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[[Adam Smith]] described the operation of capital accumulation through the productive powers of labor as such,

[[Adam Smith]] described the operation of capital accumulation through the productive powers of labor as such,

{{Cquote|Whatever a person saves from his [[revenue]] he adds to his [[capital]], and either employs it himself in maintaining an additional number of productive hands, or enables some other person to do so, by lending it to him for an interest, that is, for a share of the profits. As the capital of an individual can be increased only by what he saves from his annual revenue or his annual gains, so the capital of a society, which is the same with that of all the individuals who compose it, can be increased only in the same manner. <ref>Adam Smith, ''An Inquiry into the Nature and Causes of the Wealth of Nations'', [http://www.econlib.org/library/Smith/smWN.html Book II, Chapter 3, Paragraph 15,] ''Of the Accumulation of Capital, or of Productive and Unproductive Labour'', First Edition 1776.</ref>}}

{{Cquote|Whatever a person saves from his [[revenue]] he adds to his [[capital]], and either employs it himself in maintaining an additional number of productive hands, or enables some other person to do so, by lending it to him for an interest, that is, for a share of the profits. As the capital of an individual can be increased only by what he saves from his annual revenue or his annual gains, so the capital of a society, which is the same with that of all the individuals who compose it, can be increased only in the same manner.<ref>Adam Smith, ''An Inquiry into the Nature and Causes of the Wealth of Nations'', [http://www.econlib.org/library/Smith/smWN.html Book II, Chapter 3, Paragraph 15,] ''Of the Accumulation of Capital, or of Productive and Unproductive Labour'', First Edition 1776.</ref>}}

Smith goes on to describe how the productive powers of labor employed by the owner of a capital allow laborers to reproduce with a profit the value of their maintenance, over and above their own consumption, which then allows for an additional set of hands to be employed. <ref>Adam Smith, ''Wealth of Nations'', Book II, Chapter 3, Paragraph 22.</ref>  Smith observes labor is the original purchase price for all the wealth of the world,

Smith goes on to describe how the productive powers of labor employed by the owner of a capital allow laborers to reproduce with a profit the value of their maintenance, over and above their own consumption, which then allows for an additional set of hands to be employed.<ref>Adam Smith, ''Wealth of Nations'', Book II, Chapter 3, Paragraph 22.</ref>  Smith observes labor is the original purchase price for all the wealth of the world,

[[Image:Eco Pillars.jpg|right|400px|thumbnail|The [[free enterprise]] system in [[United States of America|America]] before [[liberals]], [[Republican in name only|rinos]], and/or members of the [[progressive movement]], such as President [[Barack Obama]], eroded America's [[economics|economic]] freedom and prosperity.  Recently, President [[Obamunism|Barack Obama]] created [[National debt of the United States|massive Federal government debt.]] ]]

[[Image:Eco Pillars.jpg|right|400px|thumbnail|The [[free enterprise]] system in [[United States of America|America]] before [[liberals]], [[Republican in name only|rinos]], and/or members of the [[progressive movement]], such as President [[Barack Obama]], eroded America's [[economics|economic]] freedom and prosperity.  Recently, President [[Obamunism|Barack Obama]] created [[National debt of the United States|massive Federal government debt.]] ]]

{{Cquote|The real price of every thing, what every thing really costs to the man who wants to acquire it, is the toil and trouble of acquiring it. What every thing is really worth to the man who has acquired it, and who wants to dispose of it or exchange it for something else, is the toil and trouble which it can save to himself, and which it can impose upon other people. What is bought with money or with goods is purchased by labour, ²<ref>'Everything in the world is purchased by labour.'—Hume, 'Of Commerce,' in Political Discourses, 1752, p. 12</ref> as much as what we acquire by the toil of our own body. That money or those goods indeed save us this toil. They contain the value of a certain quantity of labour which we exchange for what is supposed at the time to contain the value of an equal quantity. Labour was the first price, the original purchase-money that was paid for all things. It was not by gold or by silver, but by labour, that all the wealth of the world was originally purchased; and its value, to those who possess it, and who want to exchange it for some new productions, is precisely equal to the quantity of labour which it can enable them to purchase or command. <ref>Adam Smith, ''An Inquiry into the Nature and Causes of the Wealth of Nations'', [http://www.econlib.org/library/Smith/smWN.html Book I, Chapter 5, Paragraph 2,] ''Of the Real and Nominal Price of Commodities'', First Edition 1776.</ref>}}

