Meaning: This quote by John Robinson, a politician, addresses the concept of capital and its role as an income producing fund. Robinson suggests that if money could be obtained at an extremely low interest rate, such as one-half of one percent, then the value and income-producing capacity of capital would diminish significantly.

To understand this quote more fully, it is important to first define the term "capital." In economics, capital typically refers to financial assets or the financial value of assets such as funds held in deposit accounts, as well as physical assets like machinery and equipment used in production. Capital is a critical component in the process of creating goods and services. It allows for investment in technology, infrastructure, and human capital, which are essential for economic growth and productivity.

The quote alludes to the relationship between the cost of money (interest rates) and the value of capital. When Robinson mentions that "money wherewith to buy capital could be obtained for one-half of one per cent," he is essentially referring to the interest rate at which individuals or businesses can borrow money. In a hypothetical scenario where money can be borrowed at an extremely low interest rate, it implies that the cost of acquiring capital is minimal.

Robinson's assertion that "capital, however capital may be defined, would practically cease to exist as an income producing fund" suggests that if money could be obtained at such a low cost, the income-generating potential of capital would be severely diminished. This is because if the cost of obtaining money is minimal, the return on investment for capital would also be minimal. In other words, if capital can be acquired at a very low cost, its ability to generate income or returns would be significantly reduced.

Moreover, the quote implies that if money could be obtained at such a low interest rate, the value of capital itself would decline. This is based on the economic principle of supply and demand. If the cost of acquiring money is minimal, the demand for capital would decrease, leading to a decrease in its price and value. Essentially, if money is readily available at a very low cost, the value and income-producing capacity of capital would be greatly diminished.

Robinson's statement carries important economic implications. It highlights the intricate relationship between interest rates, the cost of capital, and the income-producing potential of capital. Additionally, it underscores the significance of interest rates in influencing investment decisions, economic growth, and the overall functioning of financial markets.

In conclusion, John Robinson's quote sheds light on the potential consequences of extremely low interest rates on the value and income-generating capacity of capital. It emphasizes the interconnectedness of financial markets and the critical role that interest rates play in shaping economic dynamics. By contemplating the implications of this quote, one can gain insight into the complex interplay between capital, interest rates, and economic outcomes.