Accumulation--Productive and unproductive consumption--Use
of capital--Credit--Security of property--Production applied
to the satisfaction of common wants--Increase of
comforts--Relations of capitalist and labourer.
Dr. William Bulleyn, who lived three centuries ago, first gave currency
to the saying, that great riches were "like muckhills, a burthen to the
land, and offensive to the inhabitants thereof, till their heaps are
cast abroad, to the profit of many." The worthy physician belonged to an
age when the class called misers extensively prevailed; and when those
who lent out money upon interest were denominated usurers. They were
generally objects of public obloquy, and their function was not
understood. There are plenty of men still amongst us who, in Dr.
Bulleyn's view of the matter, are impersonations of the muck that is not
spread. The muck-spreaders, according to the old notion, were those
whose consumption was always endeavouring to outstrip the production
that was going forward around them. The latter is by far the larger
class at the present day; the former, the more powerful.
Let us endeavour, somewhat more with reference to practical results than
we have already attempted, to look at some of the general principles
existing in modern society which determine the existence, and regulate
the employment, of capital.
Whatever is saved and accumulated is a saving and accumulation of
commodities which have been produced. The value of the accumulation is
most conveniently expressed by an equivalent in money; but only a very
small part of the accumulation is actually money. A few millions of
bullion are sufficient to carry on the transactions of this country.
Its accumulations, or capital, which have been considered to amount to
twenty-two hundred million pounds sterling, could not be purchased by
several times the amount of all the bullion that exists in the world. A
great part of what is saved, therefore, is an accumulation of products
suitable for consumption. The moment that they are applied to the
encouragement of production, they begin to be consumed. They encourage
production only as far as they enable the producers to consume while
they are in the act of producing. Accumulation, therefore, is no
hindrance to consumption. It encourages consumption as much as
expenditure of revenue unaccompanied by accumulation. It enables the
things consumed to be replaced, instead of being utterly destroyed.
Whatever is consumed by those who are carrying forward the business of
production has been called productive consumption. Whatever, on the
other hand, is consumed by those who are not engaged in re-producing,
has been called unproductive consumption. The difference may be thus
illustrated:--A shoemaker, we will say, rents a shop, works up leather
and other materials, uses various tools, burns out candles, and is
himself fed and clothed while in the act of producing a pair of shoes.
This is productive consumption;--for the pair of shoes represents the
value of the materials employed in them, the commodities consumed by the
shoemaker during their production, and the wear and tear of the tools
applied in making them. If the shoes represent a higher value than what
has been consumed, in consequence of the productiveness of the labour of
the shoemaker, the difference is net produce, which may be saved, and,
with other savings, become capital. But further:--The shoemaker, we will
suppose, accumulates profits sufficient to enable him to live without
making shoes, or applying himself to any other branch of industry. He
now uses no materials, he employs no tools, but he consumes for the
support and enjoyment of existence, without adding anything to the gross
produce of society; this is called unproductive consumption.
The differences, however, between productive and unproductive
consumption admit of considerable qualification. We have already
described the course of a spendthrift, and of a man of fortune who lives
virtuously and economically.[33] Whatever may be the scientific
definition, no one can say that these, even viewed from the industrial
point, can be classed together as unproductive consumers. Productive
consumption, according to the strict definition of the earlier
economists, is consumption directly applied to the creation of some
material product. But a new element was introduced into the question by
Mr. Mill's definition--that labour and expenditure are also productive,
"which, without having for their direct object the creation of any
useful natural product, or bodily or mental faculty or quality, yet lead
indirectly to promote one or other of those ends." On the other hand,
unproductive consumption consists of labour and expenditure exerted or
incurred "uselessly, or in pure waste, and yielding neither direct
enjoyment nor permanent sources of enjoyment."
