ch. 9 CERTAIN DEFINITIONS 129

each member of which has more duration of use orconsumption than its- predecessor—services, food,clothing, ships, furniture, houses, and so on. But thebroad distinction is clear enough.

The goods existing at any time can also be classi-fied into Finished Goods and Unfinished Goods. Thefinished goods consist of Final Goods which are for theenjoyment of the ultimate consumer, and InstrumentalGoods, which are for use in process.

In the case of u nfini shed goods there is sometimesan ambiguity as to whether raw materials are bestregarded as liquid or in process. In Vol. ii. Chap. 28we shall complete our definition to the effect thatnormal stocks required for efficient business are partof Working Capital and therefore in process, whilstsurplus stocks are to be regarded as liquid. Thus theunfinished goods existing at any time consist partlyof Working Capital and partly of Liquid Capital.

It is convenient to reserve the term “ Hoards ” tomean the stock of Liquid Final Goods, and the term“ Stocks ” to mean other forms of Liquid Capital.

Thus Finished Goods = Final Goods plus Instru-mental Goods = Fixed Capital plus Hoards. UnfinishedGoods = Working Capital plus Stocks. Liquid Capital= Stocks plus Hoards. Finished Goods plus Un-finished Goods = Fixed Capital plus Wor king Capitalplus Liquid Capital = Aggregate Real Capital.

If we are considering the wealth of individuals,or of a particular community, as distinct from thewealth of the world as a whole, we have to include—in addition to the ownership of Real Capital asdefined above—claims on money, for payment ondemand or over a series of dates in the future, aspositive and the corresponding debts or obligationsas negative. When we are dealing with a closedsystem as a whole, these items can be neglected,since they cancel out. But when we are dealing witha single country which is part of an international

VOL. i k