The enduring conflict: Labor, capital, and the historical struggle for productivity's true engine

“ If we eliminate from consideration the element land, and we may safely do so in the present discussion, the production of wealth is the result of two factors, labor and capital, both of which are more or less variable in character. The development of modern power-driven machinery has in recent times been remarkable, and no one would for a moment maintain that the end is in sight. Greater care in the construction and location of mechanical devices already invented will immensely increase their efficiency. ”

“ Capital is Wealth Appropriated to Reproductive Employment. It has been seen in the preceding chapters that besides the primary and universal requisites of production, labor and natural agents, there is another requisite without which no productive operations beyond the rude and scanty beginnings of primitive industry are possible—namely, a stock, previously accumulated, of the products of former labor. This accumulated stock of the produce of labor is termed Capital. ”

“ What capital does for production is, to afford the shelter, protection, tools, and materials which the work requires, and to feed and otherwise maintain the laborers during the process. These are the services which present labor requires from past, and from the produce of past, labor. Whatever things are destined for this use—destined to supply productive labor with these various prerequisites—are Capital. ”

“ Now that we are grounded on these general laws which govern wages just as much as the price of any other commodity, we can examine our subject more exactly.
Capital consists of raw material, implements of labor, and all kinds of means of subsistence, which are used for the production of now implements and new means of subsistence. All these factors of capital are created by labor, are products of labor, are stored-up labor. Stored-up labor which serves as the means of new production is capital. ”

“ In the field of economic affairs, our objectives will be to hold down taxes, to continue controlling inflation, to promote economic growth, to increase productivity, to encourage foreign trade, to keep farm income high, to bolster small business, and to promote better labor-management relations. ”

“ Fiscal restraint must be continued in the years ahead. Budgets must be tight enough to convince those who set wages and prices that the Federal Government is serious about fighting inflation but not so tight as to choke off all growth.
Careful budget policy should be supplemented by other measures designed to reduce inflation at lower cost in lost output and employment. These other steps include measures to increase investment— such as the tax proposals included in my 1982 budget— and measures to increase competition and productivity in our economy. ”

“ Capital, freed from the menace of visionary and experimental policies in revenue and finance, emerges from its hiding place and seeks investment in legitimate fields of profitable pursuits; an increasing demand for labor sets in, and uncertain employment and still less certain wages are succeeded by steady employment and gradually increasing wages. Capital and labor shares alike the advantages flowing from a wise and beneficent tariff system, while the nation at large moves on to that proud eminence from which it caught the admiring gaze of an astonished world. ”

“ The budget recommendations I shall shortly transmit to the Congress show that we can expect a substantial improvement in our fiscal position over the next few years, as the cost of some of our extraordinary postwar programs declines, and as the Government revenue rises as a result of growth in employment and national income. To further improve our fiscal outlook, we should make some changes in our tax system which will reduce present inequities, stimulate business activity, and yield a moderate amount of additional revenue. ”

“ Restoration of national income, which shows continuing gains for the third successive year, supports the normal and logical policies under which agriculture and industry are returning to full activity. Under these policies we approach a balance of the national budget. National income increases; tax receipts, based on that income, increase without the levying of new taxes. That is why I am able to say to this, the Second Session of the 74th Congress, that it is my belief based on existing laws that no new taxes, over and above the present taxes, are either advisable or necessary. ”

“ Capital cannot move a wheel without Labor, nor Labor advance beyond a mere primitive existence without Capital. But with Labor and Capital as partners, wealth is created and ever greater productivity made possible. In the development of this partnership, the greatest social service is rendered by that man who so coöperates in the organization of industry as to afford to the largest number of men the greatest opportunity for self-development, and the enjoyment by every man of those benefits which his own work adds to the wealth of civilization. ”

“ The author considers the existing methods of distributing the products of human activity by means of the wages system, and demonstrates that it tends to establish working people in a state of independence rather than of subjection; to promote industrial freedom and not to produce 'industrial slavery.' He shows how intimately the welfare of laborers is connected with the prosperity of their employers, and how the attempts to diminish the wealth of corporations may diminish the fund of capital out of which laborers are paid. ”