{{Cquote|The real price of every thing, what every thing really costs to the man who wants to acquire it, is the toil and trouble of acquiring it. What every thing is really worth to the man who has acquired it, and who wants to dispose of it or exchange it for something else, is the toil and trouble which it can save to himself, and which it can impose upon other people. What is bought with money or with goods is purchased by labour, ²<ref>'Everything in the world is purchased by labour.'—Hume, 'Of Commerce,' in Political Discourses, 1752, p. 12</ref> as much as what we acquire by the toil of our own body. That money or those goods indeed save us this toil. They contain the value of a certain quantity of labour which we exchange for what is supposed at the time to contain the value of an equal quantity. Labour was the first price, the original purchase-money that was paid for all things. It was not by gold or by silver, but by labour, that all the wealth of the world was originally purchased; and its value, to those who possess it, and who want to exchange it for some new productions, is precisely equal to the quantity of labour which it can enable them to purchase or command.<ref>Adam Smith, ''An Inquiry into the Nature and Causes of the Wealth of Nations'', [http://www.econlib.org/library/Smith/smWN.html Book I, Chapter 5, Paragraph 2,] ''Of the Real and Nominal Price of Commodities'', First Edition 1776.</ref>}}

Real wealth consists not in money, but in the things money will exchange for,

Real wealth consists not in money, but in the things money will exchange for,

{{Cquote|In order to put industry into motion, three things are requisite; materials to work upon, tools to work with, and the wages or recompense for the sake of which the work is done. Money is neither a material to work upon, nor a tool to work with; and though the wages of the workman are commonly paid to him in money, his real revenue, like that of all other men, consists, not in money, but in the money's worth; not in the metal pieces, but in what can be got for them. <ref>Adam Smith, ''An Inquiry into the Nature and Causes of the Wealth of Nations'', [http://www.econlib.org/library/Smith/smWN7.html Book II, Chapter 2, Paragraph 37,] ''Of Money Considered as a particular Branch of the General Stock of the Society, or of the Expence of Maintaining the National Capital '', First Edition 1776.</ref>}}

{{Cquote|In order to put industry into motion, three things are requisite; materials to work upon, tools to work with, and the wages or recompense for the sake of which the work is done. Money is neither a material to work upon, nor a tool to work with; and though the wages of the workman are commonly paid to him in money, his real revenue, like that of all other men, consists, not in money, but in the money's worth; not in the metal pieces, but in what can be got for them.<ref>Adam Smith, ''An Inquiry into the Nature and Causes of the Wealth of Nations'', [http://www.econlib.org/library/Smith/smWN7.html Book II, Chapter 2, Paragraph 37,] ''Of Money Considered as a particular Branch of the General Stock of the Society, or of the Expence of Maintaining the National Capital '', First Edition 1776.</ref>}}

Since wealth does not consist in money, gold, or silver, and labor is the original purchase price, Smith explains how the capitalist system is then put into motion, complete with natural incentives, only Smith does not use the word "capital" here to describe what is needed.  Smith explains how a "store of goods", or "stock sufficient to maintain" the original capitalist entrepreneur is necessary;

Since wealth does not consist in money, gold, or silver, and labor is the original purchase price, Smith explains how the capitalist system is then put into motion, complete with natural incentives, only Smith does not use the word "capital" here to describe what is needed.  Smith explains how a "store of goods", or "stock sufficient to maintain" the original capitalist entrepreneur is necessary;

But when the division of labour has once been thoroughly introduced, the produce of a man's own labour can supply but a very small part of his occasional wants. The far greater part of them are supplied by the produce of other men's labour, which he purchases with the produce, or, what is the same thing, with the price of the produce of his own. But this purchase cannot be made till such time as the produce of his own labour has not only been completed, but sold. A stock of goods of different kinds, therefore, must be stored up somewhere sufficient to maintain him, and to supply him with the materials and tools of his work till such time, at least, as both these events can be brought about.  

But when the division of labour has once been thoroughly introduced, the produce of a man's own labour can supply but a very small part of his occasional wants. The far greater part of them are supplied by the produce of other men's labour, which he purchases with the produce, or, what is the same thing, with the price of the produce of his own. But this purchase cannot be made till such time as the produce of his own labour has not only been completed, but sold. A stock of goods of different kinds, therefore, must be stored up somewhere sufficient to maintain him, and to supply him with the materials and tools of his work till such time, at least, as both these events can be brought about.  

