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Laurence Gronlund.

The coöperative commonwealth in its outlines. An exposition of modern socialism online

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In this connection Ricardo very pertinently remarks "lam not
inattentive to the difficulty of comparing one hour's labor in
one employment with the same duration of labor in another.
But the estimation of different qualities of Labor comes soon
to be adjusted in the market with sufficient precision for all
practical purposes "

But we are not yet ready to define what Value is. Suppose
one man required tw:ce as much time to make a pair of boots
as is usually required, and suppose he should then want from
the tailor two coats in exchange, instead of one, he probably
would gel some such answer as this : " I don't care how long
time it takes you to make such a pair of boots. I know, that
on an average, an average shoemaker can make them in half
that time, and therefore your labor is of no more value."
Value is not then determined by the time which this or that
worker may need.

Again. Suppose tomorrow a machine is invented and gener-
ally introduced which will make t vo pair of boots in the same
time that now is required for one pair Then the Value will
be reduced one-half.

We, then, define Value as : the quantity of common human
labor, measured by time, ichichon an average is requisite, by the
implements generally used, to produce a given commodity.

We should now go on with our illustration and state the de-
duction which Socialists draw from the definition just given,
were it not for some misunderstandings that very likely al-
ready have arisen in many a reader's mind.

Thus, one. may object: Suppose I find a diamond in the
highway. Its value is, certainly, far above the trouble of pick-
ing it up. Does not this show that Bastiat's definition of Val-



20 THE rROFIT SYSTEM.

lie: that its measure is " the service done to the buyer, in sav-
ing him a certain amount of effort," is the more correct
one. We answer : People are not in the habit of finding dia-
monds in the highways. If they were, diamonds would soon
be as cheap as pebbles. Diamonds will come to the tinder dear
enough, if he were to seek them in Hindustan or Brazil, where
they are usually found. Remember that the average amount
of labor is a part of our definition.

A word more in regard to that theory of " service," -which
so many reformers in our country have got into their heads
without knowing to whom they owe it. Bastiat it was who
invented that term in order to get over the apparent mischief
Ricardo's theory worked ; who expressly selected it because
its meaning was equivocal. Its efficacy lies entirely in the shift-
ing uses of an ambiguous term. Bastiat's definition really
amounts to saying, that the value of a railroad-ticket from
Boston to Worcester is measured by the time, trouble and ex-
pense which I may "save" in not walking or driving that dis-
tance! Why, our progress depends on exactly the reverse!
On this, that values of articles become constantly less and less in
proportion to the trouble I should have to undergo in produc-
ing them by my own efforts ! So that, finally, values and troub-
les of mine bear no relation at all to each other.

Again, we shall, of course, be charged with having disre-
garded the law of Demand and Supply. And yet. we distinct-
ly mentioned, that we. so far, only spoke of articles that may
be indefinitely increased. Wares, that cannot be thus increased,
like rare pictures and wines, and other wares in times of scarci-
ty, have what is called, a k; monopoly value.*' that is. their val-
ue is not measured by the labor contained — crystah'sed — in then,
at all, but by Demand and Supply, exclusively. And even
with regard to wares that may be indefinitely increased (the
vast majority of all wares) we, with Kicardo, do not deny
that "there are accidental and temporary deviations of the
actual market from their primary, and natural price."

That which we lay stress upon is, that the labor expended
on wares measures, and te, their primary and natural value.
Labor expended constitutes, so to speak, their level value. De-



THE PROFIT SYSTEM. 21

mand and Supply have, as to those wares, simply theeffeet of
making their price (that is. their value expressed in money —
in gold and silver) vibrate, now a little above, now a little be-
low that level value of theirs; exactly as the wind raises and
depresses the waves in respect to the level of the sea.

We claim, then : — First, in the words of Eicardo : " Nature
by the aid of machinery adds to utilities (to " Worths'") by
making society richer; but the assistance which it affords,
adds nothing to Values, but always makes the latter fall."
And, on the other hand, that Human Labor and Scarcity create
all Values. But since it is evident, that Scarcity cannot cre-
ate anything real, we must conclude that the Values which are
due to it, are unreal ones; and that it is human Labor alone
that creates all real values. [This of course, does not imply, that
there is not much Labor which does not create any Values at
all.] So it is not only now. but so it has always been. So it
will always be under any industrial system.