“ The interests of the capitalist and the laborer are therefore identical, assert the bourgeoisie and their economists. And, in fact, so they are! The laborer perishes if capital does not employ him. Capital perishes if it does not exploit labor, and in order to exploit it, it must buy it. The faster the capital devoted to production—the productive capital— increases, and the more successfully the industry is carried on, the richer do the bourgeoisie become, the better does business go, the more laborers does the capitalist require, and the dearer does the laborer sell himself. ”

“ We saw in Part IV., when analysing the production of relative surplus-value: within the capitalist system all methods for raising the social productiveness of labour are brought about at the cost of the individual labourer; all means for the development of production transform themselves into means of domination over, and exploitation of, the producers; they mutilate the labourer into a fragment of a man, degrade him to the level of an appendage of a machine, destroy every remnant of charm in his work and turn it into a hated toil ”

“ And in the case where capital keeps growing, in the circumstance which we have said are the best for the worker, what will be his lot? He will go to the wall just the same. The growth of productive capital implies the accumulation and the concentration of capital. The centralization of capital involves a greater division of labor and a greater use of machinery. The greater division of labor destroys the especial skill of the laborer; and by putting in the place of this skilled work labor which anybody can perform, it increase competition among the workers. ”

“ I shall, therefore, from this day onward vigorously exert all efforts to increase the productivity of the farmer and the laborer, to teach the common man scientific methods to lighten his burdens, to give land to the landless and in time, to place within his means the essential commodities for a decent living. ”

“ The first remedy for this state of things which springs to the mind of the social reformer is a legal minimum wage. The discussion of a minimum wage, which is at the same time to be a family wage, is exceedingly difficult. We realise that wages are not now paid on a family basis. If they were we should not have 2,500,000 adult men receiving for full-time work a sum which the writer has no hesitation in saying is less than sufficient for the proper maintenance, and that on the lowest scale, of one adult person. ”

“ Within the maximum financial capacity of the government, we shall initiate and carry out a program to help solve unemployment and underemployment through massive productive and labor-intensive projects calculated to create multiple job opportunities while at the same time increasing the production, productivity and wealth of the land. ”

“ The essential human needs for our citizens must be given the highest priority. The Federal Government must lead the way in investment in the Nation's technological future. The Federal Government has an obligation to nurture and protect our environment— the common resource, birthright, and sustenance of the American people.
My 1982 budget continues to support these principles. It also proposes responsible tax reductions to encourage a more productive economy, and adequate funding of our highest priority programs within an overall policy of constraint. ”

“ Capital a time-saver.—All these forms of wealth serve in production by extending the possible waiting between an effort of any kind and the greater satisfaction secured by it. No community could begin farming as a business until it had secured housing and seeds and tools and provisions in some form for most of a year's sustenance. All the capital that constructs a great thoroughfare is used in getting ready to satisfy wants in many future years. Capital furnishes subsistence for laborers of every kind during those years of waiting for a product. ”

“ Capital, therefore, increases the power of labor to produce wealth: (1) By enabling labor to apply itself in more effective ways, as by digging up clams with a spade instead of the hand, or moving a vessel by shoveling coal into a furnace, instead of tugging at an oar. (2) By enabling labor to avail itself of the reproductive forces of nature, as to obtain corn by sowing it, or animals by breeding them. ”

“ Marbles to play with, houses to live in, motor-cars to go joy-riding in—all these are assets which can be disposed of, and so, in a sense, may be called capital. But the businesslike meaning of the word is the tools and equipment of industry, because it is only by their possession that the wealth of mankind not only increases man's present enjoyment, but enhances his future output of the goods necessary for his existence. ”

