Capital and labor

“ They are his property, his is the might. What right has capital to rob the workingclass of part of the fruit of their industry and labor? Are the wages-laborers, the mechanics, the farmhands property of the capitalist? ”

“ In the first place, the conflict between labor and capital is over the division of the join product. Capital and labor apply themselves to raw material and make it into a finished product. The difference between the value of the raw material and the value of the finished product is the value they have added to it by their joint effort. This added value is, therefore, their joint product, and it is over the division of this joint product that the struggle between labor and capital takes place. Labor takes its share in wages; capital takes its share in profits. ”

“ Capital furnished the factory, the machines, and paid all the expenses. Labor furnished labor. By the joint effort of capital and labor one hundred dollars of value was added. Are you all agreed so far?”
Heads nodded around the table in affirmation.
“Labor and capital having produced this one hundred dollars, now proceed to divide it. The statistics of this division are fractional; so let us, for the sake of convenience, make them roughly approximate. Capital takes fifty dollars as its share, and labor gets in wages fifty dollars as its share. ”

“ 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. ”

“ If Capital obtains this right, in addition to financial reward for the use of capital for the time for which it is invested, is Labor not in justice equally entitled, in addition to its monetary reward, to a voice in the control of industry in which, for the time being, its life and skill are likewise invested? ”

“ As long as the wage-laborer remains a wage-laborer, his lot is dependent upon capital. That is what the boasted community of interests between worker and capitalists amounts to.
If capital grows, the mass of wage-labor grows, the number of wage-workers increases ; in a word, the sway of capital extends over a greater mass of individuals. ”

“ But—is not the capital as necessary as the labor? Can labor produce anything without capital? There must be raw material, there must be tools, there must be machines, there must be workshops, warehouses and so forth; there must be soil to be tilled etc. What can mere labor do without all these? True! Labor cannot exist without capital. But this is not the question. Is it necessary that capital, {the real foundation of successful labor, and which has been produced by labor, be owned by a minority? Has this minority a right to continue to take the best part of what labor produces? ”

“ No, labor consumes all of the total product that its wages will buy back.
"Two billions are left to capital. After it has paid its expenses, does it consume the remainder? Does capital consume all of its two billions?" ”

“ But to say that capital may limit the form of industry or the productiveness of industry is a very different thing from saying that capital limits industry. For the dictum of the current political economy that “capital limits industry,” means not that capital limits the form of labor or the productiveness of labor, but that it limits the exertion of labor. ”

“ Capital is but a form of labor, and its distinction from labor is in reality but a subdivision, just as the division of labor into skilled and unskilled would be. In our examination we have reached the same point as would have been attained had we simply treated capital as a form of labor, and sought the law which divides the produce between rent and wages; that is to say, between the possessors of the two factors, natural substances and powers, and human exertion—which two factors by their union produce all wealth. ”

“ Thus any tendency on the part of interest to rise above the equilibrium with wages must immediately beget not only a tendency to direct labor to the production of capital, but also the application of wealth to the uses of capital; while any tendency of wages to rise above the equilibrium with interest must in like manner beget not only a tendency to turn labor from the production of capital, but also to lessen the proportion of capital by diverting from a productive to a non-productive use some of the articles of wealth of which capital is composed. ”

“ That portion of the capital or wealth of a country which the employers of labor intend to or are willing to pay out in the purchase of labor, may be much larger at one time than another. But whatever may be its absolute magnitude, it obviously forms the only source from which any portion of the wages of labor can be derived. ”

“ In each of these three modes of production capital may aid labor—or, to speak more precisely, in the first mode capital may aid labor, but is not absolutely necessary; in the others capital must aid labor, or is necessary.
Now, while by adapting capital in proper forms we may increase the effective power of labor to impress upon matter the character of wealth, as when we adapt wood and iron to the form and use of a plane ”

“ Everywhere there were inferior, middling, and superior laborers, earning corresponding wages; and everywhere the skillful and handiest laborers passed naturally into the class of employers and capitalists. It was a free and wholesome coöperation of capital and labor to supply the best and cheapest articles to the cash demand of a vigorous consumption; and the profits arising from the trade were divided between wages and capital wholly in proportion to the special skill and industry of the individual employers and employed ”

“ Involuntary labor, requiring the investment of large capital, can only be profitable when employed in the production of a few favored articles confined by nature to special districts, and paying larger returns than the usual agricultural products spread over more considerable portions of the earth. ”

“ The capitalist, then, buys as much labor-force as he desires, or as his means allow, at the market price, determined in the way we have seen. This labor-force he proposes to utilise for his own advantage; with some of his capital he buys it; some of his capital consists in machinery, and the labor-force set at work on this machinery is to produce wealth. ”

“ There is a certain relation or ratio between wages and interest, fixed by causes, which, if not absolutely permanent, slowly change, at which enough labor will be turned into capital to supply the capital which, in the degree of knowledge, state of the arts, density of population, character of occupations, variety, extent and rapidity of exchanges, will be demanded for201 production, and this relation or ratio the interaction of labor and capital constantly maintains; hence interest must rise and fall with the rise and fall of wages. ”