We can now return to our sketch. We left the manager hav-
ing taken the cotton cloth into the world's market for sale.
Suppose one hundred hours of common labor (that is, the un-
skilled labor to which, as we have seen, all skilled labor can
be ultimately reduced) necessary, under the prevailing mode
of production, to make this cloth, and another hundred hours
of common labor requisite to produce the bales of cotton and
that part of the machinery which has been used up, then the
value of the finished cotton cloth is two hundred hours of
common labor. That is. they will exchange with that amount
of labor crystallized in any other ware. Suppose they are ex-
changed (disregarding for the moment the oscillating influ-
ence of Demand and Supply) for an amount of gold, embody
ing two hundred hours of common labor. That gold is theL
taken to the office of our company.

But, since equal amounts of labor are exchanged, why dr
these moneyed. men engage in this operation? Do they do it
for fun?

Not a bit of it. We have now arrived at the Social-
ist deduction which is drawn from our definition of value,



22 THE PROFIT SYSTEM.

and which made it so important, that it should be thoroughly
understood. Our moneyed men first deduct from that heap
of gold lying before them their outlay for raw materials and
the wear and tear of machinery. The balance— the " cake "
in fact — they divide into two. let us say, equal portions. The
one portion they give to Labor, and the other — ?

Kemember that we stated, that there is plenty of labor in
the market.* Labor now-a-days is aware. Being a ware; it
possesses both Worth and Value. Its worth is its ability tc
produce our " cakes" — Values. Labor creates these. And its
(labor's) Value is precisely what the value of other wares is:
the amount of common human labor, necessary to '"'raise " and
maintain a laborer, in the manner customary at a given time
and in a given country.

Labor as Eicardo says, "has its natural value — depending
on the price of necessaries — and its market price," vibrating
above and below the former. The laborer, in other word?,
must sell his labor for wages, now a little above, now a little
below what it costs him to live and bring up his family.

That which we have hitherto called "the surplus." then
arises, because the laborer gets only about half of what he
produces. And what becomes of it? Fancy these moneyed
men reasoning to themselves : '• True, this surplus is the prod-
uct of our Labor, but didn't we agree to pay a stated price for
that; and haven't we paid it? True, also, that we have done
nothing but going through the effort of hiring our manager
and looking on. Never mind! ice call it profit." That name
they give it and put it into their pockets.

From this point we have no more use for the vague word
" Surplus""; we are now entitled to call it by the appropriate
name: Fleecings. If there was an English word for the
process of abstracting honey from the bees, we should prefer
tiiat, for the process of pocketing the proceeds of Labor is also
a stealthy one. Let it, however be distinctly understood that
in adopting this word " fleecings" we have not the remotest
idea of reflecting upon persons ; we use it, and shall use it
repeatedly, to condemn as impressively as possible the system
which allows and sometimes compels one class of men virtu-



THE PROFIT SYSTEM.



23



ally to say to another class : '* If you will work five hours a
day for us gratuitously, we will enable you to work the other
five hours for yourselves r ' — that is, to condemn the Profit Sys-
tem, the Wage-System. Observe that we said '* one class
of men." For, while in our illustration we assumed that the
owners of the cotton mill had all the means, needed for their
enterprise, we know that in many cases employers have to rent
land on which to build their factories and to borrow money to
defray their expenses. Such employers, of course, do not put
all the fieecings into their own pockets, but have to divide with
land owners, bankers and other u gentlemen at large." But
the fact is — and on that it is we lay stress — that the workers
receive only about half of what they produce, just enough to
keep up life and strength and bring up a new generation of
laborers, w T hile the other half stealthily passes into the pock-
ets of quite another class of men.

Now we can illustrate our "cakes," so that they present
this appearance :



Values for 1S60.



Values for 1S50.





"V


*r




-t •-i






3






3i c





Wages .


r 2













** rji


»q




_" r+






r/i




^*


*



$ 437,000,000.
Product of Labor.



Wages.


Interest.


Profit.


Rent.



n
n

a

on?

31



$ So5,oo*,ooo. Product of Labor.
Values for 1870.



Wages .

1


Interest.