It has been suggested by Dr. Cooper, an American professor, that the
parable of "the ten talents," in St. Matthew's Gospel, points to the
employment of capital for future production. "For the kingdom of heaven
is as a man travelling into a far country, who called his own servants,
and delivered unto them his goods. And unto one he gave five talents, to
another two, and to another one; to every man according to his several
ability; and straightway took his journey. Then he that had received the
five talents went and traded with the same, and made them other five
talents. And likewise he that had received two, he also gained other
two. But he that had received one, went and digged in the earth, and hid
his lord's money." The last was the "wicked and slothful," because
unprofitable, servant. His was the sin of omission. He ought to have put
out the money to "the exchangers," even if he had been afraid to trade
with it.
Adam Smith has laid it down as an axiom that the proprietor who
encroaches upon his capital by extravagance and waste, is a positive
destroyer of the funds destined for the employment of productive labour.
No doubt this is, in many respects, true. He, also, has buried his "one
talent." But the common opinion of what are called "the money-making
classes" of our time goes somewhat further than this. It is said that,
amongst "the middle class" of this country, "the life of a man who
leaves no property or family provision, of his own acquiring, at his
death, is felt to have been _a failure_."[34] There are many modes in
which the life of an industrious, provident, and able man may have been
far other than "a failure," even in a commercial point of view, when he
leaves his family with no greater money inheritance than that with which
he began the world himself. He may have preserved his family, during the
years in which he has lived amongst them, in the highest point of
efficiency for future production. He may have consumed to the full
extent of his income, producing, but accumulating no money capital for
reproductive consumption; and, indirectly, but not less certainly, he
may have accumulated whilst he has consumed, so as to enable others to
consume profitably. If he have had sons, whom he has trained to manhood,
bestowing upon them a liberal education; bringing them up, by honest
example, in all trustworthiness; and causing them to be diligently
instructed in some calling which requires skill and experience--he is an
accumulator. If he have had daughters, whom he has brought up in habits
of order and frugality--apt for all domestic employments--instructed
themselves, and capable of carrying forward the duties of
instruction--he has reared those who in the honourable capacity of wife,
mother, and mistress of a family, influence the industrial powers of the
more direct labourers in no small degree; and, being the great promoters
of all social dignity and happiness, create a noble and virtuous nation.
By the capital thus spent in enabling his children to be valuable
members of society, he has accumulated a fund out of his consumption
which may be productive at a future day. He has postponed his money
contribution to the general stock; but he has not withheld it
altogether. He has not been "the wicked and slothful servant." On the
other hand, many a man, whose life, according to the mere capitalist
doctrine, has not been "a failure," and who has taught his family to
attach only a money-value to every object of creation, bequeaths to the
world successors whose rapacity, ignorance, unskilfulness, and
improvidence, will be so many charges upon the capital of the nation.
The "muckhill" will by them be "cast abroad," but it will be devoted to
the mere pursuit of sensual indulgence, losing half its fertilizing
power, and too often burning up the soil that its judicious application
would stimulate. He that has been weak enough, according to this
"middle-class" doctrine, not to believe that the whole business of man
is to make "a muckhill," may have spent existence in labours, public or
private, for the benefit of his fellow creatures; but his life is "a
failure!" The greater part of the clergy, of the bar, of the medical
profession, of the men of science and literature, of the defenders of
their country, of the resident gentry, of the aristocracy, devote their
minds to high duties, and some to heroic exertions, without being
inordinately anxious to guard themselves against such "a failure." It
would perhaps be well if some of those who believe that all virtue is to
be resolved into pounds sterling, were to consider that society demands
from "the money-making classes" a more than ordinary contribution--not
to indiscriminate benevolence, but to those public instruments of
production--educational institutions--improved sanitary
arrangements--which are best calculated to diminish the interval between
the very rich and the very poor.
