Letter: What is capital? (1927)

Letter to the Editors from the September 1927 issue of the Socialist Standard

“Critic” writes objecting to a statement made by “Gilmac” in an article, “The Source of Wealth” in the March “S.S.” The offending passage was “Capital is wealth used in a way that profit results from such use.” “Critic” says that, “Capital is capital whether profits or losses accrue from the use of wealth.”

“Critic” also writes the following :—

“The S.P.G.B. argue that the workers pay neither rates nor taxes; that the workers do not contribute to rates or taxes in the prices they pay for food, clothing, and shelter.

“If so, why the rush on the part of merchants and such people to take tea, tobacco, etc., out of bond before the operation of a new Budget.”

A Critic.

Answers.

Question 1 : Our critic is too smart entirely; but why did not he quote the following sentence? Let me assist him with the quotation in full :

“Capital is wealth used in a way that profit results from such use. Strictly speaking, capital is money invested.”

Of course, from the point of view of a definition, it does not matter whether profits or losses accrue, hence the statement “money invested.” The first sentence was intended to be no more than a general statement (which is quite correct) to introduce the substance of the article, “The Source of Wealth,” a few paragraphs on profit.

Question 2 : “The rush on the part of merchants and such people to take tea, tobacco, etc., out of bond before the operation of a new Budget” is due to their fear that the new Budget may cut into their profits. What this has to do with the payment or non-payment of rates and taxes in food prices, etc., is too subtle for me to grasp. Perhaps our critic will explain at greater length.

Gilmac.