Profit.


|


Rent.



n
n
n

3
W



$ 1,310,000,000. Product ot Labor.



24



THE PROFIT SYSTEM.



Values for 18S0.



Wages.


Interest.


Profit.


Rent.



rt
ft

a



$ 1,834,000,000. Product of Labor.

Here also is the place to note the answer to another ques-
tion which the object-lesson may suggest : What is the
average amount which the employing class fleeced from each
worker during the respective census years?

Id 1850 it amounted to #209.00 ;
" 18G0 it was 327.50;

" 1870 it rose to 345.00;

41 1880 it dropped to 323.50.

By the way. we ought here to remark that it will not do to
trust implicitly these or other calculations that might he made
on figures in the Census Reports (remember it is the employ-
ers who have furnished all data) ; especially is a comparison
of one census year with another liable to be very misleading,
since one Report differs materially from another both in meth-
od and accuracy. But these Reports are of great service,
when only, as here, a rough, approximate idea of the reality
is required.

We then find that in 1880 — a fairly prosperous year, as all the
above census years were, compared with our years of dis-
tress — the employer paid the worker on an average $346 in
wages and fleeced, on an average, from him the sum of $324.
That, perhaps, to many docs not seem extravagant.



«t


25


hi


8.100


it


50


u


" 16,200


tt


100


it


" 32.400


tt


500


tt


" 162.000


tt


1000


tt


" 324.030



THE PROFIT SYSTEM. 25

But he who employed 10 workmen gained $3.2-10
i« u tt

tt tt tt

tt It It

kt It It

tt tt tt

Three Hundred and Twenty-four Thousand dollars this latter
employer gained, fleeced, '-accumulated" (mark)! in one
year ! For what? what had the workers in return ? The priv-
ilege each to earn three hundred and forty-six dollars ! The priv-
ilege to use the soil, the machinery and all the resources of
our civilization, which this employer possesses!

It is on purpose that we so far in our exposition have avoid-
ed to use the word 4i Capital." Political Economists have sur-
rounded this category with such a hazy atmosphere that the
word now denotes a good many things. Yet, the question :
What is Capital? is of fundamental importance and relates to
the whole structure of our present Social order. We want-
that question answered, and the preceeding pages, indeed,
have been written for that purpose. But we are not concerned
about the meaning of the word — throughout this work we care
for the essence of things and not for the definition of words.
By k * Capital " we mean what in popular speech is meant.

He is called a "■ capitalist" who possesses wealth which
brings him an income without any wwk on his part. True,
many capitalists do some work of one kind or another, but
the remuneration they receive for that work has nothing to do
with their incomes as "capitalists" ; these latter are something
over and above such remuneration. We, therefore, mean by
* l Capital " : that part of wealth which yields its possessors an
income without work. But Ave are just as willing to adopt the
definition of some Economists, that Capital is 4 * the part of
wealth which is employed productively with a view to profit by
sale of the produce." for it is only by being thus employed,
that it yields an income.

The question, then, which we are now intent upon finding
an answer to is : What is the nature, the essence of that which



26 THE PROFIT SYSTEM.

we have agreed to call 4 - Capital "? We want to know it, and
therefore must learn the process ot its origin. That is a com-
paratively easy thing to us who already know the origin of
the " Surplus." Simply observe what our moneyed men. the
operators of the cotton mill, are doing. They add their flee-
cings to what wealth they had already, and make that increased
wealth pass through such another operation as we already
have described. The oftener they do that and the more op-
eratives they employ, the more surplus labor their wealth ab-
sorbs. Now inc. have " Capital"' and "'Capitalists.'" It is
these fleecings which, absorbed by wealth, turns it into *' Cap-
ital," and the pocketing these fleecings turus wealthy men in-
to •• capitalists."

Note, " Surplus'''' is the same as " fleecings," is the difference
between the price of Labor and the price of Labor s produce, is
the latter minus ( — ) the former.

Capital is the original little amount of wealth with which our
employers start — which they may and may not have earned —
phis (+) the sum of surplus values; is accumulated fleecings —
accumulated withheld wages.

