MODERN BUSINESS CAPITAL
What has been said on the use of loan credit has anticipated much of what is peculiar in modern business capital. Such is necessarily the case, since it is in the extensive use of credit that the later phases of the management of capital contrast most strikingly with the corresponding features of earlier business traffic. To follow the terminological precedents set by German writers, the latemodem scheme of economic life is a " credit economy," as contrasted with the " money economy " that characterizes early-modem times. The nature of business capital and its relations to the industrial process under the later, more fully developed, credit economy is in some degree different from what it was before the full and free use of credit came to occupy its present central position in business traffic ; and more particularly is it at variance with the theoretical expositions of the economists of the past generation.
It has been the habit of economists and others to epeak of " capital " as a stock of the material means by which industry is carried on, — industrial
134 THE THEO iY OF BUSINESS ENTERPRISE
equipment, raw n terials, and means of subaiatence. This view ia car ed over from the situation in which business at i industry stood at the time of Adam Smith and of the generation before Adam Smith, from whose scheme of life and of thought he drew the commonplace materials and conceptions with which his speculations were occupied. It further carries over the point of view occupied by Adam Smith and the generation to whom he addressed his speculations. That is to say, the received