Whatever tends to enlighten the great body of the people facilitates
individual accumulation. A large portion of the productions of industry,
especially amongst the humbler classes of the community, is wasted, in
addition to that portion which is enjoyed. Every consumption that is
saved by habits of order, by knowing the best way of setting about a
thing, by economy in the use of materials, is so much saved of the
national capital; and what is saved remains to give new encouragement to
the labour of the producer, and to bestow an increase of comforts upon
the consumer. Again, the more that professional skill of every sort is
based upon real knowledge, the more productive will be the industry of
every class of labourers. Above all, sound morals, and pure and simple
tastes, are the best preservatives from wasteful expenditure, both in
the rich, and in the poor; and he that limits his individual
gratification to objects worthy of a rational being, has the best chance
of acquiring a sufficiency for his wants, and of laying by something to
provide a fund for that productive consumption by which the wants of
others are supplied.
With these general remarks upon accumulation and consumption, let us
proceed to consider some points connected with the application of
capital.
The use of capital consists in its advance. It goes before all
operations of labour and trade. It is the power that sets labour and
trade in motion; just as the power of wind, or water, or steam, gives
movement to wheels and pistons.
Let us briefly see how capital operates upon the three great branches of
human industry, namely, upon agriculture, manufactures, and commerce.
A farmer having acquired capital, either by the former savings of
himself or his fathers, or by borrowing from the savings of others,
takes a certain number of acres of land. He changes his capital of money
into other things which are equally capital;--into horses, and cows, and
sheep, and agricultural instruments, and seed. He makes an advance in
the hope of producing a profit. He therefore sets his horses to
work;--he gets milk from his cows;--he shears his sheep;--he fattens his
oxen;--and he put his tools into the hands of labourers, to prepare the
ground for the reception of his seed. He is paying money away on every
side, which he would not do if he did not expect a return, with a
profit. By all these operations--by the work of his horses and his
labourers--by the increase in number, and the increase in value of his
flocks and herds,--and by the harvest after the seed-time,--new produce
is created which produces a return of capital, and ought to produce a
profit if that capital is properly expended. The hope of profit sets the
capital to work, and the capital sets the labour to work. If there were
no capital there would be no labour. Capital gives the labourer the
power, which he has not in himself, of working for a profit.
A capitalist desires to set up a cotton manufactory. He erects
buildings, he purchases machines, he buys cotton-wool, he engages
workmen. The annual value of the buildings and of the machines,--that is
the interest upon their cost, added to their loss by wear and tear--the
price of the raw material, and the wages of the workmen, are all
calculated to be paid out of the price at which the cotton thread will
be sold. To engage in such large undertakings, in which the returns are
slow, there must be great accumulation of capital. To engage in such
large undertakings, in which the risk is considerable, there must be
abundant enterprise. Without extensive accumulations of capital, which
produce enterprise, they could not be engaged in at all.
Capital employed in commerce circulates through the world in a thousand
forms; but it all comes back in produce to the country that sends it
out. Nations that have no accumulated stock, that is no capital, have no
commerce; and where there is no commerce there are no ships and no
sailors; and there are no comforts besides those which spring up at the
feet of the more fortunate individuals of such nations.
In all these operations of capital upon the enterprises of agriculture,
manufactures, and commerce, another power, which is the result of
accumulation, is more or less, in most cases, called into action. That
power is Credit.