Therein consists, really, the so-called "productivity" of
Capital : in possessing the spongy capacity of steadily going
on absorbing surplus labor. This capacity distinguishes it
from all other wealth (which other wealth the old Economists
called, very happily Revenue.) Far be it from us to deny the
invaluable assistance which Capital renders to Labor. But
Capital produces no Values whatever; it enables Labor to be
immensely more productive, that is all.

We have now reached the very core, the grand secret of the
present mode of production. This fact, that such a thing as
k ' Capital" exists, that it is acquired and increases, legit i-
mately. by fleecing those in its employ by the wage-system —
a fact, unknown to all former periods — is the one characteris-
tic mark of this era; wherefore it may with propriety be des-
ignated: the Capitalist era.

We took our illustration from the manufacturing industries.
The same lesson however, might have been equally well drawn
from agriculture, to the extent that the cultivator of the farm



THE PROFIT SYSTEM. 27

or plantation employs wage-laborers. Andwe anive at the
same results, if we direct our attention to the legitimate com-
mercial enterprises. For commerce, — legitimate commerce —
is an industry, and a productive industry. The labor of those
engaged in causing the cloth of the cotton mills of New Eng-
land to be transported to the heart of our continent and in
their handing it out in small pieces to consumers creates an
additional value in these pieces as fully as the labor of the
operatives creates value. But here, also, the profits which
swell the fortunes of our merchant '• princes" are not the
result of their labor, but fleecings, exactions, from the labor
of their employees. The scores of millions of an A. T.
Stewart were the result of the work of thousands of his fel-
low men — fleeced from them by the process, already described.

Thus in all industries, manufacturing, mining, agricultural
and commercial, the legitimate fleecings which go to make
up < Capital, come out of the producers — we say legitimate fleec-
ings, following naturally, as they do, from ihe wage-sys-
tem. They are all fleecers, whether it be the capitalist who
joins millions to his millions, or the workingman who brings
his hard earned earnings to the bank for the sake of the in-
terest. One is not better than the other. We do not blame
either; they simply conform to the system we are living un-
der. But we claim, that in this difference between wages paid
and the proceeds of Labor, in this little fold lies hidden the germ
of all profit, interest and rent, of all pauperism and of nearly all
modern crime.

Now we can justly estimate the accounts which recent econ-
omists have given us of Capital. Some, with the evident de-
sign of drawing their attention away from the fleecing process,
seek to confound men's minds with most reckless definitions.
When in popular speech knowledge and skill are called •* ( "ap-
ical," every one is aware that it is a metaphor. But when
economists gravel}- apply that term to such acquisitions, to
the wheel-barrow of the day laborer and the wooden horse of
the wood-sawyer, then we have a right to dismiss them, some-
what contemptuously, with the remark, that in such case we
are all, indeed a band of brother capitalists — since everybody



28 THE PROFIT SYSTEM.

has. at least, got a coat to his back — such as it is; — hut tben x
also, we have amongst us a great many starving "capitalists."
Then the German economist who claims the title of "capital-
ist" for the bear who goes into winter quarters with lots of
fat on him is no wit after all, but a sober truth-teller.

Others, again, J. S. Mill among them, attribute capital to
saving. The tendency of such an account is equally obvious.
It insinuates, that capitalists are a highly deserving class of
people, indeed, since it is due to their abnormal, unselfish "ab-
stinence." that we have any Capital at all!

Well, all that we have is either consumable or inconsuma-
ble. The consumable goods like grain or meat — cannot be
4<> suved" for any length of time; they must be consumed, or
they spoil ; the capitalists therefore onlysave herein the same
way that soldiers ** save " the chickens from being eaten by
the enemy. The inconsumable things, like machinery, leath-
er, coin — must be " saved "' anyhow, since they cannot be de-
voured. And if it is any merit in capitalists, that they have
"saved" ?. e., not devoured these, why — then it must be ac-
counted them a merit, we suppose, that they have "saved"
the very earth, or the moon, since they have not consumed
these as yet! " Saving," therefore, is absolutely inappropri-
ate here, as it properly means the accumulating such thing
which might have been consumed.

