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. ”

“ 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?" ”

“ Hence, if we define capital as wealth in course of exchange, understanding exchange to include not merely the passing from hand to hand, but also such transmutations as occur when the reproductive or transforming forces of nature are utilized for the increase of wealth, we shall, I think, comprehend all the things that the general idea of capital properly includes, and shut out all it does not. Under this definition, it seems to me, for instance, will fall all such tools as are really capital. ”

“ And in all the infinity of great undertakings which engage the restless activities of our leaders of industry, capital is demanded, not in thousands, but in millions—not in millions, but in hundreds of millions. ”

“ Let us therefore consider whether, and in what cases, the property of those who live on the interest of what they possess, without being personally engaged in production, can be regarded as capital. It is so called in common language, and, with reference to the individual, not improperly. ”

“ For it is as to whether its services or uses are to be exchanged or not which makes a tool an article of capital or merely an article of wealth.47 Thus, the lathe of a manufacturer used in making things which are to be exchanged is capital, while the lathe kept by a gentleman for his own amusement is not. ”

“ The payment of wages, therefore, always implies the previous rendering of labour. Now, what does the "rendering" of labour in production imply? Evidently the production of wealth, which, if it is to be exchanged or used in production, is capital. ”

“ Capital is the stored up and accumulated surplus of past labor; capital is the product of labor. The function of capital is to appropriate or confiscate for its own use and benefit the "surplus" labor product of the wage laborer. ”

“ 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. ”

“ It is not less difficult to pronounce how far the effect of any given quantity of money, as capital, or in other words, as a medium for circulating the industry and property of a nation, may be increased by the very circumstance of the additional motion which is given to it by new objects of employment. ”

“ When, for instance, it is said that wages are drawn from capital, the word capital is understood in the same sense as when we speak of the scarcity or abundance, the increase or decrease, the destruction or increment, of capital—a commonly understood and definite sense which separates capital from the other factors of production, land and labor, and also separates it from like things used merely for gratification. ”

“ I do not mean to deny that the capital, or part of it, may be so employed as not to support laborers, being fixed in machinery, buildings, improvement of land, and the like. In any large increase of capital a considerable portion will generally be thus employed, and will only co-operate with laborers, not maintain them. ”

“ Ability, using wage-capital as its implement of direction, gives rise to fixed capital, in the form of the elaborate implements of modern production, which are the material embodiments of the knowledge, ingenuity, and energy of the highest minds. ”

“ In all these cases money represents CAPITAL—capital being the machinery or tools and other equipment with which wealth is produced.
Capital is brought into existence in only one way—that is, by consuming less than is produced. ”

“ The capital which has paid for these costly places of business and elegant residences, and is invested in these gigantic enterprises, has been created out of the immense material wealth of the State—not borrowed on a factitious credit. Its merchants do not make princely fortunes in a day, but what they acquire they keep. ”

“ Are we maintaining a reason- able equation in our balance of payments? Does a reason- able percentage of the national income go to the formation of capital and is that capital being invested in productive enterprises? ”

“ In short, whatever the form of established capital may be we take all we can get hold of, probably more than three-fourths of it.—There remains the portion which is not fixed capital, that which disappears in use, namely, all that is consumed, all the fruits of the soil, every description of provision, all the products of human art and labor which contribute the maintenance of existence. ”

“ If the capital of the country is very great, a profit of only five per cent upon it may be much more ample, may support a much larger number of capitalists and their families in much greater affluence, than a profit of twenty-five per cent on the comparatively small capital of a poor country. ”

“ Of course; but still capital was far a-head, though the population is gaining upon it every year. When the people first went, they found nothing but capital—all means of production and no consumers but themselves. ”

“ They call capital the one portion of the proceeds of labor which is not consumed, but accumulated for further production, and they omit to mention that it is the one portion of the proceeds of labor which is withheld from the laborer, of which he is robbed under the permission of law; in short, that capital is the accumulated stealings and pickings from the property of other men. ”

“ 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. ”

“ When capital is employed in exchanging one description of the produce of national industry for another, it then supports as great a portion of industry as can be done by any capital employed in commerce. ”

“ We have seen that capital does not advance wages or subsist labourers, but that its functions are to assist labour in production with tools, seed, etc., and with the wealth required to carry on exchanges. ”

“ And, as has been previously shown, food, clothing, etc.—in short, all articles of wealth—are only capital so long as they remain in the possession of those who propose, not to consume, but to exchange them for other commodities or for productive services, and cease to be capital when they pass into the possession of those who will consume them ”

“ Such undiscriminating uses of the term Capital are doubtless defensible enough in business accountings; for in private business anything may be thought of as business “capital” if it can be summarized in terms of Money. But for Economics as a comprehensive social science, the dumping into the same basic category of such radically different things as Labor, Land57 and Wealth—Man, Natural Resources and Artificial Objects—is indefensible and miraculously confusing. ”

