Henry George

“ Let me call attention to what is often forgotten, namely that the terms "Wealth," "Capital," "Wages" and the like, as used in Political Economy are general terms. Nothing can be generally affirmed or denied of them that cannot be affirmed or denied of the whole class of things they represent. The failure to bear this in mind has led to much confusion of thought, and permits fallacies, otherwise transparent, to pass for obvious truths. Wealth is a general term, and the idea of wealth, it must be remembered, involves the idea of exchangeability. ”

“ Increase in land values does not represent increase in the common wealth, for what landowners gain by higher prices the tenants or purchasers who must pay them will lose. And all this relative wealth, which, in common thought and speech, in legislation and law, is undistinguished from actual wealth, could, without the destruction or consumption of anything more than a few drops of ink and a piece of paper, be utterly annihilated. ”

“ Definitions of wealth Thus wealth, as alone the term can be used in Political Economy, consists of natural products that have been secured, moved, combined, separated, or in other ways modified by human exertion, so as to fit them for the satisfaction of human desires. It is, in other words, labour that is
impressed upon matter in such a way as to store up the power of human labour to minister to human desires, as the heat of the sun is stored up in coal. ”

“ The term land embraces, in short, all natural materials, forces, and opportunities, and, therefore, nothing that is freely supplied by nature can properly be classed as capital. A fertile field, a rich vein of ore, a falling stream which supplies power, may give to the possessor advantages equivalent to the possession of capital, but to class such things as capital would be to put an end to the distinction between land and capital, and, so far as they relate to each other, to make the two terms meaningless. ”

“ The looms of a factory would be capital, but not the sewing machine of a woman who does only her own work; a building let for hire, or used for business or productive purposes, but not a dwelling-house occupied by the owner. ”

“ But when used as a term of Political Economy it must be limited to a much more definite meaning, because many things are commonly spoken of as wealth that cannot, in taking account of collective or general wealth, be considered as wealth at all. Such things have an exchange value, and are commonly spoken of as wealth, insomuch as they represent as between individuals, or between sets of individuals, the power of obtaining wealth; but they are not truly wealth, inasmuch as their increase or decrease does not affect the sum of wealth. ”

“ It is as to whether its services or uses are to be exchanged or not that makes a tool an article of capital or merely an article of wealth. Thus, wealth used in the construction of a railway, a public telegraph line, a theatre, a hotel, etc., may be said to be placed in the course of exchange. The exchange is not effected all at once, but little by little, with an indefinite number of people. Yet there is an exchange, and the " consumers " of the railway, the telegraph line, the theatre or hotel, are not the owners, but the persons who from time to time use them. ”

“ Labour The term labour includes all human exertion. Hence human powers whether natural or acquired can never properly be classed as capital. In common parlance we often speak of a man's knowledge, skill, or industry as constituting his capital ”

“ The nature of wealth When we speak of a community increasing in wealth we mean that there is an increase of certain tangible things such as buildings, cattle, tools, machinery, agricultural and mineral products, manufactured goods, ships, waggons, furniture and the like, which have an actual and not merely a relative value. ”

“ Therefore, not all things which have an exchange value are wealth, in the only sense in which the term can be used in Political Economy. Only such things can be wealth the production of which increases and the destruction of which decreases the aggregate of wealth. ”

“ Superiority in such qualities may augment the income of an individual just as capital would, and an increase in the knowledge, skill, or industry of a community may have the same effect in increasing its production as would an increase of capital; but this effect is due to the increased power of labour and not to capital. ”

“ Such are bonds, mortgages, promissory notes, bank bills, or other stipulations for the transfer of wealth. Such are slaves, whose value represents merely the power of one class to appropriate the earnings of another class. Such are lands, or other natural opportunities, the value of which is but the result of the acknowledgment in favour of certain persons of an exclusive right to their use and represents merely the power thus given to the owners to demand a share of the wealth produced by those who use them. ”

“ The increase of such things constitutes an increase of wealth; their decrease is a lessening of wealth; and the community that has, in proportion to its numbers, most of such things is the wealthiest community. The common character of those things is that they consist of natural substances or products which have been adapted by human labour to human use or gratification, their value depending on the amount of labour which upon the average would be required to produce things of like kind. ”

“ Increase in the amount of bonds, mortgages, notes, or bank bills cannot increase the wealth of the community, since this comprises both those who are entitled to receive and those who promise to pay. Similarly, the wealth of a people would not be increased by the enslavement of some of them, for what the enslavers gained the enslaved would lose. ”

“ To the former word a sufficiently definite meaning has been given by economic writers, but the ambiguities which have attached to the use of the latter in Political Economy will require a detailed examination.
As used in common discourse " wages " means a compensation paid to a hired person for his services; and we speak of one man " working for wages," in contradistinction to another who is " working for himself." The use of the term is still further narrowed by the habit of applying it solely to compensation paid for manual labour. ”