Fixed and Circulating Capital

Abstract

But the use of these words “fixed” and “circulating” by Smith is entirely different from the use of the words in subsequent writers. Smith mentions as the best instance of circulating capital, money, which he says produces no profit except it be parted with; and the stocks in the hands of shopkeepers are circulating capital simply because they are intended to be sold and got rid of, and the more quickly they are got rid of the more profitable for the shopkeepers, whereas the building of the shop, the machines employed in the factory, and many other things that are kept are fixed capital because they are not parted with, but on the contrary return a revenue by being kept.