◆¹ The difference, then, between Ability and Labour must be now abundantly clear. As a general rule, there is the broad difference on the surface, that the one is mainly mental and the other mainly muscular; but to this rule there are many exceptions, and the difference in question is accidental and superficial. The essential, the fundamental difference from a practical point of view is, that whilst Labour is the exertion of a single man applied to a single task, Ability is the exertion of a single man applied to an indefinite number of tasks, and an indefinite number of individuals.
◆1 It is, of course, understood that this definition applies only to Capital used so as actually to make Labour more productive, not to Capital wasted.
◆¹ And now let us go back to the subject of Capital. I have said that Capital is one kind of Human Exertion guiding and controlling another kind. We can at last express this with more brevity, and say that Capital is Ability guiding and controlling Labour. This is no mere rhetorical or metaphorical statement. It is the accurate expression of what is at once a theoretical truth and an historical fact; and to show the reader that it is so, let me remove certain objections which may very possibly suggest themselves. In the first place, it may be said that Capital belongs constantly to idle and foolish persons, or even indeed to idiots, to all of whom it yields a revenue. This is true; but such an objection altogether ignores the fact that though such persons own the Capital, they do not administer it. An idiot inherits shares in a great commercial house; but the men who manage the business are not idiots. They only pay the idiot a certain sum for allowing his Capital to be made use of by their Ability. It may, however, be said further that many men, neither idle nor idiotic, had administered Capital themselves, and had succeeded merely in wasting it. This again is true; but where Capital is wasted the productive powers of the nation are not increased by it. It is, however, a broad historical fact that, by the application of Capital the productive powers of the nation have been increasing continually for more than a hundred years, and are increasing still; and this is the fact, or the phenomenon, which we are engaged in studying. Capital for us, then, means Capital applied successfully; and when I say that Capital is Ability guiding and controlling Labour, it is of Capital applied successfully, and not of Capital wasted, that I must in every case be understood to be speaking; just as if it were said that a battle was won by British bayonets, the bayonets meant would be those that the combatants used, not those that deserters happened to throw away. The fact, indeed, that in certain hands so much Capital is thrown away and wasted, is nothing but a proof of what I say, that as a productive agent Capital represents, and practically is, Ability.
◆1 Capital is to Ability something like what the brain is to the mind.
It may, however, be said—and the objection is worth noticing—that Capital is a material thing, and Ability a mental thing; and it may be asked how, except metaphorically, the one can be said to be the other? ◆¹ An answer may be given by the analogy of the mind and brain. So long as the mind inhabits and directs a human body, mind and matter are two sides of the same thing. It is only through the brain that mind has power over the muscles; and the brain is powerful only because it is the organ of the mind. Now Ability is to Capital what mind is to the brain; and, like mind and brain, the two terms may be used interchangeably. Capital is that through which the Ability of one set of men acts on the muscles—that is to say, the Labour—of another set, whether by setting Labour to produce machinery, or by so organising various multitudes of labourers that each multitude becomes a single machine in itself, or by settling or devising the uses to which these machines shall be put.
◆1 And this would be as true of Capital in a Socialistic State as in any other.
And it will be well, in case any Socialist should happen to read these pages, to point out that my insisting on this fact is no piece of special pleading on behalf of the private capitalist. ◆¹ The whole of the above argument would apply to Capital, no matter who owned it: individuals, or the community as a whole. For no matter who owned it, or who divided the proceeds of it, the entire control of it would have to be in the hands of Ability. In what, or how many, individuals Ability may be held to reside; how such individuals are best found, tested, and brought forward; and how their power over Capital may be best attained by them—whether as owners, or as borrowers, or as State officials,—is a totally different question, and is in this place beside the point.
At present, it will be enough to sum up what we have seen thus far. The causes of wealth are not, as is commonly said, three: Land, Labour, and Capital. This analysis omits the most important cause altogether, and makes it impossible to explain, or even reason about, the phenomenon of industrial progress. The causes of wealth are four—Land, Labour, Capital, and Ability: the two first being the indispensable elements in the production of any wealth whatsoever; the fourth being the cause of all progress in production; and the third, as it now exists, being the creation of the fourth, and the means through; which it operates. These two last, as we shall see presently, may, except for special purposes, be treated as only one, and will be best included under the one term Ability.
And now let us turn back to the condition of this country at the close of the last century, and the reader will see why, at the outset of the above inquiry, I fixed his attention on that particular period.