James Ahiakpor, Your quote from Mill allows for the possibility that some income may be simply laid aside and not consumed immediately, in which case it is "hoarded." Only if it is immediately "employed as capital," is it immediately spent. In short, Mill admits exactly what you and Kates declare to be impossible, or at least not in the realm of thought of the classical economists as possible, a leakage that is hoarded and is not spent (at least not immediately). This point was fully recognized by Say himself, as I have previously pointed out in this venue. It would be good if you guys would recognize this point and stop just repeating cherry picked quotes that you think prove the impossibility of "leakages." Barkley Rosser