Wages of Labour

Profit of Capital

Rent of Land

[I. 1.]Wages are determined by the fierce struggle between capitalist and worker. The capitalist inevitably wins. The capitalist can live longer without the worker than the worker can live without him. Combination among capitalists is habitual and effective, while combination among the workers is forbidden and has painful consequences for them. In addition to that, the landowner and the capitalist can increase their revenues with the profits of industry, while the worker can supplement his income from industry with neither ground rent nor interest on capital. This is the reason for the intensity of competition among the workers. It is, therefore, only for the worker that the separation of capital, landed property, and labour, is a necessary, essential, and pernicious separation. Capital and landed property need not remain constant in this abstraction, as must the labour of the workers.
...So, for the worker, the separation of capital, ground rent, and labour, is fatal.
....For wages, the lowest and the only necessary rate is that required for the subsistence of the worker during work and enough extra to support a family and prevent the race of workers from dying out. According to [Adam] Smith, the normal wage is the lowest which is compatible with common humanity -- i.e., with a bestial existence. [See Smith, The Wealth of Nations, 2 vols., Everyman edition, Vol. I, p. 61.]
....The demand for men necessarily regulates the production of men, as of every other commodity. If the supply greatly exceeds the demand, then one section of the workers sinks into beggary or starvation. The existence of the worker is, therefore, reduced to the same condition as the existence of every other commodity. The worker has become a commodity, and he is lucky if he can find a buyer. And the demand on which the worker's life depends is regulated by the whims of the wealthy and the capitalists. If supply exceeds demand, one of the elements which go to make up the price -- profit, ground rent, wages -- will be paid below its price. A part of these elements is, therefore, withdrawn from this application, with the result that the market price gravitates towards the natural price as the central point. But 1. it is very difficult for the worker to direct his labour elsewhere where there is a marked division of labour; and 2. because of this subordinate relationship to the capitalist, he is the first to suffer.
....Thus the worker is sure to lose and to lose most of all from the gravitation of the market price towards the natural price. And it is precisely the ability of the capitalist to direct his capital elsewhere which either drives the worker, who is restricted to one particular branch of employment, into starvation or forces him to submit to all the capitalist's demands.

[II. 1.]
[XVII. 1.]

1. Capital
(1)[I. 2.]
Upon which basis arises Capital -- i.e., private property from the products of another's work?
...."Even if capital cannot be reduced to simple theft or fraud, it still needs the assistance of legislation to sanctify inheritance." [Jean-Baptiste Say, Traie d'economie politique, third edition, 2 volumes, Paris, 1817, I, p. 136, footnote]
....How does one become an owner of productive stock? How does one become owner of the product, and what allows this commercial stock to grow?
....By virtue of positive right. [Say, II, p. 4]
What does one acquire with capital, with the inheritance of great wealth, for example?

....The person who acquires, or succeeds to a great fortune, does not necessarily acquire or succeed to any political power....The power which that possession immediately and directly conveys to him, is the power of purchasing; a certain command over all the labour, or over all the produce of labour, which is then in the market." [Smith, Wealth of Nations, I, pp. 26-7]
....Capital is, therefore, the power to command labour, and its products. The capitalist possesses this power not on account of his personal or human properties but insofar as he is an owner of capital. His power is the purchasing power of his capital, which nothing can withstand.
....Later, we shall see how the capitalist, by means of capital, exercises his power to command labour; but we shall then go on to see how capital, in its turn, is able to rule the capitalist himself.
....What is capital?

...."A certain quantity of labour stocked and stored up. .."
[Smith, p. 295 ]

....Capital is stored up-labour.
....(2) Bonds, or stock, is any accumulation of the products of the soil or of manufacture. Stock is only called capital when it yields its owner a revenue or profit.

2. The Growth of Capital

...."The profit or growth of capital is quite different from the wages of labour. This difference shows itself in two ways: firstly, the profits of capital are regulated altogether by the value of the stock employed, although the labour of inspection and direction for different capitals may be the same. Furthermore, in many large factories, the whole labour of this kind is committed to some principal clerk, whose wages never bear any regular proportion to the
[II. 2.]
[XVII. 2.]

[I. 3.] Landlords' right has its origins in robbery. [Say, I, p. 136, n.2] Landowners, like all other men, love to reap where they never sowed, and demand a rent even for the natural produce of the land. [Smith, I, p. 44]
...."The rent of land, it may be thought, is frequently no more than a reasonable profit or interest for the stock laid out by the landlord upon its improvement. This, no doubt, may be partly the case upon some occasions.... The landlord demands a rent even for unimproved land, and the supposed interest or profit upon the expense of improvement is generally an addition to this original rent. Those improvements, besides, are not always made by the stock of the landlord, but sometimes by that of the tenant. When the lease comes to be renewed, however, the landlord commonly demands the same augmentation of rent as if they had been all made by his own".
..."He sometimes demands rents for what is altogether incapable of human improvements." [Smith, I, p. 131 ]

....Smith gives as an example of this last case, kelp,
...."a species of seaweed which, when burnt, yields an alkaline salt useful for making glass,soap, etc. It grows in several parts of Great Britain, especially in Scotland, but only upon such rocks as lie within the high water mark, which are twice every day covered with the sea and of which the produce, therefore, was never augmented by human industry. The landlord, however, whose estate is bounded by a kelp shore of this kind, demands a rent for it as much as for his corn fields. The sea in the neighborhood of the islands of Shetland is more than commonly abundant in fish, which make a great part of the subsistence of their inhabitants.
[II. 3.]
[XVII. 3.]

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