Turgot's Theory of Capital: The Capitalist-Entrepreneur Must First Accumulate Saved Capital in order to Advance His Payment to Labourers While the Product Is Being Worked On

Turgot's theory of capital proper was echoed in the British classical economists as well as the Austrians. Thus in his great 'Reflections', Turgot pointed out that wealth is accumulated by means of unconsumed and saved annual produce. Savings are accumulated in the form of money, and then invested in various kinds of capital goods. Furthermore, as Turgot pointed out, the 'capitalist-entrepreneur' must first accumulate saved capital in order to 'advance' his payment to labourers while the product is being worked on. In agriculture, the capitalist-entrepreneur must save funds to pay workers, buy cattle, pay for buildings and equipment, etc., until the harvest is reaped and sold and he can recoup his advances. And so it is in every field of production.

--Murray N. Rothbard, Economic Thought Before Adam Smith, vol. 1 of An Austrian Perspective on the History of Economic Thought (Auburn, AL: Ludwig von Mises Institute, 2006), 395.