There are many other spinners in the same position. They work for Jones, who pays them wages. They spin yarn, and Jones sells it. Does Jones spin any of the yarn? Not a thread: the spinners spin it all. Do the spinners get all the money the yarn is sold for? No. How is the money divided? It is divided in this way—
A quantity of yarn is sold for twenty shillings, but of that twenty shillings the factory owner pays the cost of the raw material, the wages of the spinners, the cost of rent, repairs to machinery, fuel and oil, and the salaries and commissions of clerks, travellers, and managers. What remains of the twenty shillings he takes for himself as profit.
This "profit," then, is the difference between the cost price of the yarn and the sale price. If a certain weight of yarn costs nineteen shillings to produce, and sells for twenty shillings, there is a profit of one shilling. If yarn which cost £9000 to produce is sold for £10,000, the profit is £1000.
This profit the factory owner, Jones the capitalist, claims as interest on his capital. It is then a kind of rent charged by him for the use of his money, his factory, and his machinery.
Now we must be careful here not to confuse the landlord with the farmer, nor the capitalist with the manager. I am, so far, dealing only with those who own and let land or capital, and not with those who manage them.
A capitalist is one who lends capital. A capitalist may use capital, but in so far as he uses capital he is a worker.
So a landlord may farm land, but in so far as he farms land he is a farmer, and therefore a worker.
The man who finds the capital for a factory, and manages the business himself, is a capitalist, for he lends his factory and machines to the men who work for him. But he is also a worker, since he conducts the manufacture and the sale of goods. As a capitalist he claims interest, as a worker he claims salary. And he is as much a worker as a general is a soldier or an admiral a sailor.
Well, the idle landlord and the idle capitalist charge rent or interest for the use of their land or capital.
The landlord justifies himself by saying that the land is his, and that he has a right to charge for it the highest rent he can get.