“ So with all other details of the Productive Process, from natural raw materials to and including delivery to ultimate consumers. Capital is produced by Labor from and upon Land and in forms of Wealth—either Artificial materials or Artificial contrivances—which, being adapted and devoted to further Production of Wealth, are part of Labor’s artificial materials or mechanism or both—Wealth produced for augmenting Productive power. In Economic phrasing, Wealth used in the Production of Wealth is Capital. ”

“ The present century has been marked by a prodigious increase in wealth-producing power. The utilization of steam and electricity, the introduction of improved processes and labor-saving machinery, the greater subdivision and grander scale of production, the wonderful facilitation of exchanges, have multiplied enormously the effectiveness of labor. ”

“ The more prosperous the nation, the greater is the demand from those who cannot spend their huge incomes for safe, paying investment opportunities.
The immense productivity of the present-day system of industry has added greatly to the amount of surplus seeking investment. Each invention, each labor saving device, each substitution of mechanical power that multiplies the productive capacity of industry at the same time increases the surplus at the disposal of the plutocracy. ”

“ These other steps include measures to increase investment--such as the tax proposals included in my 1982 budget--and measures to increase competition and productivity in our economy. Voluntary incomes policies can also directly influence wages and prices in the direction of moderation and thereby bring inflation down faster and at lower cost to the economy. Through a tax-based incomes policy (TIP) we could provide tax incentives for firms and workers to moderate their wage and price increases. In the coming years, control of Federal expenditures can make possible periodic tax reductions. ”

“ While most inventions at first draw capital from the social fund to the point where they are applied, many of them soon liberate capital by cheapening particular appliances of production, and nearly all of them, by means of the profits they insure, ultimately add to the social capital.
The Vital Importance of Continued Improvement.—Intelligent study will make it clear to every one that any assertion that machinery is the enemy of labor is not merely erroneous, it is a contradiction of the most striking and important fact connected with general progress. ”

“ In manufacture, in order to make the collective labourer, and through him capital, rich in social productive power, each labourer must be made poor in individual productive powers. “Ignorance is the mother of industry as well as of superstition. Reflection and fancy are subject to err; but a habit of moving the hand or the foot is independent of either. Manufactures, accordingly, prosper most where the mind is least consulted, and where the workshop may ... be considered as an engine, the parts of which are men.” ”

“ But what effect do these conditions, which are inseparable from the growth of productive capital, have upon the determination of wages?
The greater division of labor enables one laborer to accomplish the work of five, ten, or twenty laborers; it therefore increases competition among the laborers fivefold, tenfold, or twentyfold. The laborers compete not only by selling themselves one cheaper than the other, but also by one doing the work of five, then ten, or twenty; and they are forced to compete in this manner by the division of labor, which is introduced and steadily improved by capital. ”

“ The faster productive capital increases, the more does the division of labour and the employment of machinery extend. The more the division of labour and the employment of machinery extend, so much the more does competition increase among the labourers and so much the more do their average wages dwindle. ”

“ If machinery be the most powerful means for increasing the productiveness of labour—i.e., for shortening the working time required in the production of a commodity, it becomes in the hands of capital the most powerful means, in those industries first invaded by it, for lengthening the working day beyond all bounds set by human nature. ”

“ But in its blind unrestrainable passion, its were-wolf hunger for surplus-labour, capital oversteps not only the moral, but even the merely physical maximum bounds of the working day. It usurps the time for growth, development, and healthy maintenance of the body. It steals the time required for the consumption of fresh air and sunlight. It higgles over a meal-time, incorporating it where possible with the process of production itself, so that food is given to the labourer as to a mere means of production, as coal is supplied to the boiler, grease and oil to the machinery. ”

“ It is the production and reproduction of that means of production so indispensible to the capitalist: the labourer himself, The individual consumption of the labourer, whether it proceed within the workshop or outside it, whether it be part of the process of production or not, forms therefore a factor of the production and reproduction of capital; just as cleaning machinery does, whether it be done while the machinery is working or while it is standing. ”

