Both use their capital by dispensing it in the form of daily rations to two hundred other men, on condition that these men do something; but the first feeds the other men, not on condition that they dance for him, or do anything that ministers to his own immediate pleasure, but on condition that they construct a machine which will enable, as soon as it is finished, a given amount of human effort to double the amount of food which such effort would have produced otherwise. Thus, by the end of two years—the time which we suppose to be required for the machine's completion—though the original food-supply of the capitalist will all have been taken up and disappeared, its place will have been taken by a machine which will enable forever afterwards one-half of the two hundred men to produce food for the whole. A hundred men, therefore, are left for whom food can be permanently provided, without any effort to produce it being made by these men themselves; and since of this annual surplus a part—let us call it half—will be taken as interest on the machine by the man with whose capital it was constructed, he will now have the means of making fifty men dance for his pleasure in perpetuity; for as often as they have eaten up one supply of food, this, through the agency of the machine, will have been replaced by another.
Our second capitalist, meanwhile, who deals with his capital as income, starts with setting the dancers to dance for his behoof at once; and he keeps the whole two hundred dancing and doing nothing else, so long as he has food with which to feed them. This life is charming so long as it lasts, but in two years' time it abruptly comes to an end. The capitalist's cupboard is bare. He has no means of refilling it. The dancers will dance no more for him, for he cannot keep them alive; and the efforts for two years of two hundred men, as directed by a man who treats his capital as income, will now have resulted in nothing but the destruction of that capital itself, and a memory of muscular movements which, so far as the future is concerned, might just as well have been those of monkeys before the deluge.
Now, if we take the careers of our two capitalists as standing for the careers of two individuals only, and estimate them only as related to these men themselves, we might content ourselves with indorsing the judgment which conventional critics would pass on them, and say of the one that he had acted as his own best friend, and dismiss the other as nobody's enemy but his own. But we are, in our present inquiry, only concerned with individuals as illustrating kinds of conduct which are, or which might be, general; and the effects of their conduct, which we here desire to estimate, are its effects of it, not on themselves, but on society taken as a whole. If we look at the matter in this comprehensive way, we shall find that the facile judgments to which we have just alluded leave the deeper elements of our problem altogether untouched.
The difference between the ultimate results of the two ways of treating capital will, to the conventional critic, seem to have been sufficiently explained, by saying that the energy stored up in a given accumulation of food reappears when employed in one way, in the efficiency of a permanent machine; and is, when employed in the other, so far as human purposes are concerned, as completely lost as it would have been had it never existed. But if we reconsider a fact which was dwelt upon in our last chapter, we shall see that the difference is really much greater than this.
When the potential energy residing in so much food has been converted into the energy of so much human labour, and when this is so directed that a productive machine results from it, there is in the machine, as Dr. Crozier puts it, an indefinitely larger amount of "pure economic power," than that which has been expended in the work of the labourers' muscles. While the energy of the labourers has merely resulted in a bottle, or a cage, we may say, of sufficient strength, the genius of the man who directed them has captured and imprisoned an elemental slave in it, who, so long as the cage confines him, will supplement the efforts of human muscle with his own. But when the energy latent in food is converted into such efforts as dancing, the result produced is the equivalent of the human effort only. Thus in the modern world of scientific enterprise and invention, to invest capital in machinery and then live on the interest from it, means to press into the service of mankind an indefinite number of non-human auxiliaries, and year by year to live on a part of the products which these deathless captives are never tired of producing.
To spend capital as income on securing immediate pleasures means either to forgo the chance of adding any new auxiliaries to those that we possess already, or else to let those who are at our service already, one after one, escape us—or, in other words, to make the productive force now at the disposal of any prosperous modern country decline towards that zero of efficiency from which industrial progress starts, and which marks off helpless savagery from the first beginnings of civilisation.
It is no doubt inconceivable, in the case of any modern nation, that a climax of the kind just indicated could never reach its completion. If all the capitalists, for example, of Great Britain or America, were suddenly determined to live on their capital itself, they could do so only by continuing for a considerable time to employ a great deal of it precisely as it is employed at present. Indeed, so long as they continued to demand the luxuries which machines produce, it might seem that it was hardly possible for them to get rid of their capital at all. But what would really happen may be briefly explained thus:—
If we take the case of any modern country, the amount of its income at any given time depends for its sustentation on machines already in existence; and its increase is dependent on the gradual supersession of these by new ones yet more efficient. But the efficiency of the former would soon begin to decrease, and would ultimately disappear altogether, unless they were constantly repaired and their lost substance was renewed; while the latter would never exist unless there were men to make them. Hence, under modern conditions, in any prosperous and progressive country, a large portion of what is called the manufacturing class is always engaged, not in producing articles of consumption, comfort, or luxury, but in repairing and renewing the machines by which such articles are at present multiplied, or else in constructing new machines which shall supplement or replace the old. Thus, in Great Britain, towards the close of the nineteenth century, these makers and repairers of machinery were, with the exception of coal-miners, the industrial body whose proportional increase was greatest. In the modern world the spending of capital as income is a process which, in proportion as it became general, would accomplish itself by affecting the position of men like these. It would consist of a withdrawal of men who are at present occupied in maintaining existing machines, or else in constructing new ones from their anvils, hammers, files, lathes, and furnaces, and making them dance instead. This withdrawal would, in proportion as it became general, render the construction of new machines impossible, and would leave the efficiency of those now in use to exhaust itself.
That such is the case is illustrated on a small scale by the conduct of individuals who live on their capital now. If a farmer, whose capital consists largely of an agricultural plant, desires to spend more than his proceeds of his farm are worth, he virtually takes the men who have been mending his barns and reapers, and sets them to build a buggy which will take him to the neighbouring races. The varnish on the buggy is bought with the rust on the reaper's blades; the smart, weather-proof apron with the barn's unmended roof. If the managing body of a railroad pays a higher dividend to the shareholders than can be got out of its net earnings, the results are presently seen in cars that are growing dirty, in engines that break down, in rotten sleepers, and in trains that run off the track. The men who were once fed out of a certain portion of the traffic receipts to keep these things in repair, are now fed to dance for the shareholders, thus supplying them with spurious dividends. A farm or a railroad which was managed on these principles would ultimately cease to produce or to do anything for anybody; and if all modern capital were managed in a similar way, all the multiplied luxuries distinctive of modern civilisation would, one by one, disappear like crops which were left to rot for lack of machines to reap them with, and train services which had ceased because the engines were all burned out.
That such a climax should ever, in any modern country, complete itself cannot, let me say once more, be apprehended as a practical possibility; but it is practically impossible only because the earlier stages of the approach to it would lead to a situation that was intolerable long before it ceased to be irreparable. And here we reach the point to which the foregoing examination has been leading us. It is precisely this course of conduct, the end of which would be general ruin, that any attack on interest, by means of special taxation or otherwise, would, so long as it lasted, stimulate and render inevitable. Let me point out—though it ought in a general way to be self-evident—precisely how this is.