II.
PRODUCTION, CONTINUED—CAPITAL—COMBINATION AND DIVISION OF LABOR.
5. We have already seen that an essential to any considerable production is capital. We have seen the nature of capital and how it comes to exist. We have also learned that though capital implies saving, mere saving is not the sole condition of capital; indeed, a narrow penuriousness prevents the rapid accumulation of capital. The man who is accustomed to bring his water from a spring a quarter of a mile from his house instead of digging a well at the cost of a few dollars, or a few days’ work, acts uneconomically. In the long run the bringing of the water from the spring costs him much more than the digging of the well. The man who has extensive grain-fields, and who, for the sake of saving the expense of a reaper, or even a cradle, continues to use the sickle, will find that his saving results in a loss instead of a gain.
A man does not need to be rich in order to be a capitalist. When the savage has invented a bow and arrows he has the rudiments of capital. The laborer who has reserved out of his earnings enough to buy him a set of tools, or a few acres of land, is as really a capitalist as the owner of factories or railroads. Whatever property is used for production is capital.
Capital exists in many forms. It has been generally divided into fixed and circulating, though the limits of these divisions are not very precisely defined. The main difference consists in this, that while certain kinds of capital are used only once in the fulfillment of their purposes, other kinds are used repeatedly. Fuel can be burned but once. An axe may serve for years. Circulating capital is of two kinds:
(1) There are the stock and commodities which are to be consumed in reproduction; (a) the material out of which the new product is to be made, as lumber for cabinet ware, leather for shoes, etc.; (b) food and other provisions for the sustenance of the laborers.
(2) There is the stock of completed commodities on hand and ready for the market. The chairs that are finished and ready for sale in the chair factory are of this character. It is to be observed that the same article may be at one time circulating and at another fixed capital. Thus the chairs just spoken of, while they are in the hands of the manufacturer, or passing through those of the dealers, are circulating capital. It is only when they become fixed in use that their character changes.
Fixed capital consists (1) of all tools, implements, and machinery, used in the trades. Here, too, belong all structures of every sort for productive purposes; (2) all beasts of burden and draft; (3) all improvements of land implied in clearing, fencing, draining, fertilizing, terracing, etc.; (4) all mental acquisitions gained by labor and which give man power for productive results.
Obviously capital, by whomsoever owned, is an advantage to the laborer. But such capital is useless to the owner unless he can unite it with labor. So, too, the ability to labor is of no benefit to the laborer unless he can employ it in connection with capital. Generally the more capital there is in a community, other things being equal, the better it is for the laborer; and the more laborers there are, other things being equal, the better it is for the capitalist. When a factory burns down it may destroy only a small part of the wealth of the owners, and they may not palpably suffer; but it is very likely to deprive the laborers, who are connected with it, of the means of securing their daily sustenance.
There is no natural antagonism of interests between capital and labor, but rather the utmost concord and interdependence. Whatever conflicts arise between the laborers and the capitalists come from the unnatural selfishness and jealousy of the parties concerned.