> This is a confusion of monetary capital (which Ricardo, as a stockbroker by trade, knew intimately) with the physical machinery in factories (about which he knew very little). Yes, monetary capital moves easily in search of a profit—today, even internationally. But machinery is specific to each industry, and the crucial machines in one industry cannot simply “move” to another without loss of productivity.

> In fact, the relative mobility which Ricardo assumed for his ubiquitous concept of “capital” is the opposite of what applies to machinery. Machinery designed for one industry simply cannot move to any other, even in the same country; but machinery in one industry can (and frequently is) shipped between countries.

Yet if one doesn't make a distinction between "monetary capital" and "physical capital" this whole argument falls apart. Reallocation of malinvested capital is the cornerstone of a market economy and leads to a more overall efficient system. If someone makes a bad bet and fails in their entrepreneurial endeavor their "capital" will be liquidated and used in a (hopefully) more efficient manner.