Much more to the point, therefore, is that other stereotypic
definition of Capital, that it is "accumulated Labor." Yes it
is ; but why then do those who work most not " accumulate "
Capital? All, nothing is so dangerous as a truth in a delusive
dress. This definition omits to state, who does the laboring
and who the accumulating. What a heaven-wide difference
there is between the two activities, we have already noted.
But the definition by that very omission, though it looks so in-
nocent, insinuates that Capital at large is formed by wage-
laborers laying up their earnings, and that in that way they be-
come the capitalists. This insinuation is, to speak emphati-
cally, a falsehood. The first thousand dollars may sometimes
be formed in that way; the following millions — never. It is
simply impossible. Let us suppose a laborer earning $2.00 a



THE PROFIT SYSTEM. 29

day — a good deal more than the average wage — that he works
steadily along, that he never loses a day's work, that he is
never sick, that he lives like a Chinese, and thus is able to save
up half of his wages : $1 .09 a day. It will take him more than
3000 — Three Thousand — years to accumulate a million ! It is
this contemptible jugglery with words that the Socialist cri-
tique unmasks.

Now, furthermore, we can understand one very curious phe-
nomenon, to wit: how it comes that the charging of interests
was, until not so very long ago, considered infamous, while
now it is considered the mos>t natural thing in the world? A
conscientious man, like Jeremy JBentham, wanted even to make
it out to be one of the ** natural rights of man." The reason
of the change must lie in the nature of things.

The common arguments in favor of interest are transparent-
ly flimsy. They say, interest is a reward for abstinence. We
have already seen what kind of abstinence that is, — that of
not devouring gold coin and locomotives. But even if the
capitalist were abstinent, why should he be especially re-
warded for it by an increase? The apple which the boy ab-
stains from eating before going to bed does not grow bigger
during the night— the boy's •• reward " consists in his having
his apple the next morning. The German economist. Prof.
Roscher. is honest enough to admit : " Rent is an appropria
tion of the gifts of nature, and interest, at best, a further fruit,
obtained by frugality, from older labor, already remunerated."

That other argument, that interest is the payment of a ser-
vice rendered by the lender to the borrower is not better, foi
the service is reciprocal. The borrower preserves the capital
for the lender ; no slight service, since most capital will decay
when not in productive use. Socialists give the only satisfac-
tory explanation, and here it is:

The Roman Jurists used to pay: ; '\Vhat is mostly done
governs all other cases." In former times when people bor-
rowed money, .they generally did it, because they were in dis-
tress, and it was. very naturally, deemed disgraceful to take
advantage of another's misfortunes. The law and the Church
therefore, denounced all interest as usury. But now-a-days



30 the rr.oFiT system.

a person generally borrows money, in order to ''make "mon-
ey in the manner we have described. The u trouble" he is

in, is the trouble how to get rich, — and the capitalists like to
share that trouble with him. Interest, now. is uothihg hut a
part of the lleecings, nothing but a fair division — therefore
proper.

Now we can fitly characterize the " harmony," the u part-
nership " — compared to that of the Siamese Twins — between
Capital and Labor, about which our comfortable classes talk
so unctuously.

%k lf there be in this world a partnership between men which
is natural, wise and useful " exclaimed lately Iloseoe Conkling
in one of his efforts, ** it is the partnership between Capital
and Labor."

Indeed, Capital and Labor are just as harmonious as roast
beef and a hungry stomach. There is the most beautiful har-
mony, the most natural partnership, between the two — when
then are united in one hand. But what another contemptible
jugarling with words we here have! As if there were no dif-
ference at all between Capital and individual "capital — ists\ "

Labor, indeed, could not get along very well without Cap-
ital. But we are not so sure, that our workers would not get
along tolerably well, if some beneficent spirit should take
all our capitalists and carry then; up to some other planet, say
Venus; especially ifthey had to leavetheir ( Capital behind them.
And. after all, they might take their Capital along with them
— what they could carry away — for Edward Atkinson has told
us that we should all be starving within one year, naked wiih-
in three, and houseless within ten years, if Capital was not
constantly being re-created by Labor.

The beautiful harmony between capitalists and laborers is
happily illustrated by Carlyle in the address of Plugson, the
manufacturer, to his workmen:

"Noble spinners! We have gained a hundred thousand
pounds, which i> mine; the three and sixpence daily was yours.
Adieu, drink my health with this groat each, which 1 giv?
you over and ahove."



THE PROFIT SYSTEM. 31


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