◆¹ People constantly speak of Capital as being a sensitive thing—a movable thing—a thing that is easily driven away—that can be transferred from one place to another by a mere stroke of the pen. We all of us know the phrases. But though they express a truth, it is partial truth only. Capital before it is employed, when it is lying, let us say, in a bank, to the credit of a Company that has not yet begun operations—Capital, under such circumstances, is no doubt altogether movable; for before it is employed it exists as credit only. ◆² But the moment it is employed in manufacture, a very considerable part of it is converted into things that are very far from movable—into such things as buildings and heavy machinery; and only a part remains movable—namely that reserved for wages. For example, M’Culloch estimates that the average cost of a factory is about one hundred pounds for every operative to be employed in it; whilst the yearly wages of each adult male would now on the average, be about sixty pounds. Thus, if a factory is started which will employ one thousand men, and if the wages of all of them have to be paid out of Capital for a year, the amount reserved for wages will be sixty thousand pounds, whilst a hundred thousand pounds will have been converted into plant and buildings. Most people are familiar with the names given by economists to distinguish the two forms into which employed capital divides itself. The part which is reserved for, and paid in wages, is called “Circulating Capital”; that which is embodied in buildings and machinery is called “Fixed Capital.” Of Circulating Capital—or, as we may call it, Wage Capital—we will speak presently. ◆³ We will speak at first of Fixed Capital only; and of this we will take the most essential part, namely machinery; and for convenience sake we will omit the accidental part, namely buildings, which render merely the passive service of shelter.
◆1 We shall see that machinery adds to the product of Labour in the same way that a superior soil adds to it;
Now in any operation of manufacturing raw material, or—what means the same thing—conveying raw material, say water or coal or fish, to the places where they are to be consumed, certain machines or appliances are necessary to enable the operation to take place well. Thus fish or coal could hardly be carried without a basket, whilst water could certainly not be carried without some vessel, nor in many places raised from its source without a rope and pail. For all purposes therefore of practical argument and calculation, appliances of these most simple and indispensable kinds are merged in Human Exertion, just as is the case with the poorest kind of Land, and are not credited separately with any portion of the result. We do not say the man raised so much water, and the rope and the pail so much. We say the man raised the whole. ◆¹ But the moment we have to deal with appliances of an improved kind, by which the result is increased, whilst the labour remains the same, the case of the appliances becomes analogous to that of superior soils; and a portion of the result can be assigned to them, distinct from the result of Labour.
◆1 As a certain simple instance will show.
◆¹ Let us suppose, for instance, that a village gets all its water from a cistern, to keep which replenished takes the labour of ten men constantly raising the water by means of pails and ropes, and then carrying it to the cistern, up a steep wearisome hill. These men, we will say, receive each one pound a week, the village thus paying for its water five hundred pounds a year, the whole of which sum goes in the remuneration of labour. We will suppose, further, that the amount of water thus obtained is a thousand gallons daily, each man raising and carrying a hundred gallons; and that this supply, though sufficient for the necessities of the villagers, is not sufficient for their comfort. They would gladly have twice that amount; but they are not able to pay for it. Such is the situation with which we start. We have a thousand gallons of water supplied daily by the exertion of ten men, or a hundred gallons by the exertion of each of them.
And now let us suppose that the village is suddenly presented with a pumping-engine, having a handle or handles at which five of these men can work simultaneously, and by means of which they, working no harder than formerly, can raise twice the amount of water that was formerly raised by ten men—namely two thousand gallons daily, instead of one thousand. The villagers, therefore, have now a thousand gallons daily which they did not have before; and to what is the supply of this extra quantity due? It is not due to Labour. The Labour involved can produce no more than formerly; indeed it must produce less; for its quality is unchanged, and it is halved in quantity. Obviously, then, the extra thousand gallons are due to the pumping-engine, and this not in a mere theoretical sense, but in the most practical sense possible; for this extra supply appears in the cistern as soon as the engine is present, and would cease to appear if the engine were taken away.
◆1 It may be also observed that the added product will go to the owner of the machine, just as rent goes to the owner of the land.
◆¹ And here let me pause for a moment, as I did when I was discussing land, to point out a fact which at the present stage of argument has no logical place, but which should be realised by the reader, in order to avoid misconception: namely, the fact that the extra water-supply which is due to the pumping-engine, will necessarily be the property of whoever owns the engine, just as rent will be the property of whoever owns the land that yields it. We supposed just now that the owner of the engine was the village. We supposed that the engine was presented to it. Consequently the village owned the whole extra thousand gallons. It had not to pay for them. But let us suppose instead that the engine was the property of some stranger. Just as necessarily in that case the gallons would belong to him; and he could command payment for them, just as if he had carried them to the cistern himself. We supposed that the village was able to pay five hundred pounds for its water; and that it really wanted, for its convenience, twice as much as it could obtain for that sum expended on human labour. The owner of the pumping-engine, by allowing the village to use it, doubles the water-supply, and halves the labour bill. The expenditure on labour sinks from five hundred pounds to two hundred and fifty pounds; and the owner of the pumping-engine can, it is needless to say, command the two hundred and fifty pounds which is saved to the village by its use. In actual life, no doubt, the bargain would be less simple; because in actual life there would be a number of rival pumping-engines, whose owners would reduce, by competition, the price of the extra water; but whatever the price might be, the principle would remain the same. The price or the value of the water would go to the owner of the engine; and it would fail to do so only if one thing happened—if the owner refused to receive it, and, for some reason or other, made the village a free gift of what the village would be perfectly willing to buy. In this truth there is nothing that makes for or against Socialism. The real contention of the Socialist is simply this—not that labour makes what is actually made by machinery; but that labourers ought to own the machinery, and for that reason appropriate what is made by it. A machine or engine, in fact, which is used to assist labour is, in its quality of a producing agent, just as separate from the labour with which it co-operates, as a donkey, in its quality of a carrying agent, is distinct from its master, if the master is walking along carrying one sack of corn, and guiding the donkey who walks carrying seven.
◆1 A machine, then, as a productive agent, is as distinct from human labour as are the efforts of an animal.
◆¹ And this brings us back into the line of our main argument; the comparison just made being a very apt and helpful illustration of it. Every machine may be looked on as a kind of domestic animal, and each new machine as an animal of some new species; which animals co-operate with men in the production of certain products: and the point I am urging on the reader may accordingly be put thus. When a man, or a number of men, without one of these animals to assist them, produce a certain amount of some particular product, and with the assistance of one of these animals produce a much larger amount, the added quantity is produced not by the men, but by the animal—or, to drop back again into the language of fact, by the machine.