Credit, upon a large scale, arose from the difficulty of transmitting
coined money from place to place, and particularly from one country to
another; and hence the invention of bills of exchange. A bill of
exchange is an order by one person on another, to pay to a specified
person, or his order, a sum of money specified, at a certain time and a
certain place. It is evident that the bill of exchange travels as much
more conveniently than a bag of money, as the bag of money travels more
conveniently than the goods which it represents. For instance a box of
hardware from Birmingham might be exchanged for a case of wine from
Bordeaux, by a direct barter between the tradesman at Birmingham and the
tradesman at Bordeaux; but this sort of operation must be a very limited
one. Through the agency of merchants, the hardware finds it way to
Bordeaux, and the wine to Birmingham, without any direct exchange
between either place, or without either having more of the commodity
wanted than is required by the market,--that is, the supply proportioned
to the demand of each town. Through the division of labour, the merchant
who exports the hardware to Bordeaux, and the merchant who imports the
wine from Bordeaux, are different people; and there are other people
engaged in carrying on other transactions at and with Bordeaux, with
whom these merchants come in contact. When, therefore, the merchant at
Bordeaux has to pay for the hardware in England, he obtains a bill of
exchange from some other merchant who has to receive money from England,
for the wine which he has sent there. And thus not only is there no
direct barter between the grower of the wine and the manufacturer of the
hardware, but the wine and the hardware are each paid for without any
direct remittance of coined money from France to England, but by a
transfer of the debt due from one person to another in each country. By
this transfer, the transaction between the buyer and the seller is at
once brought to maturity; and by this operation the buyer and seller are
each benefited, because the exchange which each desires is rendered
incomparably more easy, because more speedy and complete. The same
principle applies to transactions between commercial men in the same
country. The order for payment, which stands in the place of coined
money in one case, is called a Foreign bill of exchange; in the other an
Inland bill of exchange.
The operation of credit in a country whose industry is in an advanced
state of activity, is extended over all its commercial transactions, by
the necessity of obtaining circulating capital for the carrying forward
the production of any commodity, from its first to its last stages. A
manufacturer has a large sum expended in workshops, warehouses,
machinery, tools. This is called his plant, or fixed capital. He has
capital invested also in the raw material which he intends to convert
into some article of utility. He works up his raw material; he makes
advances for the labour required in working it up. The article is at
length ready for the market. The wholesale dealer, who purchases of the
manufacturer, sells to a retailer, who is in the habit of buying upon
credit, long or short, because the article remains a certain time in his
hands before it reaches the consumer, who ultimately pays for it. From
the time when a fleece of wool is taken from the sheep's back in
Australia, till it is purchased in the shape of a coat in London, there
are extensive outlays in every department, which could not be carried on
steadily unless there were facilities of credit from one person
concerned in the production to another person concerned in the
production,--the whole credit being grounded upon the belief that the
debt contracted in so many stages will be repaid by the sale of the
cloth to the consumer. The larger operations of this credit are
represented by bills of exchange, or engagements to pay at a given date;
and these bills being converted into cash by a banker, furnish a
constant supply of consumable commodities to all parties concerned in
advancing the production, till the produce arrives in the hands of the
consumer. To judge of the extent to which credit is carried in this
country, it is only necessary to mention, that five millions sterling
are daily paid in bills and cheques by the London bankers alone; that
the Bank of England alone, in 1853, discounted bills to the amount of
twenty-five millions sterling; and that the note circulation of the
United Kingdom is about forty millions. Credit, undoubtedly, if
conducted upon fair principles, represents some capital actually in
existence, and therefore does not really add to the accumulation or
capital of the producers. But it enables men in trade at once to have
stock and circulating capital--to use even their houses and shops and
manufactories and implements; and to give, at the same time, a security
to others upon that fixed capital. This process is, as it were, as if
they coined that fixed capital. The credit, which is rendered as secure
as possible in all its stages by the accumulating securities of the
drawer, acceptor, and endorsers of a bill of exchange, brings capital
into activity,--it carries it directly to those channels in which it may
be profitably employed,--it conducts it to those channels by a
systematic mode of payment for its use, which we call interest, or
discount;--and it therefore carries forward accumulation to its highest
point of productiveness.
If the reader will turn to the passage in our third chapter, where
Tanner describes the refusal of the traders to give him credit, he will
see how capital, advanced upon credit, sets industry in motion. The
Indians had accumulated no store of skins to exchange for the trader's
store of guns, ammunition, traps, and blankets. The trader, although he
possessed the articles which the Indians wanted, refused to advance them
upon the usual credit; and they were consequently as useless to the
Indians as if they had remained in a warehouse at Liverpool or Glasgow.