   

   

As the accumulation of stock must, in the nature of things, be previous to the division of labour, ...in order to give constant employment to an equal number of workmen, an equal stock of provisions, and a greater stock of materials and tools than what would have been necessary in a ruder state of things, must be accumulated beforehand. <ref>Adam Smith, ''An Inquiry into the Nature and Causes of the Wealth of Nations'', [http://www.econlib.org/library/Smith/smWN7.html Book II, Introduction, Paragraphs 1, 2, & 3] ''Of the Nature, Accumulation, and Employment of Stock,'', First Edition 1776.</ref>}}

As the accumulation of stock must, in the nature of things, be previous to the division of labour, ...in order to give constant employment to an equal number of workmen, an equal stock of provisions, and a greater stock of materials and tools than what would have been necessary in a ruder state of things, must be accumulated beforehand.<ref>Adam Smith, ''An Inquiry into the Nature and Causes of the Wealth of Nations'', [http://www.econlib.org/library/Smith/smWN7.html Book II, Introduction, Paragraphs 1, 2, & 3] ''Of the Nature, Accumulation, and Employment of Stock,'', First Edition 1776.</ref>}}

{{Cquote|When the division of labour has been once thoroughly established, it is but a very small part of a man's wants which the produce of his own labour can supply. He supplies the far greater part of them by exchanging that surplus part of the produce of his own labour, which is over and above his own consumption, for such parts of the produce of other men's labour as he has occasion for. Every man thus lives by exchanging, or becomes in some measure a merchant, and the society itself grows to be what is properly a commercial society. <ref>Adam Smith, ''An Inquiry into the Nature and Causes of the Wealth of Nations'', [http://www.econlib.org/library/Smith/smWN7.html Book I, Chapter 4, Paragraphs 1] ''Of the Origin and Use of Money'', First Edition 1776.</ref>}}

{{Cquote|When the division of labour has been once thoroughly established, it is but a very small part of a man's wants which the produce of his own labour can supply. He supplies the far greater part of them by exchanging that surplus part of the produce of his own labour, which is over and above his own consumption, for such parts of the produce of other men's labour as he has occasion for. Every man thus lives by exchanging, or becomes in some measure a merchant, and the society itself grows to be what is properly a commercial society.<ref>Adam Smith, ''An Inquiry into the Nature and Causes of the Wealth of Nations'', [http://www.econlib.org/library/Smith/smWN7.html Book I, Chapter 4, Paragraphs 1] ''Of the Origin and Use of Money'', First Edition 1776.</ref>}}

==Capitalism and Society==

==Capitalism and Society==

--[[Milton Friedman]], Free to Choose

--[[Milton Friedman]], Free to Choose

“Capitalism is essentially the economic system of poor people. That’s what allowed the people that came from humble origins of the world to have economic rights the way only nobility and the high bourgeoisie had it before. So capitalism is essentially a tool for poor people to prosper.”

“Capitalism is essentially the economic system of poor people. That’s what allowed the people that came from humble origins of the world to have economic rights the way only nobility and the high bourgeoisie had it before. So capitalism is essentially a tool for poor people to prosper.”—Hernando de Soto, PBS Interview, March 30–31, 2001

 

--Hernando de Soto, PBS Interview, March 30-31, 2001

(cf: [http://www.americansolutions.com/General/?Page=026a3bda-755c-45d8-84d3-c68eef294612 Values - Free Enterprise])

(cf: [http://www.americansolutions.com/General/?Page=026a3bda-755c-45d8-84d3-c68eef294612 Values - Free Enterprise])

"The only real cure for poverty is production". [[Henry Hazlitt]], from ''Man vs. the Welfare State''.

"The only real cure for poverty is production". [[Henry Hazlitt]], from ''Man vs. the Welfare State''.

"The first condition for the establishment of perpetual peace is the general adoption of the principles of laissez-faire capitalism."

"The first condition for the establishment of perpetual peace is the general adoption of the principles of laissez-faire capitalism."—Ludwig von Mises, The Ultimate Foundation of Economic Science

 

--Ludwig von Mises, The Ultimate Foundation of Economic Science

 

 

"Businessmen are the symbol of a free society — the symbol of America."

"There are two methods, or means, and only two, whereby man's needs and desires can be satisfied. One is the production and exchange of wealth; this is the economic means. The other is the uncompensated appropriation of wealth produced by others; this is the political means."—Albert Jay Nock, Our enemy, the State

-- Ayn Rand

"Businessmen are the symbol of a free society — the symbol of America."—Ayn Rand

== See also ==

== See also ==