The only alternatives, then, which we have before us are as follows:—If the great wealth-producer is a man of such coarse fibre that none of those desires just mentioned are really his—neither the desire of power, nor the desire of social honour, nor the desire for that larger development of taste and moral activities which is rendered possible by the possession of exceptional wealth—then it is obvious that the sole motive left to him will be the gross or unreasoning desire for the possession of wealth as such; and we are brought back to the original {308} proposition which the socialists set themselves to annihilate. But if, on the other hand, the great wealth-producer is really capable of those higher desires which the socialists assure us will shortly become so strong in him, the desire of exceptional wealth, instead of being superseded by these, will be stronger beyond calculation than it ever could be without them.
And it is, as a rule, the latter of these two suppositions which practically represents the truth. Exceptional wealth is desired by the men who produce it not for itself, but for its results; and in proportion as the man who desires it possesses a lofty character, his desire for it, being merged in the thought of the uses to which he desires to put it, will itself become equally lofty also. But none the less will the desire of the material wealth form the physical basis in which his loftier desires inhere, just as the impulse of sex remains the physical basis of the deepest and tenderest love which a man feels for a woman, or as the brain is the physical basis of every thought that a man can think. Thus the arguments of the socialists recoil upon their own heads; and instead of tending to show that the desire of possessing exceptional wealth will ever cease to be indispensable as a motive to exceptional production of it, they have merely succeeded in calling attention to the facts on which the indispensable character of this motive depends.
We have not, however, finished with this question yet. There is a further set of objections still {309} remaining to be considered which, whilst based on an admission that wealth-production is motived by the desire of wealth, aims at showing that this fact does not necessarily result in more than a fraction of the consequences which have up to this time flowed from it, but merely shows in reality that those consequences are unalterable, and adds new force to the arguments that have just been urged with regard to them.
The objections referred to are those embodied in the well-known contention that though the possession of exceptional wealth must be allowed to the exceptional men who are actually engaged in producing it, and the exercise of whose business ability is just as essential to the country’s prosperity as to their own, yet this possession of wealth should be limited to themselves personally, and should not be allowed to distribute itself amongst their idle and inefficient families. In other words, it is urged that whilst the founders and conductors of businesses are entitled to the incomes, no matter how large, that are due to the exercise of their own powers, these incomes should cease with the cessation of the powers that caused them, and should not be allowed to perpetuate themselves, as they do now, in the shape of interest paid to the passive owners of capital. Such an arrangement, it is maintained by those who advocate it, would at once coincide with the dictates of abstract justice, and whilst securing to the exceptional wealth-producer, whose services society requires, the full reward and motive necessary to ensure his activity, would enrich the community at {310} large by distributing amongst it an enormous income, which at present, instead of stimulating anybody to any useful exertion, merely keeps a number of men in idleness. And this contention at first sight does not lack plausibility either in respect of the question of abstract justice which it raises, or of the practical consequences which, according to it, the arrangement in question would produce. When we examine it closely, however, the plausibility vanishes, and abstract justice and practical reason alike condemn the appeals thus made to them as founded entirely on misconception.
Let us deal with the question of abstract justice first. Those who denounce interest or unearned income as unjust, invariably state their case in the following simple form. There are only two ways, they say, in which a man can become possessed of wealth—either by producing such and such an amount himself, or by appropriating such and such an amount that has been produced by another person; or, as they frequently put it, with an air of solemn sententiousness, “A man can get an income only by working or by stealing: there is no third way!” Now one conclusive answer to this puerile, though popular, sophism has, strangely enough, been given by Mr. Henry George, who, though eager to adopt any argument that could be used to assail the rich, was, nevertheless, not taken in by this. Mr. George pointed out that one kind of wealth, at all events,—and we may add that in this we have wealth in its oldest form—consists of {311} possessions which have been neither made by the possessors nor yet stolen by them. That is to say, it consists of flocks and herds. Mr. George pointed out also that whole classes of possessions besides are, for by far the larger part of their value, equally independent of either work or theft. Such possessions are wines, whose quality improves with time, and whose value, consequently, whether in exchange or use, is increased from year to year by the secret operations of nature. But Mr. George, though his arguments were true so far as they went, did little more than touch the hem of the question; for flocks and herds, and commodities that grow valuable as they mature themselves, form but a small, though they do form a typical, portion of wealth that may come to a man without his having produced it himself, and without his stealing it from any other human producer. And this is the wealth which is actually produced by capital.