When the credit was taken away from the Indians, they could no longer be
exchangers. Their own necessities for clothing were too urgent to enable
them to turn their attention from that supply to accumulate capital for
exchange, after the winter had passed away. They hunted only for
themselves. The trader went without his skins, and the Indians without
their blankets. Doubtless, the keenness of commercial activity soon saw
that this state of things was injurious even to the more powerful party,
for the accustomed credit was presently restored to the Indians. It was
the only means by which that balance of power could be quickly restored
which would enable the parties again to become exchangers. Every
exchange presupposes a certain equality in the exchangers; and credit,
therefore, from the capitalist to the non-capitalist, must, in many
cases, be the first step towards any transaction of mutual profit. If
the Indians had adopted the resolution of Tanner, to do without the
blankets for the winter, and had substituted the more imperfect clothing
of skins,--and if the traders had persevered in their system of refusing
credit, that is, of advancing capital,--the exchange of furs must have
been suspended, until, by incessant industry, and repeated self-denial,
the Indians had become capitalists themselves. They probably, after a
long series of laborious accumulations, might have done without the
credit--that is, have not consumed the goods which they received before
they were in a condition to give their own goods as equivalents; and
then, as it usually happens in the exchanges of civilized society, they
would have ensured a higher reward for their labour. The credit rendered
the labour of the Indians loss severe, inasmuch as it allowed them to
work with the aid of the accumulations of others, instead of with their
own accumulations. But it doubtless gave the traders advantage, and
justly so, in the terms of the exchange. If the Indians had brought
their furs to the mart where the dealers had brought their blankets,
there would have been exchange of capital for capital. As the Indians
had not accumulated any furs, and were only hoping to accumulate, there
was, on the part of the white traders, an advance of a present good for
a remote equivalent. The traders had doubtless suffered by the
casualties which prevented the Indians completing their engagements.
They made a sudden, and therefore an unjust, change in their system. The
forbearance of the Indians shows their respect for the rights of
property, and their consequent appreciation of their own interests. They
might, possessing the physical superiority, have seized the blankets
and ammunition of the traders. If so, their exchanges would have been
at an end; the capital would have gone to stimulate other industry; the
Indians would have ripped up the goose with the golden eggs.
It is easy to see that the employment of capital, through the agency of
credit, in all the minute channels of advanced commerce, must wholly
depend upon the faith which one man has in the stability and the honesty
of another; and also upon the certainty of the protection of the laws
which establish security of property, to enforce the fulfilment of the
contract.
It is necessary to establish this point of the security of property, as
one of the rights, and we may add as the greatest right, of
industry;--and therefore, at the risk of being thought tedious, we may
call attention to the general state of the argument in reply to some who
hold that the rights of property, and the rights of labour, are
antagonistic.
The value of an article produced is the labour required for its
production.
Capital, the accumulation of past labour, represents the entire amount
of that labour which is not consumed;--it is the old labour stored up
for exchange with new labour.
Those who attach an exclusive value to new labour as distinguished from
old labour--or labour as distinguished from capital--say that the new
production shall be stimulated by the old production, without allowing
the old production to be exchanged against the new;--that is, that the
old production shall be an instrument for the reward of new labour, but
not a profitable one to its possessor.
The doctrine therefore amounts to this; that labour shall be exchanged
with labour, but not with the produce of labour,--or that there shall be
no exchange whatever;--for if the present labourers are to have the sole
benefit of the capital, the principle of exchange, in which both
exchangers benefit, is destroyed. There must be an end of all exchanges
when the things to be exchanged are not equally desired by both parties.
If the capitalist is to lend or give the capital to the labourer
without a profit, or without a perfect freedom which would entitle him
to withhold it if no profit could be obtained, the balance is destroyed
between capital and labour. Accumulation is then at an end; because the
security of the thing accumulated to the accumulator is at an end. The
security is at an end, because if the new labour is to have the
advantage of the old labour without compensation or exchange, the new
labour must take the old labour by force or fraud; for the new cannot
proceed without the old;--labour cannot stir without capital.
