A Lesson in Terms. (1918)

From the April 1918 issue of the Socialist Standard

Distinctions the workers must understand.

Wealth used for the reproduction of wealth is capital, says the orthodox school of political economy. This definition can only arise through failure to understand the fact that only in certain historical conditions and in a certain mode of production, does wealth become capital.

It is the habit of the orthodox school to treat of the present system of society as though it had always existed and always will. Hence wealth and capital are to them synonymous.

It was Karl Marx who laid bare the distinctive features of the present mode of wealth production, and in so doing treated it as having peculiarities that never existed in any phase of society that proceeded it. What Darwin, Spencer, Huxley, Haeckel, and a host of others have done within the domain of biology Marx, Engels, and Morgan have done for sociology. There has been a development from one form of life to another, and there has also been a development from one form of society to another.

The truth of this theory has become firmly established, but one would hardly credit it when listening to certain people who, while registering their approval of the now well-established facts of biology, completely fall to pieces when a similar process of scientific reasoning is applied within the domain of sociology. Thus terms that can only apply to-day are made use of in reference to past societies, whilst terms that should apply only to the past are made to do duty in reference to the present social order. It is through failure to understand this that the great confusion exists about the terms “wealth” and “capital.”

In treating of the capitalist mode of wealth production Marx begins bis investigation in the words:

“The wealth of those societies in which the capitalist mode of production prevails, presents itself as “an immense accumulation of commodities,’ its unit being a single commodity. Our investigation must therefore begin with the analysis of the commodity.”

How different this, from the method of the orthodox school, who failed to observe that the present mode of wealth production possessed characteristics that no other system ever possessed.

The chief reason for production to-day is the realisation of profit. The capitalists are not in the least concerned about the quality of the goods that are being produced. Their only concern is that, when the goods are placed upon the market and sold, they obtain a profit. This they must have, and in order to get it they care not in the least whether it is derived from the manufacture of bibles or beer, bullets or bread, boots or burglar’ jemmies.

In no form of society previous to capitalism did production for the great markets of the world exist; this is one reason why we must differ from those who imply that wealth and capital mean the same thing, in each and every set of social conditions. They remind us of a certain section, once famous in the world of science, who held that the theory of evolution did not apply to man.

In early tribal society man was in possession of but crude means of production, and his economic position was certainly very precarious. Says Prof. Jenks of the early savage: “The actual savage is usually a miserable, underfed, and undersized creature, naked and shivering, in constant terror of dangers seen and uuseen, with no family ties as we understand them with no certain food supply and no settled abode."

For participation in the chase the savage hunter had only one motive, namely, to use that which he gained by the chase to satisfy his needs—to feed and clothe him. There was no world market for him, no great social production with its organised factory system. It was in such conditions as these that we might say that wealth was used for the re-production of wealth.

Only when we arrive at the present mode of production can we find the true meaning of capital. The subject must be treated theoretically, as Karl Kautsky put it in his brilliant pamphlet, “From Handicraft to Capitalism.” The starting points of bourgeois society were peasant-farming and handicraft. The peasant family originally satisfied all their requirements. They produced all the food they needed, their tools, clothing, etc. They produced as much as they required and no more. Gradually, however, owing to the progress of agriculture, they produced a surplus of things which they did not want for their own use, and this surplus they exchanged for other things which they did want.

Now was the peasant a producer of commodities. The wheat he produced for his own use was not a commodity; that which he produced to exchange was. The illustration meets the point. That which is produced for use is not a commodity ; that which is produced for sale is a commodity.

Only in certain’ conditions docs an article become a commodity, and only in certain conditions does wealth become capital. A machine, for instance, could be used for the purpose of supplying some family need. Vast numbers of sewing machines are used to fulfil this function, but it would be absurd to call these machines capital.

Only when the machines are used for the purpose of turning out goods by means of purchased labour-power, to be placed upon the market, do they become capital.

Capital, then, to give it its true meaning in as simple language as possible is wealth used for the production of profit. With this definition it is stripped of all those mysterious properties that so many people seem to think it possesses. The great means of wealth production that are socially manipulated by the working class are individually owned by the capitalist class. Social production with individual appropriation is the characteristic of modern society. Let us produce, no matter what, so long as we get a profit, is the motto of the ruling class.

It is by reason of the existence of capitalism that the anomaly of starvation in the midst of plenty is with us. The individual ownership of the means of life gives rise to the vast production of commodities to deluge the world’s markets. Goods are produced in wild profusion, and far in excess of the effective demand for them, until finally the warehouses are choked and the markets glutted Production is strangled, a commercial crisis descends upon the community; and hundreds of thousands of workers are flung into the industrial reserve army, commonly known as the unemployed.

In earlier stages of society if man suffered from lack of food it was only because of the inadequacy of his menus to stave off any natural upset that might occur. But to-day, through man’s triumph over the forces of nature, he can produce wealth in sufficient abundance, irrespective of climatic conditions, to assure a comfortable existence for all. Under capitalist ownership and capitalist production, however, the workers, who are the wealth producers, suffer their greatest poverty when the warehouses are full of the wealth which they have produced and the markets surfeited with the products of their toil.

It is, of course, quite easy for the workers to accept off-hand any of the statements of certain pedants and sycophants, because the workers have been trained to think along capitalist lines, a course which the pseudo-Socialists encourage when they say that Socialism means the common ownership of land and capital, as do the I.L.P. and some pamphleteers of the B.S.P.

But with the ripening economic conditions and the burden of economic exploitation pressing more heavily upon the workers a way out of the horrible conditions will be sought, and it is for the Socialist Party to show the way. Confused terminology, which gives rise to confused ideas, must lie scattered to the winds. That is one of the first essentials of sound progress. The workers must learn to appreciate the true meaning of such terms as “wealth” and “capital” before they can understand the nature of the process by which they are robbed and held in bondage, and therefore before they can become fit and efficient instruments of working class emancipation.

Robert Reynolds