not even exist, to be the slave of others. The rich man, who, in fact, pays nothing, receives every thing; while the poor man, who, in point of fact, pays every thing, receives nothing!—Gray.

CHAPTER II.

CAPITAL.

CAPITAL is wealth employed in the production of other wealth. Political economists divide capital into two kinds. 1. Fixed capital: 2. Circulating capital; or what, without encroaching on their capital, they can place in their stock reserved for immediate consumption. Fixed capital consists of the tools and instruments the labourer works with, the machinery he makes and guides, and the buildings he uses either to facilitate his exertions, or to protect their produce. The intention of this description of capital is to increase the productive powers of labour. Circulating capital consists of money, provisions, materials, and finished work; and its intention and use is to aid the labourer in producing those things upon which he is employed.

Throughout the world, there exists a serious contest between capital and labour. The claims of capital are sanctioned by almost universal custom; and as long as the labourer did not feel himself aggrieved by them, it was of no use opposing them with arguments. But now, when the practice excites resistance, we are bound, if possible, to overthrow the theory on which it is founded and justified. It is accordingly against this theory that my arguments will be directed. Wages vary inversely as profits; or wages rise when profits fall, and profits rise when wages fall; and it is therefore profits, or the capitalist's share of the national produce, which is opposed to wages, or the share of the labourer. The theory on which profits are claimed, and which holds up capital and accumulation of capital to our admiration as the main spring of human improvement, is that which the labourers must, in their own interest, examine, and must, before they can have any hope

of a permanent improvement in their own condition be able to refute. They must be able to show the hollowness of the theory on which the claims of capital, and on which all the oppressive laws made for its protection are founded.

"The produce of the earth," says Mr. Ricardo,-" all that is derived from its surface by the united application of labour, machinery, and capital, is divided among three classes of the community; namely, the proprietor of the land, the owner of the stock or capital necessary for its cultivation, and the labourers by whose industry it is cultivated."*

"It is self-evident," says Mr. M'Culloch, "that only three classes, the labourers, the possessors of capital, and the proprietors of land, are ever directly concerned in the production of commodities. It is to them, therefore, that all which is derived from the surface of the earth, or from its bowels, by the united application of immediate labour, and of capital, or accumulated labour, must primarily belong. The other classes of society have no revenue except what they derive either voluntarily or by compulsion from these three classes."

The proportions in which the whole produce is divided among these three classes is said to be as follows:-" Land

is of different degrees of fertility." "When in the progress of society, land of the second quality (or an inferior degree of fertility to land before cultivated) is taken into cultivation, rent immediately commences on that of the first quality, and the amount of that rent will depend on the difference in the quality of these two portions of land.”+ Rent, therefore, or that quantity of the whole produce of the country which goes to the landlords, is, in every stage of society, that portion of this produce which is obtained from every district belonging to a politically organized nation, more than is obtained from the least fertile land cultivated by or belonging to that nation. It is the greater produce of all the land which is more fertile than the least fertile land cultivated. To produce this surplus would not break the back, and to give it up would not break the heart

* Principle of Pol. Econ. 2d edit. preface, p. 1.

Principles of Pol. Econ. This theory of rent has been exploded by the author of the Catechism on the Corn Laws; but the error is not material to the arguments that follow.

of the labourer. The landlord's share, therefore, does not keep the labourer poor.

The labourer's share of the produce of a country, according to this theory, is the "necessaries and conveniences required for the support of the labourer and his family; or that quantity which is necessary to enable the labourers, one with another, to subsist and to perpetuate their race, without either increase or diminution." Whatever may be the truth of the theory in other respects, there is no doubt of its correctness in this particular. The labourers do only receive, and ever have only received, as much as will subsist them; the landlords receive the surplus produce of the more fertile soils, and all the rest of the whole produce of labour in this and in every country, goes to the capitalist, under the name of profit for the use of his capital.

Capital which thus engrosses the whole produce of a country, except the bare subsistence of the labourer, and the surplus produce of fertile land, is, "the produce of labour," "is commodities," "is the food the labourer eats, and the machines he uses;" so that we are obliged to give that enormous portion of the whole produce of the country which remains, after we have been supplied with subsistence, and the rent of the landlord has been paid for the privilege of eating the food we have ourselves produced, and of using our own skill in producing more. Capital, the reader will suppose, must have some wonderful properties, when the labourer pays so exorbitantly for it. In fact, its claims are founded on its wonderful properties, and to them, therefore, I mean especially to direct his attention.