Accumulation, therefore, being at an end, labour for an object beyond
the wants of an hour is at an end. Society resolves itself into its
first elements.
Strabo, the ancient geographer, has described a tribe amongst whom the
title of the priest to the priesthood was acquired by having murdered
his predecessor; and consequently the business of the priest in
possession was not to discharge the duties of the priesthood, but to
watch sword in hand, to defend himself against the new claimant to the
office. If the principle were to be recognized, that the accumulation of
_former_ labour belongs to the _present_ labourers; and that the best
title to the accumulation is to have added nothing towards it, but only
to be willing to add,--the title of the labourers in possession would
require to be maintained by a constant encounter with new claimants; as
the priest of Strabo, who had dispossessed the previous priest, had to
dread a similar expulsion from his office, by a new violence.
The course of national misery resulting from national disorders always
begins with financial embarrassment; by the destruction of capital, or
its withdrawal from all useful works. Capital was circulated only
because it could be circulated with security. If the present capitalists
were driven away, as some reasoners would imply might easily be done,
and the labourers were left to work the tools and steam-engines--to
labour in the manufactories, and to inhabit the houses of the present
capitalists,--production could not go on an hour, unless the
appropriation of the plunder were secured to the individual plunderers.
In speaking of credit, then, we naturally turn to the only foundation
upon which credit rests--the security of property. Commercial men, who
know how easily credit is destroyed by individual guilt or imprudence,
also know how easily it is interrupted, generally by a combination of
circumstances over which an individual, apart from a nation, has no
control. The instant that any circumstances take place which weaken the
general confidence in the security of property, credit is withdrawn. The
plant remains--the tools and warehouses stand--the shops are open; but
production languishes, labour is suspended. The stocks of consumable
commodities for the maintenance of labour may still in part exist, but
they do not reach the labourer through the usual channels. Then men say,
and say truly, confidence is shaken; the usual relations of society are
disturbed. Capital fences itself round with prudence--hesitates to go on
accumulating--refuses to put its existence in peril--withdraws in great
part from production--
"Spreads its light wings, and in a moment flies."
Within these six years we have had before our eyes a fearful example of
the universal evil created by the sudden loss of confidence in the
security of property; The revolution of 1848, which overthrew the
government of Louis Philippe, was associated with a general belief that
the whole fabric of society was about to be shaken in the overthrow of
capital. The capital was instantly withdrawn from circulation; there was
no exchange; there was no labour. The more immediate sufferers were the
workmen themselves; and the mode in which the ruling power relieved them
by giving forced employment was wholly unavailing, except as a temporary
expedient. After several dreadful months of tumult and bloodshed, a
little confidence was restored by the pressure of an armed force; and
when at length a government was established that rested upon security of
property, it was hailed as the greatest of all blessings, although
accompanied with some evils to which Englishmen, especially, cannot
shut their eyes. When capital and labour could once more work in a safe
union, France quickly developed those great natural resources with which
she is blessed; and the ingenuity of her people was again called into
activity, to carry forward and perfect those resources by higher and
higher exertions of science and skill.
When the great body of the people of a country are so generally educated
as to know that it is the interest of the humblest and the poorest that
property shall be secure, there will be little occasion for fencing
round property with guards, against the secret violence of the midnight
robber, or the open daring of the noonday mob. "It is an enlightened
moral public sentiment that must spread its wings over our dwellings,
and plant a watchman at our doors."[35] A very little insecurity
destroys the working of capital. The cloth trade of Verviers, a town in
France, was utterly ruined, because the morals of the people in the town
were so bad, and the police so ineffectual, that the thefts in the
various stages of the manufacture amounted to eight per cent. upon the
whole quantity produced. The trade of the place, therefore, was
destroyed; and the capital went to encourage labour in places where the
rights of property were better respected.