“ His entire product belongs to the capitalist, and out of this resource he pays the wages [Pg 166] for the commodity labor, also for other commodities such as raw materials, and appropriates all of the balance and converts it into capital with which he not only continues but increases the exploitation of his workers. ”

“ If an increased quantity of the particular article is not required, and part of the laborers in consequence lose their employment, the capital which maintained and employed them is also set at liberty, and the general produce of the country is increased by some other application of their labor.
A considerable part of the saving of labor effected by substituting the large system of production for the small, is the saving in the labor of the capitalists themselves. ”

“ Indeed a more striking expression could not have been found! True the capitalist rulers of labor are not prevented by it from heaping capital upon capital, but heavily does the "chain of economic phenomena" press upon the laboring class. ”

“ If these were based in correct universal principles, there could be no questions to settle between labor and capital. Hence it is that it becomes specially requisite at this time, when labor is rising to a sense of the unjust position it is confined to, that these questions of finance should be agitated as the most important ones for adjustment. ”

“ PART III—AMERICAN SOCIAL PROBLEMS CHAPTER XVIII INDUSTRIAL RELATIONS 181. LABOR AND CAPITAL.—Strictly speaking, five distinct factors are involved in production: land, labor, capital, co÷rdination, and government. As a matter of fact, we are accustomed to speak of the immediate conduct of industry as involving only two factors: labor and capital. Used in this sense, the term labor refers to the masses of hired workmen, while the term capital is held to include not only the individual who has money to invest, i.e. the capitalist proper, but also the entrepreneur, or managing employer. ”

“ Socialists call all kind of property in this respect "capital," this expression comprising all means for production, and because one class of the people possess, by their wealth, these means, the capital—, another, and by far the larger class, have only their physical or mental strength and skill for labor, hence the capital becomes a means for enslaving workers, forcing them to give up a part of what they have produced to him, who owns the capital. ”

“ Interest is determined by the equation between the demands of borrowers and the supply of capital offered by lenders. Or, if we take what is given as the law of profits, it is determined by wages, falling as wages rise and rising as wages fall—or, to use the phrase of Mill, by the cost of labor to the capitalist. ”

“ It is the effort to place capital on an equal footing with, if not above, labor, in the structure of the government. It is assumed that labor is available only in connection with capital; that nobody labors unless somebody else, owning capital, somehow by the use of it induces him to labor. ”

“ There are in the savings-banks of many manufacturing centers in our country amounts which if capitalized would place the workingmen of those towns in industrial independence; moneys which, in some instances, are actually furnishing the borrowed capital for their own employers. ”

“ For if wages fall, interest must also fall in proportion, else it becomes more profitable to turn labor into capital than to apply it directly; while, if interest falls, wages must likewise proportionately fall, or else the increment of capital would be checked. ”

“ As the rendering of labor precedes the payment of wages, and as the rendering of labor in production implies the64 creation of value, the employer receives value before he pays out value—he but exchanges capital of one form for capital of another form. For the creation of value does not depend upon the finishing of the product; it takes place at every stage of the process of production, as the immediate result of the application of labor, and hence, no matter how long the process in which it is engaged, labor always adds to capital by its exertion before it takes from capital in its wages. ”

“ There are the colossal combinations of capital I have mentioned on one side, and on the other the colossal and constantly growing organizations of working men, who from time to time startle the country with their concerted strikes and other demonstrations of a common will, endeavoring to force organized capital engaged in industrial production to yield to labor a proportion of the proceeds, such as labor considers its just and equitable share. ”

“ Another swing of the searchlight and it falls upon The Labor and Capital Question.
After all the years of education, agitation and legislation, we find capital combining in great corporations on one hand, and labor organizing in great trade unions on the other. Like two great armies they face each other, both determined to win. [page 86] While capital is expanding on one side, the wants of the laboring classes are expanding on the other. They see excursion trains bound for world's fairs; they want to go. They see stores crowded with the necessaries and luxuries of life; they want a share. ”

“ The share of produce assigned to each group is divided in fixed proportions among three elements—labor, capital, and talent; the part assigned to talent being awarded by the suffrages of the group itself, and it is hoped that among the variety of human [122] capacities all, or nearly all, will be qualified to excel in some group or other. The remuneration for capital is to be such as is found sufficient to induce savings from individual consumption, in order to increase the common stock to such point as is desired. ”

“ Capital is a result of labor, and is used by labor to assist it in further production. Labor is the active and initial force, and labor is therefore the employer of capital. ”

“ Labor and capital co÷perate actively in production, while the other factors remain somewhat in the background. As we have seen, both labor and capital are essential to industry, and fundamentally their interests are reciprocal. ”

“ the more the division of labor and the application of machinery extend, the more does competition extend among the workers, the more do their wages shrink together. ”

“ When it is plenty all sorts of productive work is stimulated. Labor is the master of capital, and industrial enterprise gains a more than proportionally large return for its outlay.” Page 209: “The possession of a large quantity of money 365enables any country to organize its industries upon such a scale as to carry its division of labor to such perfection as will bring down the prices of all the products of industry, while affording a larger return to both capitalist and laborer. ”