It is a medium of exchange. It saves, in trade, the actual and troublesome handling of merchandise. Money as such, therefore, is not capital, and no headway can be made in the study of the principles of economy till we are able to forget that there is such a thing as money. Capital is a tool it is a hoe, a machine, a building, wool or leather, or any article used or transmuted by labor in producing other articles of value. : Now, it is evident that such tool and raw material used by the laborer are not a source of value. All the tools in the world could not produce a pin or a potato. A machine can produce nothing at all. If machinery is a source of value, if it can produce anything, let it do so, and let the laborer have a rest. Thus we have only to imagine capital trying to produce the slightest value to see the absurdity of the dictum, that capital is a factor, a doer in the production of value. Labor, on the other hand, without the aid of capital, can produce value. Mr. Rae, in criticising Marx's theory of value, is led to say that "labor by itself is as unproductive as capital by itself." This is a remarkable assertion. "Capital by itself" is dead and utterly unproductive; whereas "labor by itself" is alive and productive. Were it otherwise, capital, not even in the most primitive forms, could have come into existence. "Labor by itself is as unproductive as capital by itself!" How strange and weird the effect of capitalism on the minds of its votaries! The falsism is continually echoed from the mammon-addled brains of capitalistic writers. A learned divine says in the "Bibliotheca Sacra," "Perhaps the sole producer is capital employing machinery plus material plus labor." Here capital employs labor; the creature the creator! He has said before that capital is "ten shillings," or a 'pair of shoes." The shoes therefore employ the owner: he does not use the shoes; the shoes use him! I do not employ my horse and hoe (capital), but they employ 66 1 "Contemporary Socialism," p. 149. me! The man exists for the machine, and not the machine for the man. This is capitalism. It is also brutalism, and, when indorsed by Christian ministers, leads us to exclaim, "O Judgment ! thou art fled to brutish beasts, And men have lost their reason." Capital is used by labor in production, and is transferred to the products. Raw material, wear and tear of machinery and buildings, and all other expenditures or depreciations of capital employed in business, are always, consciously or unconsciously, reduced to labor, transferred to the product, and help determine its value. 4. To say that capital is used in producing value is a truism. To say that it is a source, that it is the origin, spring, or beginning of value, is manifestly false. Labor alone is the source. Labor makes use of capital: it makes use also of air and water, sight and hearing, and other senses as helps, but not as co-ordinate helpers, in the creation of value. 5. Capital is value. No one will dispute this. To say, therefore, that capital is a source of value is equivalent to saying that value is a source of value. 6. All capital is produced by labor as the source. Mr. Mill says, "Capital is itself a product of labor." This again is self-evident. If capital is produced by labor, then labor is the creator, and capital the creature. The creator, not the creature, is the source. Capital is used by its creator, labor, as a means; it may be called a secondary cause, just as gravitation is a secondary cause, God being the first cause. Second causes, however, must be subject to first causes. If gravitation should lift up its head and deny its Lord, or assume to be king, what would happen? Anarchy and destruction. So when capital denies labor as its creator and lord, there is confusion, chaos, and war. Let capital take its place at the feet of labor, and all would be well. It is because capital says to labor, "I am greater than thou," because capital lords it over labor, that hatred and strife are engendered. If my hoe or my horse (capital) should set up over me, if my hoe should acquire the faculty of appropriating to itself every second row of corn, and my horse of appropriating one-half of all the produce he drew, I would cremate that hoe and horse before the sun went down, and advocate any lawful measure looking to a general reform of hoes and horses of this character. 7. Not only is this first Postulate of Socialism, that Labor is the Source of all Value, the first elementary principle of political economy, as laid down by its ablest writers, and a self-evident truth, but it was never denied till it became necessary for capitalism to find an excuse for the exploitation of labor. The doctrine in its simplicity was stated by Smith and Ricardo, when no prejudices existed to warp their judgments, and was everywhere accepted as truth, till, in the evolution of the capitalistic system of industry, capital, in in the shape of land and other means of production, was monopolized by the few to the great wrong and misery of wage-workers, and Socialism raised the cry of distress and reform, planting itself squarely on the accepted teachings of the current economy. Then Bastiat, the champion of capitalism and the avowed enemy of Socialism, rose up and declared that capital should