But, generally speaking, the security of property is not so much
weakened by plunder, as by those incessant contentions which harass the
march of capital and labour; and keep up an irritation between the
classes of the capitalists and the labourers, who ought to be united in
the most intimate compact for a common good. These irritations most
frequently exhibit themselves in the shape of combinations for the
advance of wages. We have no hesitation in declaring our opinion that it
is the positive duty of the working-man to obtain as high wages as he
can extract out of the joint products of capital and labour; and that he
has an equal right to unite with other workmen in making as good a
bargain as he can, consistently with the rights of others, for his
contribution of industry to the business of production. But it is also
necessary for us to declare our conviction that, in too many cases, the
working men attempt an object which no single exertion, and no union
however formidable or complete, can ever accomplish. They attempt to
force wages beyond the point at which they could be maintained, with
reference to the demand for the article produced;--and if they succeed
they extinguish the demand, and therefore extinguish the power of
working at any wages. They drive the demand, and therefore the supply,
into new channels;--and they thrust out capital from amongst them, to
work in other places where it can work with freedom and security. Above
all, such combinations, and the resistance which they call up, have a
tendency to loosen the bonds of mutual regard which ought to subsist
between capitalists and labourers. Their real interests are one and the
same.
All men are united in one bond of interests, and rights, and duties; and
although each of us have particular interests, the parts which we play
in society are so frequently changing, that under one aspect we have
each an interest contrary to that which we have under another aspect. It
is in this way that we find ourselves suddenly bound closely with those
against whom we thought ourselves opposed a moment before; and thus no
class can ever be said to be inimical to another class. In the midst,
too, of all these instantaneous conflicts and unions, we are all
interchangeably related in the double interest of capitalists and
consumers,--that is, we have each and all an interest that property
shall be respected, and that production shall be carried forward to its
utmost point of perfection, so as to make its products accessible to
all. The power of production, in its greatest developments of industry,
is really addressed to the satisfaction of the commonest wants. If
production, as in despotic countries, were principally labouring that
some men might wear cloth of gold whilst others went naked, then we
should say that production was exclusively for the rich oppressor. But,
thank God, the man who _exclusively_ wears "purple and fine linen every
day" has ceased to exist. The looms do not work for him alone, but for
the great mass of the people. It is to the staple articles of
consumption that the capitals of manufactures and commerce address their
employment. Their employment depends upon the ability of the great body
of the people to purchase what they produce. The courtiers of the
fifteenth century in France carried boxes of sugar-plums in their
pockets, which they offered to each other as a constant compliment; the
courtiers of the next age carried gingerbread in the same way; and
lastly, the luxury of snuff drove out the sugar-plums and the
gingerbread. But the consumption of tobacco would never have furnished
employment to thousands, and a large revenue to the state, if the use of
snuff had rested with the courtiers. The producers, consequently, having
found the largest, and therefore the most wealthy class of consumers
amongst the working men, care little whether the Peer wears a silk or a
velvet coat, so that the Peasant has a clean shirt. When capital and
labour work with freedom and security, the wants of all are supplied,
because there is cheap production. It is a bad state of society where
"One flaunts in rags, one flutters in brocade."
Those who like the brocade may still wear it in a state of things where
the rights of industry are understood; but the rags, taking the average
condition of the members of society, are banished to the lands from
which capital is driven,--while those who labour with skill, and
therefore with capital, have decent clothes, comfortable dwellings,
wholesome food, abundant fuel, medical aid in sickness, the comfort and
amusement of books in health. These goods, we have no hesitation in
saying, all depend upon the security of property; and he that would
destroy that security by force or fraud is the real destroyer of the
comforts of those humbler classes whose rights he pretends to advocate.