Several writers have endeavoured to point out the method in which capital aids production.

Mr. M'Culloch says, "The accumulation and employment of both fixed and circulating capital is indispensably necessary to elevate any nation in the scale of civilization. And it is only by their conjoined and powerful operation that wealth can be largely produced and universally diffused."* "The quantity of industry," he further says, "therefore, not only increases in every country with the increase of the stock or capital which sets it in motion; but, in con

* Article Political Economy in Supplement to Ency. Britan.

sequence of this increase, the division of labour becomes extended, new and more powerful implements and machines are invented, and the same quantity of labour is thus made to produce an infinitely greater quantity of commodities. Besides its effect in enabling labour to be divided, capital contributes to facilitate labour, and produce wealth in the three following ways:-First, It enables us to execute work that could not be executed, or to produce commodities that could not be produced without it. Second, It saves labour in the production of almost every species of commodities. Third, It enables us to execute work better, as well as more expeditiously.'

Mr. Mill's account of these effects, though not so precise, is still more astounding. "The labourer," he says, (page 40,)" has neither raw materials nor tools. These are provided for him by the capitalist. For making this provision, the capitalist of course expects a reward." According to this statement the capitalist provides for the labourer, and only, therefore, expects a profit. In other parts of his book it is not the capitalist who provides, but the capital which works. He speaks of capital as an instrument of production co-operating with labour, as an active agent combining with labour to produce commodities, and thus he satisfies himself, and endeavours to prove to the reader, that capital is entitled to all that large share of the produce it actually receives. He also attributes to capital power of accumulation. This power or tendency to accumulate, he adds, is not so great as the tendency of population to augment-and on the difference between these two tendencies he and other authors have erected a theory of society which places poor mother Nature in no favourable light.

I shall now proceed to examine the effects of capital; and I shall begin with circulating capital. Mr. M'Culloch says, "without circulating capital," meaning the food the labourer consumes, and the clothing he wears, "the labourer never could engage in any undertaking which did not yield an almost immediate return." Afterwards, he says, "that division of labour is a consequence of previous accumulation of capital;" and he quotes the following passage from Dr. Smith, as a proper expression of his own opi

nions :

"Before labour can be divided, a stock of goods of

different kinds must be stored up somewhere, sufficient to maintain the labourer, and to supply him with the materials and tools for carrying on his work. A weaver, for example, could not apply himself entirely to his peculiar business, unless there was beforehand stored up somewhere, either in his own possession, or in that of some other person, a stock sufficient for his maintenance, and for supplying him with the materials and implements required to carry on his work, till he has not only completed, but sold his web. This accumulation must evidently be previous to his applying himself for so long a time to a peculiar business."""

The only advantage of circulating capital is, that by it the labourer is enabled, he being assured of his present subsistence, to direct his power to the greatest advantage. He has time to learn an art, and his labour is rendered more productive when directed by skill. Being assured of immediate subsistence, he can ascertain which, with his peculiar knowledge and acquirements, and with reference to the wants of society, is the best method of labouring, and he can labour in this manner. Unless there were this assurance there could be no continuous thought, no invention, and no knowledge but that which would be necessary for the supply of our immediate animal wants. The wea ver, I admit, could not complete his web, nor would the shipwright begin to build a ship, unless he knew that while he was engaged in this labour he should be able to procure food. A merchant certainly could not set out for

South America or the East Indies unless he were confident that during the period of his absence, he and his family could find subsistence, and that he would be able at the end of his voyage to pay all the expenses he had incurred. It is this assurance, this knowledge, this confidence of obtaining subsistence and reward, which enables and induces men to undertake long and complicated operations; and the question is, do men derive this assurance, from a stock of goods already provided, (saved from the produce of previous labour,) and ready to pay them, or from any other source?

I shall endeavour to show that this assurance arises from a general principle in the constitution of man, and that the effects attributed to a stock of commodities, under the name of circulating capital, are caused by co-existing labour.