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; and we will take as examples of these the three following things—a dart or missile by which game may be killed; a heap of manure by which a peasant’s field may be fertilised; and a horse which a peasant uses for ploughing and {312} kindred purposes. Now let us imagine a race of savages who use no missiles at all, but catch their game merely by sleight of hand. If a man is entitled to such game as he catches, the exceptionally dexterous hunter who catches most will be necessarily the rightful possessor of more game than his fellows. This will be granted by those who admit that work constitutes a true, and the only true title to possession.
Such being the case, then, let us alter our supposition somewhat, and suppose that the hunters, instead of catching the game with their hands, kill it with wooden darts; and that the amount of game which each hunter will secure in a day depends not on the skill with which the darts are thrown, but on the skill with which the darts are made. Under these circumstances, the hunter who secures most will not be the man who is quickest in seizing the quarry with his hands, but the man who makes the darts that will reach their mark most certainly; and yet no one would say that he was less entitled to what he took, because his exceptional skill, before it could become effectual, was obliged to become embodied in some object external to himself.
In the same way, if two peasants are cultivating similar fields, and one, by sheer hard work, raises a larger crop than the other, his right to his larger crop would not be denied by anybody. Let us suppose, then, that instead of working harder than his neighbour he works more intelligently, that he saves and stores up as manure materials which his {313} neighbour wastes; and that every year, through the powers accumulated in his manure heap, he can raise a larger crop than his neighbour, though he actually works less. Would any one affirm that the man lost his right to his extra produce because he produced it indirectly by the external agency of his manure, and not directly by overstraining his muscles? Or again, if one of the peasants raised a larger crop than his neighbour because, whilst his neighbour spent all his money in drinking, he himself saved it and bought a horse, would any one maintain that the extra crop due to the work which the horse performed for its owner did not belong to the owner, but was stolen by him from the other man?
No one would put forward an argument so absurd as this. And yet the wooden darts of the savage and the manure heap and the horse of the peasant are neither more nor less than portions of fixed capital, just as a steam engine is, or a cotton mill with all its plant. Fixed capital is merely productive ability which, instead of acting directly in the production of goods for the consumer, stores itself up in externalised means of production, so that it may, with accumulated force, produce such goods indirectly; and the additional wealth which a man produces by a new machine is just as much produced by himself as is the additional crop which he raises from a patch of land by the employment of a horse which he has bought, or manure which he has himself concocted. Indeed, fixed capital may be compared to a breed of artificial horses, or if we like the simile better, to {314} a race of iron slaves. The amount of wealth which the employment of a machine adds to the amount that would be produced without it by a given number of labourers, is produced by the machine itself just as truly as it would be if the machine, instead of a structure of wheels and framework, took the form of a gang of artificial negroes, who only betrayed the fact that they were not human by the heat of their breath, an occasional unearthly whistle, and the different language in which they required to have their orders given them. The machine produces this increment, but certain men produced the machine; and therefore the increment is in reality produced by the men, just as truly as when a murdered man has been killed by a bullet from a rifle, his death has been caused by the murderer who aimed and discharged the weapon.
And what is true of fixed capital is true of wage capital also; for fixed capital, such as machines, buildings, or railways, is the result of wage capital, as employed to direct labour, and is therefore wage-capital externalised in the objective results of its employment. But fixed capital, or a man’s productive power externalised, differs from his productive power when exercised by himself through wage capital. It is a part of his power which he can separate from his own personality, and which he can make over to others, just as a slave-owner might make over a body of slaves; only these are slaves whose enslavement does them no wrong, and who belong {315} by right to the men whose enterprise and whose intellect created them.