“ 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. ”

“ That capital may limit the form of industry is clear. Without the factory, there could be no factory operatives; without the sewing machine, no machine sewing; without the plough, no ploughman; and without a great capital engaged in exchange, industry could not take the many special forms that are concerned with exchanges. ”

“ Only too well. You said, but at great length, and with much embroidery of language more than questionable, that capital had no bowels for the worker, nor owners of capital either; and that since no one else would be kind to them, the workers must be kind to themselves and take the matter into their own hands.
J. N. (making notes) . Owners of the capital; workman must take the matter—take the matter—into their own hands.
J. F. Well, I have no more questions to ask your Grace. ”

“ In order to show the reader that capital is an actual producer, in as true a sense as labour is, or the ability by which labour is directed, let us begin by considering fixed capital as distinct from wage capital, and by considering it in its simplest forms. By fixed capital is meant any tools, machines, or materials by which man’s efficiency as a producer of wealth is increased ”

“ Here is a blacksmith at his forge making picks. Clearly he is making capital—adding picks to his employer’s capital before he draws money from it in wages. Here is a machinist or boilermaker working on the keel-plates of a Great Eastern. Is not he also just as clearly creating value—making capital? ”

“ Surely, it will be said that in such cases, even if in no others, wages do actually come from capital; are actually advanced by capital; and must necessarily lessen capital in their payment? Surely here, at least, industry is limited by capital, for without capital such works could not be carried on? ”

“ Capital distinguished from wealth.—Whenever material wealth is used not directly in meeting present wants, but to produce more wealth suited to future wants, it is called capital. Any store of good things devoted only to meeting wants as they come is thought of as wealth, as well as possible capital, since at any time it may be made the means of creating other wealth to more than take its place. ”

“ Therefore in the accumulation of wealth, so far as it arises from the saving by anyone of the products of his labour, from his bequest of this capital to another who farther adds to it by saving some of the profit which the capital yields, as employed in the payment for labour or in trade either by the capitalist himself or someone to whom he lends it, and from the continuation of this process through generations, there is nothing which tends to lessen for anyone else the possibilities of ownership. ”

“ They came to understand that property is a [114] physical actuality, the result of some form of labor; that capital is that portion of the results of production which can be reserved and made available for new and further production; that money is an instrumentality for facilitating the distribution and use of capital and the interchange of products and services; that production alone buys production ”

“ To familiarize ourselves with the conception, let us consider what is done with the capital invested in any of the branches of business which compose the productive industry of a country. A manufacturer, for example, has one part of his capital in the form of buildings, fitted and destined for carrying on his branch of manufacture. ”

“ This definition appears to us peculiarly liable to misapprehension; and much vagueness and some narrow views have, we conceive, occasionally resulted from its being interpreted with too mechanical an adherence to the literal meaning of the words.
The capital, whether of an individual or of a nation, consists, we apprehend, of all matters possessing exchangeable value, which the individual or the nation has in his or in its possession for the purpose of reproduction, and not for the purpose of the owner's unproductive enjoyment. ”

“ Taking the situation by and large, looking to the body of business enterprise as a whole, the advantageous bargaining from which gains accrue and from which, therefore, accumulations of capital are derived, is necessarily, in the last analysis, a bargaining between those who own (or control) industrial wealth and those whose work turns this wealth to account in productive industry. ”

“ The entire class of manufacturers, the holders of stocks, with their hundreds of millions of capital, are held to the government by the strong link of pecuniary interests; millions of people—entire sections of country, interested, or believing themselves to be so, in the public lands, and the public treasure—are bound to the government by the expectation of pecuniary favors. ”

“ Now as before the variable capital, as a fixed amount of money, will put in motion an appropriate quantity of living labour, that is to say it serves to employ the appropriate quantity of constant capital in production and to produce the corresponding amount of surplus value. ”

“ Production on a large scale is greatly promoted by the practice of forming a large capital by the combination of many small contributions; or, in other words, by the formation of stock companies. The advantages of the principle are important, [since] (1) many undertakings require an amount of capital beyond the means of the richest individual or private partnership. ”

“ And capital, either invested or employed, is the support of the great middle class, and of the various professions, dependent mainly on it, whether they be recruited from above, or from below: capital is its support, just as the rent of land is that of the upper class, and wages that of the lower or working class. ”

“ Finance-capital, concentrated in a few hands and exercising a virtual monopoly, exacts enormous and ever-increasing profits from the floating of companies, issue of stock, State loans, etc., tightening up the grip of financial oligarchies and levying a tribute on the whole of society. ”