The Basis of the Reasoning of the Classic Economists Was That Present Labor Gets Its Substantial Reward from a Product Made by Past Labor

The fact that present labor gets its substantial reward from a product made chiefly by past labor was the basis of the reasoning of the classic economists. The products of the past which served to support and remunerate laborers they called capital. They inferred--indeed, assumed as a thing so obvious as hardly to need inference--that wages were paid from capital. In the second part of the present volume we shall have occasion to note how briefly and inadequately they presented this cardinal proposition. Here we shall proceed at once to consider how far it is sound; how far the products of the past are to be called capital, and how far the proposition that labor gets its reward from past product is equivalent to the proposition that wages are paid from capital.

--F.W. Taussig, Wages and Capital: An Examination of the Wages Fund Doctrine (London: Macmillan and Co., 1896), 26.