“ But what is the meaning of the increase of productive capital? The increase of the power of stored-up labor over living labor. The increase of the dominion of the bourgeoisie over the laboring class. As fast as wage-labor creates its own antagonist and its own master in the dominating power of capital, the means of employment, that is, of subsistence, flow back to it from its antagonist; but only on condition that it convert itself anew into a portion of capital, and thus becomes the lever whereby the increase of capital may be again hugely accelerated. ”

“ Money makes money. The labour of the past, appropriated and capitalised, crushes the labour of the present. ‘The dead captures the living.’ ‘The instrument of labour, which has become independent, and has exchanged rôles with the workmen, which has degraded the living workmen to a dead instrument of labour, and has developed itself, the dead instrument of labour, into the living organ of production—that is capital.’ [9] In such highly metaphorical language does Lassalle sum up his history of capital. ”

“ But what is growth of productive capital? Growth of the power of accumulated labor over living labor; growth of the rule of the bourgeoisie over the working class. When wage-labor produces the alien wealth dominating it, the power hostile to it, capital, there flow back to it its means of employment, i.e., its means of subsistence, under the condition that it again become a part of capital, that it become again the lever whereby capital is to be forced into an accelerated expansive movement. ”

“ All that we want to do away with is the miserable character of this appropriation, under which the laborer lives merely to increase capital, and is allowed to live only in so far as the interest of the ruling class requires it. ”

“ Experience shows how fatally easy it is for people to label all poverty as the result of drink, extravagance, or laziness. It is done every day in the year by writers and speakers and preachers, as well as by hundreds of well-meaning folk with uneasy consciences. They see, or more often hear of, people whose economy is different from their own. Without trying to find out whether their own ideas of economy are practicable for the people in question, they dismiss their poverty as “the result of extravagance” or drink. ”

“ But the poor man, having no expenditure other than food which can be cut down, is obliged, in order to pay one-third of his income in rent, to cut down food.
The chief item in every poor budget is rent, and on the whole and roughly speaking it is safe to say that a family with three or more children is likely to be spending between 7s. and 8s. a week on rent alone. Why do they spend so much when, as we see, it must mean cutting down such a primary necessary as food? ”

“ The interests of Capital can no more be neglected than those of Labor.
At the same time I feel that a prime consideration in the carrying on of industry should be the well-being of the men and women engaged in it, and that the soundest industrial policy is that which has constantly in mind the welfare of the employees as well as the making of profits, and which, when the necessity arises, subordinates profits to welfare.
In order to live, the wage-earner must sell his labor from day to day. Unless he can do this, the earnings of that day’s labor are gone forever. ”

“ The aim of the laborer should be, not to get his living, to get "a good job," but to perform well a certain work; and, even in a pecuniary sense, it would be economy for a town to pay its laborers so well that they would not feel that they were working for low ends, as for a livelihood merely, but for scientific, or even moral ends. Do not hire a man who does your work for money, but him who does it for love of it. ”

“ We shall also concentrate our efforts to raise agricultural productivity throughout all the regions in the country in order to achieve self-sufficiency in food production. It is incumbent upon government to provide improved irrigation and water control facilities, the continuation of subsidies for fertilizers and seeds, expansion of research programs for developing high-yielding and disease-resistant varieties of agricultural crops, the establishment of liberal credit facili­ties, and the improvement of marketing and transportation networks. ”

“ Large investments of capital, specialization in production, the use of machinery in every process, and the consequent subdivision of labor in particular lines in which the technical skill of the handicraftsman is not required, together with the utilization of waste products and the rapid exchange of commodities, mark the progress of activity in the industrial arts. ”

“ And further, it is assumed that whoever is once a hired laborer is fixed in that condition for life.
Now there is no such relation between capital and labor as assumed, nor is there any such thing as a free man being fixed for life in the condition of a hired laborer. Both these assumptions are false, and all inferences from them are groundless.
Labor is prior to and independent of capital. Capital is only the fruit of labor, and could never have existed if labor had not first existed. Labor is the superior of capital, and deserves much the higher consideration. ”