be let alone, competition should be absolutely free, there should be a free fight in an open industrial field, the big man should be pitted against the little man, and the strong, wise, and cunning against the weak, ignorant, and innocent. This he claimed would produce harmony. Social "interests, left to themselves, tend to harmonious combinations.” "Harmonious!" About as harmonious as the dulcet tones of bulls and bears. Society has listened to the music till it is distracted. Socialists do not complain of capital as such, much less do they blame capitalists who, in the industrial struggle, are no more to blame for coming out at the top than wageworkers for coming out at the bottom. It is the fight, the unequal and cruel war made necessary by the present system, the principles of which are capital, competition, and contract, free and individual, that Socialism opposes. These principles, owing largely to the modern complex organization of industry, have become vicious in their operation by enriching the few and oppressing the many. Socialism, believing that these things must inevitably go from bad to worse under the régime of private capital, would have capital socialized, so far at least as is necessary to counteract the evils inherent in capitalism. If now it be asked should not private capital employed in production share in the distribution? We answer, under capitalism, where industry is a great grab game, and every man must grab or die, yes. How much should capital receive? All it can get. Should it secure the laborer at the lowest possible wages, even though he suffer? Yes. Should it pay the farmer six and one-half cents per pound for cotton which cost him seven to raise, even though it ruined the farmer by the operation? Yes. Why should capital do all these and a hundred other wicked things? Because it must under capitalism, or run the risk of ruin itself. We frankly admit that private capital must do what it does do, what all justify it in doing under the present disgraceful, root-hog-or-die system of industry. It is because we deplore these evils necessary to private capital that we would abolish it. We have seen that Labor is the Source of all Value, and that capital itself is produced by labor, being in a sense only labor stored up, or congealed labor, or, as Marx says, a form of "crystallized labor." Professor William S. Sumner, an opponent of Socialism, says "Capital is force, human energy stored or accumulated." The question naturally arises, how shall we estimate this value? 1 If labor is the source of value, it must form the basis of the measure of value; that is, a commodity is worth the labor of making it. What are we to include in this labor? Let us have a clear idea of this term. There are many kinds and qualities of labor. Labor is manual, mental, and moral; and these again admit of various kinds and degrees. How, then, can we estimate this labor, which assumes the form of a commodity and measures its value? In the first place, consider that labor is a social factor; it is not, in 1 "Social Classes," etc., p. 162. society, an individual but a collective thing. Exchange values with which we have to do show that, for the most part, we eat the fruit of others' labor and others eat the fruit of our labor. It follows, that the labor that measures value is not concrete but abstract labor; that is, it is not the labor of one man in the production of a commodity that measures its value, but the average amount of labor required to produce it. In other words, it is the socially necessary labor that is the measure of value. If the special labor of an individual measured value, we should have as many prices or values for a given commodity as there are workmen producing it, since no two would put exactly equal quantities of labor into it. It is not therefore individual but social labor that determines value. Neither may the social labor be subject to the limitations of particular commodities, but it must be general and coextensive with the entire field of exchange. It is therefore average social labor that determines value. This social labor is abstract as distinguished from concrete labor. Individual labor, then, does not determine value. A farmer expects to receive for his potatoes, not what they cost him under his particular conditions of cultivation, but what all others receive; that is, what farmers generally are getting; he finds that his individual, concrete labor does not measure the value of his potatoes, but the average social labor of all farmers who raise potatoes. This is abstract or social labor. Now, as intimated, there are many kinds and degrees of social labor, and so complex and highly organized is modern industry that all kinds of labor are expressed in any given commodity. A potato or a yard of cloth is the embodiment of many kinds of manual, mental, and moral labor. Behind a yard of cloth is a college, a scientific school, a church, a government, civil laws, machine shops, railroads, farms, mines, and mills. This yard of cloth has come directly or indirectly into contact with all these factors, and the labor of each, in some however remote degree, has entered into it. It is perfectly clear, therefore, that the labor which measures its value is not individual but social labor, not J |