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Circulating capital is the portion of capital stock that goes to buying goods to be sold for a profit, or the materials of manufacture needed to produce such goods. Unlike fixed capital, which only needs to be maintained, circulating capital constantly gets used up and needs to be replaced.
Circulating Capital Quotes in The Wealth of Nations
The The Wealth of Nations quotes below are all either spoken by Circulating Capital or refer to Circulating Capital. For each quote, you can also see the other terms and themes related to it (each theme is indicated by its own dot and icon, like this one:
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Book 2, Chapter 1
Quotes
Every fixed capital is both originally derived from, and requires to be continually supported by, a circulating capital. All useful machines and instruments of trade are originally derived from a circulating capital, which furnishes the materials of which they are made, and the maintenance of the workmen who make them. They require, too, a capital of the same kind to keep them in constant repair.
No fixed capital can yield any revenue but by means of a circulating capital. The most useful machines and instruments of trade will produce nothing, without the circulating capital, which affords the materials they are employed upon, and the maintenance of the workmen who employ them. Land, however improved, will yield no revenue without a circulating capital, which maintains the labourers who cultivate and collect its produce.
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Circulating Capital Term Timeline in The Wealth of Nations
The timeline below shows where the term Circulating Capital appears in The Wealth of Nations. The colored dots and icons indicate which themes are associated with that appearance.
Book 2, Chapter 1
There are two kinds of capital: circulating capital , or capital used to produce or obtain goods that are sold for profit, and...
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Like an individual’s stock, a society’s stock is also made of three parts: circulating capital , fixed capital, and a reserve for immediate consumption. This reserve includes food, clothes, furniture,...
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...invested into fixed capital. In turn, this fixed capital only produces revenue when combined with circulating capital —for instance, machines will produce nothing unless raw materials are fed through them and people...
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Book 2, Chapter 2
...on consumption, is the gross revenue minus the expense of maintaining fixed capital and replacing circulating capital . Fixed capital is designed to make workers more productive, but keeping it in working...
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The expense of maintaining circulating capital —producing new provisions, raw materials, and unsold products to replace those that have been turned...
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Book 2, Chapter 5
Manufacturers use their capital to buy the instruments (fixed capital) and materials ( circulating capital ) that they need to make their products, as well as to pay their workers’...
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Book 4, Chapter 2
...money, power, and influence over Parliament. When their businesses fail, these manufacturers sell off their circulating capital , but they lose the value of their fixed capital. But the slower taxes fall,...
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