The Positive Theorie des Kapitales has given to the concept of capital, and of its relation to other elements of economic theory, a conciseness and adequacy of which earlier speculators were sorely in need. If the distinction which this discussion formulates between social and private capital had been apprehended earlier, with the same full and clear consciousness, the means would have been at hand by which the wages-fund controversy might have been put to rest. But the completed definition of capital does not of itself dispose of the question. A further analysis in the same direction is necessary. Wages, in this stricter definition, and private capital both are facts of usage, while the laborer's income, or earnings, and social capital both are facts intrinsic and fundamental to any theory of industrial society.
Wages is a fact incident to the relation of employer and employed.
It is by an unconscious equivocation, in shifting the point of view, that wages is identified with earnings and spoken of as an element in the theory of distribution or consumption. The item of value, which from the point of view of production as carried on by the method of private capital as wages is, from the point of view of the laborer, as being productively employed in his own interest, earnings. From the point of view of consumption of goods produced, neither of these terms can be employed with entirely the same meaning as they have in the use just specified. All this may seem to be a web of excessively fine-spun technicalities, but in apology it is to be said that it is also directed exclusively to a point of pure theory. And the whole controversy about the source of wages has also been in the region of pure theory, having never directly involved questions of physical fact or of expediency.