all the money and finished products he owns are capital, because not all of them are used in these fields. He used part of the funds and the proceeds from the sale of finished products to meet personal and family consumption, hired grooms and footmen, supported hunters and hounds, educated his children, paid taxes or donated them to charities. So, what is his capital? To be precise, it is the part of his property used for reproduction, no matter what form these properties exist. It doesn't matter whether it can be used directly to meet the needs of workers in part or in whole.

For example, suppose the capitalist is a hardware manufacturer, and his capital is currently iron products except machines. Iron products cannot be used to feed workers. However, as long as the use of iron products is changed, he can support workers. Suppose he originally intended to use part of his income to raise a group of hunting dogs or hire some servants, but now he has changed his mind and used this income to engage in production activities and pay the additional workers. These workers can therefore buy and consume food that would otherwise be consumed by hounds or servants. Therefore, employers can use more food to support production workers and use less food for unproductive consumption without looking at or touching food. Now change this assumption and imagine that we don't use this money to raise servants or hounds to pay our salaries, but to buy tableware and jewelry to pay our salaries. In order to make the results more obvious, we assume that the scale of this change is quite large, and a large sum of money for buying tableware and jewelry is transferred to hiring productive workers, assuming that these workers, like Irish farmers, were semi-unemployed before. After these workers get extra wages, they will not buy tableware and jewelry, but food. However, the country has no surplus food, and unlike the previous examples, some unproductive workers or animals' food can be used for production purposes. Therefore, if possible, food will be imported; If it is impossible, the workers will remain half hungry and half full for the time being. However, the capitalist's expenditure will change from unproductive expenditure to productive expenditure, thus changing the demand for goods. As a result, food production will increase next year, while tableware and jewelry will decrease. This once again shows that there is no need to directly use workers' grain for anything. As long as someone changes part of his property (no matter what kind of property) from unproductive use to productive use, it will increase the food consumed by productive workers. Thus, the difference between "capital" and "non-capital" lies not in the kind of goods, but in the intention of the capitalist, depending on what purpose he uses it to achieve; Any kind of property, no matter how unsuitable for workers, is a part of capital as long as it or the value derived from it is used for productive reinvestment. The sum of all the values designated by each owner for productive reinvestment constitutes the capital of the country. It doesn't matter whether these values are in a form that can be directly used in production. No matter what form they take, they are temporary and accidental; Once designated for production, they will be transformed into something that can be applied to production in some way.