The principles which _we_ maintain, that the interests of all men, and
of the poorer classes especially, are necessarily advanced in a
constantly increasing measure by the increase of capital and skill, have
been put so strikingly by a philosophical writer, that we cannot forbear
quoting so valuable an authority in support and illustration of our
opinions:--
"The advantage conferred by the augmentation of our physical
resources, through the medium of increased knowledge and improved
art, have this peculiar and remarkable property,--that they are in
their nature diffusive, and cannot be enjoyed in any exclusive
manner by a few. An eastern despot may extort the riches and
monopolize the art of his subjects for his own personal use; he
may spread around him an unnatural splendour and luxury, and stand
in strange and preposterous contrast with the general penury and
discomfort of his people; he may glitter in jewels of gold and
raiment of needle-work; but the wonders of well-contrived and
executed manufacture which we use daily, and the comforts which
have been invented, tried, and improved upon by thousands, in
every form of domestic convenience, and for every ordinary purpose
of life, can never be enjoyed by him. To produce a state of things
in which the physical advantages of civilized life can exist in a
high degree, the stimulus of _increasing comforts and constantly
elevated desires_ must have been felt by millions; since it is not
in the power of a few individuals to create that wide demand for
useful and ingenious applications, which alone can lead to great
and rapid improvements, unless backed by that arising from the
speedy diffusion of the same advantages among the mass of
mankind."[36]
* * * * *
In looking back upon all the various circumstances which we have
exhibited as necessary for carrying industry to the greatest point of
productiveness, we think that we must have established satisfactorily
that the two great elements which concur in rendering labour in the
highest degree beneficial, are, 1st, the accumulated results of past
labour, and 2nd, the contrivances by which manual labour is
assisted,--those contrivances being derived from the accumulations of
knowledge. Capital and skill, therefore, are essential to the productive
power of labour. The different degrees in which each possesses capital
and skill make the difference between an English manufacturer and a
North American savage; and the less striking gradations in the
productive power of the English manufacturer of the present time, and
the English manufacturer of five hundred years ago, may be all resolved
into the fact that the one has at his command a very large amount of
capital and skill, and that the other could only command a very small
amount of the same great elements of production.
We think, also, that we have shown that the accumulation of former
labour in the shape of tangible wealth, and the accumulation of former
labour in the shape of the no less real wealth of knowledge, are
processes which go on together, each supporting, directing, and
regulating the other. Knowledge is the offspring of some leisure
resulting from a more easy supply of the physical wants; and that
leisure cannot exist unless capital exists; which allows some men to
live upon former accumulations. Capital, therefore, may be said to be
the parent of skill, as capital and skill united are the encouragers and
directors of profitable labour.
We have shown that the only foundation of accumulation is security of
property--we have shown, too, that labour is the most sacred of
properties. It results, therefore, that in any state of society in which
the laws did not equally protect the capitalist and the labourer as free
exchangers, each having the most absolute command over his property,
compatible with a due regard to the rights of the other,--in such a
state, where there was no real freedom and no real security, there would
be very imperfect production; and production being imperfect, all men,
the capitalists and the labourers, would be equally destitute, weak,
ignorant, and miserable.
It is under these several conditions, all working together with united
force, that the entire labour of this country, and indeed of all other
countries advanced in civilization, must now be directed. The enormous
increase of productiveness which we have exhibited, in so many
operations of industry, is chiefly the result of production carried on
upon a large scale, and working with every possible application of
science. It is in this sense that Knowledge is Power; and skilled labour
is a part of that power.
[Illustration: Medal to Locke]
The mode in which the respective proportions of capitalist and labourer
are assigned in the division of the products of industry, are called by
one Profit, by the other Wages. If we were writing a treatise on
Political Economy, we should have to regard Rent as distinct from the
profits of capital. But for our purpose this is unnecessary. We proceed,
then, to consider the practical relations of Profit and Wages, as they
exist amongst us. Unquestionably the only solid foundation for these
relations must be equal justice; without which there can be neither
permanent prosperity nor increasing intelligence. A medal to our great
philosopher, Locke, exhibits Justice and Plenty enthroned together.
[33] See p. 61.
[34] An Essay on the 'Relations between Labour and Capital.' By C.
Morison, p. 34.
[35] Everett's 'Address to the Working Man's Party.'
[36] Sir John Herschel's 'Discourse on the Study of Natural Philosophy.'