The Source of Wealth (1927)

From the March 1927 issue of the Socialist Standard

Capital is wealth used in a way that profit results from such use. Strictly speaking, capital is money invested. Unless money be invested in factories, machinery, raw material and labour-power no profit will come to capital. The origin of profit has to be sought in the nature of labour-power. The labourer is paid less than the value he adds to the article he produces—here is the whole secret of capital and the source from which flows the mighty revenues of the multi-millionaires.

Factories are built, machinery is constructed, raw material is obtained by working men and women applying their energies to the material Mother Nature so lavishly provides. Money itself, that which the capitalist invests and which appears to have a magic power of self-expansion, is also obtained by the application of human energy to natural resources. In fact, without the raw material and human energy there is no economic wealth at all. These two things together are alone the source of all economic wealth, in spite of the wonderful tales of the mysterious power attached to capital. Before capital was thought of wealth was produced; after capital has taken its place beside the other relics of past epochs wealth will still be produced.

While the shipbuilder builds the floating palace, other workers in other industries are making those things that are necessary so that he may eat, drink, clothe and house himself until such time as his work is completed. This is an instance of what is happening in all directions. Workers supplement each other’s efforts in various ways so that society shall live. People in this country make articles that are required in the tropics. People at the equator produce products required in temperate regions. Often the raw material comes from one region and is worked up in several other regions before taking its final shape for use. In fact, so much are the products of to-day the result of social effort, that if an article be picked up and inspected it will generally be impossible to determine how many regions of the earth were concerned in its production.

And what of the fruitful beast of burden by means of whose labour these products exist in such prolific quantities? The worker does not own his product, it belongs to the owners of capital. The more wages the capitalist pays, and the more waste there is, for a given amount of production, the less profit the capitalist reaps. Thus the capitalist has a great interest in low wages and peace in industry.

Everything is done to make the worker more fruitful, docile and cheap. Technical instruction is boomed because a better educated worker means higher skill, better organisation and, consequently, more products, with the expenditure of less energy. A recent development with the same object is the increasing attention given to industrial psychology.

In this latter direction, astonishing results have been recorded, as the following quotation indicates:—

  Increases of output, varying from five to as much as forty per cent., have been obtained by our methods in such industries as coal-mining, engineering, tinplate, weaving, spinning, cabinet-making, calico printing, seed-crushing, dressmaking, the manufacture of margarine, rubber and fancy goods and confectionery.—(Dr. Charles S. Myers, Director of the National Institute of Industrial Psychology, quoted by the Observer, 8/11/25.)

Many and various are the methods adopted to ensure the workers' docility. Large firms spend huge sums equipping sports' grounds and organising welfare work. Health Insurance, Old Age Pensions, Widows’ Pensions, Unemployment Insurance, and the like, are really capitals’ insurance against rebellion. They minimise the danger that is always on the doorstep. Formerly, these needs were met in charitable ways, now they are all organised in a way that makes them cheaper, more effective, keeps the worker less dissatisfied while at the same time binding him tighter to the wheel of capital by bonds of fear.

At its best, capitals’ ideal for the worker is to make of him a fruitful and contented slave, content to remain a beast of burden while his master enjoys the earth and the fulness thereof.

Gilmac.