class of men who do nothing but work increases
the competition among the workers and therefore lowers their price. In
the factory system, conditions such as these reach their climax.
....(c) In a society which is becoming increasingly
prosperous, only the very richest can continue to live from the interest
on money. All the rest must run a business with their capital, or put
it on the market. As a result, the competition among the capitalists increases,
there is a growing concentration of capital, the big capitalists ruin
the small ones, and a section of the former capitalists sinks into the
class of the workers -- which, because of this increase in numbers, suffers
a further depression of wages and becomes even more dependent on the handful
of big capitalists. Because the number of capitalists has fallen, competition
for workers has increased, the competition among them has become all the
more considerable, unnatural and violent. Hence, a section of the working
class is reduced to beggary or starvation with the same necessity as a
section of the middle capitalists ends up in the working class.
So, even in the state of society most favorable to him, the inevitable
consequence for the worker and early death, reduction to a machine, enslavement
to capital which piles up in threatening opposition to him, fresh competition
and starvation or beggary for a section of the workers.
it is derived
must always be greater. The capital which employs the weavers, for example,
must be greater than that which employs the spinners; because it not only
replaces that capital with its profits, but pays besides, the wages of
the weavers; and the profits must always bear some proportion to the capital"
[Smith, p. 45]
....Hence, the growing
role played by human labour in fashioning the natural product increases
not the wages of labour but partly the number of profitable capitals and
partly the size of each capital in proportion to those that precede it.
....More later about the profit which the
capitalist derives from the division of labour.
....He profits in two ways: firstly, from
the division of labour and secondly, and more generally, from the growing
role played by human labour in fashioning the natural product. The larger
the human share in a commodity, the larger the profit of dead capital.
one and the same society, the average rates of profit on capital are more
nearly upon a level than are the wages of different kinds of labour. [Smith,
p. 45] In the different employments of capital, the ordinary rate of profit
varies more or less with the certainty or uncertainty of the returns;
... the ordinary profit of stock, though it rises with the risk, does
not always seem to rise in proportion to it." [ Smith, pp. 99-100]
....Needless to say,
profits also rise if the means of circulation (e.g., paper money) improve
or become less expensive.
3. The Rule of Capital over Labour and the Motives of the Capitalist
consideration of his own private profit is the sole motive which determines
the owner of any capital to employ it either in agriculture, in manufactures,
or in some particular branch of the wholesale or retail trade. The different
quantities of productive labour which may put it into motion,
.... This portion...
may still be considered as the natural rent of land, or the rent for which
it is actually meant that land should for the most part be let."
[Smith, I, p. 130-31 ]
...."The landlords, says Say, operate
a certain kind of monopoly against the tenants. The demands for their
commodity, which is land, is capable of an infinite expansion; but the
supply can only increase up to a certain point.... The agreement reached
between landlord and tenant is always as advantageous as possible to the
former.... Apart from the advantage which he derives from the nature of
the case, he derives a further one from his position, his larger fortune,
his credit and his standing; but the first of these advantages is in itself
enough to enable him at all times to profit from the favorable circumstances
of the land. The opening of a canal or road and a growth in population
and prosperity in a canton always raise the price of the rent.... What
is more, even if the tenant makes improvement on his plot of land at his
own expense, he can only benefit from this capital for the duration of
his lease; when his lease runs out, this capital remains in the hands
of the landlord. From this moment on, it is the latter who reaps the interest,
even though it was not he who made the original outlay; for now the rent
is raised proportionately."
[Say, II, pp. 142-3 ]
...."Rent, considered as the price paid
for the use of land, is naturally the highest which the tenant can afford
to pay in the actual circumstances of the land."
[Smith, I, p. 130 ]
...."The rent of an estate above ground
commonly mounts to what is supposed to be a third of the gross produce;
and it is generally a rent certain and independent of the occassional