[201-2] Related to this peculiarity of the middle ages is the fact that the canon law looked with disfavor on the personal separation of the three factors of production. So also in the prohibition of the Weddeschat referred to § 161, instead of rent-purchase (Rentekauf), also by extending the idea of partnership to a number of transactions which are only forms of loan. (Endemann in Hildebrand's Jahrb., 1863, 176 ff.) Antiquity also, with the independence of its οἶκος,[TN 28] with its slavery, etc., had not developed the difference between the three branches of industry to any extent. Rodbertus, in Hildebrand's Jahrbb., 1865, I, 343.
[201-3] If older writers, like Steuart, etc., speak so little of capital, labor and rent, and so much of city and country, it is not on account of ignorance simply. The contrast between the latter was then much more important than to-day, and that between the former much less developed. When, indeed, Colton, Public Economy of the United States, 1848, 155 ff., claims that because in America the three branches of income do not exist in so separated a condition as in Europe, therefore European Political Economy and its theories are not applicable to America, he forgets that science should not be simply a description or impression made of the reality, but an analysis of it.
[201-4] It is a very characteristic fact that, in our days, when workmen are spoken of, it is generally day laborers and tradesmen that are understood. In Prussia, in 1804, 17.8 per cent. of the population earned their living by letting out their labor; in 1846, 22.8 per cent. as day-laborers, servants, journeymen, tradesmen and factory hands. (Dieterici.)
[201-5] Ricardo, Principles, ch. 4, recognizes the bright side as well as Sismondi, N. P., I, 268, or Buret, De la Misère des Classes laborieuses en Angleterre et en France, 1841, its dark side. Sismondi thinks that land and the capital employed in its cultivation are found to the greatest disadvantage in the hands of the same person. The existence of a thrifty peasant class (also of a class of tradesmen) is one of the best means to prevent the too wide separation of the three branches of income.
HARMONY OF THE THREE BRANCHES OF INCOME.—NECESSITY OF THE FEELING OF A COMMON INTEREST.
Every class corresponding to a branch of the national income must live with the consciousness that its interests coincide with the economic interests of the whole nation. Whenever the entire national income increases, each branch of it may increase without any injury to the others, and, as a rule, does really increase.[202-1] But it is possible that the land owning class may be specially dependent on the prosperity of the whole people. How easy it is for workmen to emigrate; and how much easier yet for capital! England, to-day, can scarcely carry on a great war, in which it would not, at least at the beginning, have to fight English capital.[202-2] Where the treasure is, the heart is also! The land alone is immovable. It alone cannot be withdrawn from the pressure of taxation or from the distress of war. It alone cannot flee into foreign parts.[202-3] [202-4] At the same time, it cannot be denied that the possibility of being able to carry one's fortune out of a country in one's pocketbook and to be able to procure there with one's money the same conveniences, customs, etc., to which one was accustomed at home, is, under certain circumstances, an important element of political and religious freedom. Moreover, the bright side and the dark of every class of owners, especially the dread of all unnecessary and also of all necessary change, must be common to rent and interest. Hence, where there is a marked and well-defined separation of the branches of income, it will be always considered a difficult but unavoidable problem, how to enable mere labor to take an active part in the affairs of the state.[202-5]
In times when calm prevails (not, however, in transition-crises such as are referred to in § 24), there is a public opinion concerning merit and reward, we might say a public conscience, by which a definite relation of the three branches of income to one another is declared equitable. Every "fair-minded man" feels satisfied when this relation is realized, and this feeling of satisfaction is one of the principal conditions precedent to the prosperity of production; inasmuch as upon it depends the participation (Theilnahme) of all owners of funds and forces. Every deviation from this relation or proportion is, of course, a misfortune,[202-6] but never so great as when it takes place at the expense of the wages of labor. It should never be forgotten that rent is an appropriation of the gifts of nature, and that interest is a further fruit obtained by frugality from older labor already remunerated. Besides, the rate of wages when high, generally adds to the efficiency of labor, which cannot be claimed for interest or rent.[202-7] The best means to preserve the harmony of the three branches of income is, however, universal activity. "Rich or poor, strong or weak, the idler is a knave." (J. J. Rousseau.)
[202-1] The contrast between Adam Smith, at the end of the first book, and Ricardo, ch. 24, in regard to this point, is very characteristic of the times of those two authors. According to Smith, the private interests of the landowners and laborers run entirely parallel; only both classes are easily deceived as to their own interests. Capitalists understand their own interest very well, and represent it with great energy; but their interest is in opposition to the common good, in so far as their profit among a poor and declining people is higher than among a rich and flourishing one. Ricardo, on the other hand, thinks that the interest of the landowners is opposed to that of all others for the reason that they desire that the cost of the production of wheat etc. should be as high as possible.
Related to this is the fact that, in Adam Smith's time, the new theory of rent remained almost unnoticed, but that after 1815, it became rapidly popular. In a similar way, the socialists of the present time are wont to charge the undertaking class with opposing their own interests to those of the whole people, meaning by the whole the majority. (§ 196 a.)