By G. M. STEELE, D.D.

II.
PRODUCTION, CONTINUED—CAPITAL—COMBINATION AND DIVISION OF LABOR.

5. We have already seen that an essential to any considerable production is capital. We have seen the nature of capital and how it comes to exist. We have also learned that though capital implies saving, mere saving is not the sole condition of capital; indeed, a narrow penuriousness prevents the rapid accumulation of capital. The man who is accustomed to bring his water from a spring a quarter of a mile from his house instead of digging a well at the cost of a few dollars, or a few days’ work, acts uneconomically. In the long run the bringing of the water from the spring costs him much more than the digging of the well. The man who has extensive grain-fields, and who, for the sake of saving the expense of a reaper, or even a cradle, continues to use the sickle, will find that his saving results in a loss instead of a gain.

A man does not need to be rich in order to be a capitalist. When the savage has invented a bow and arrows he has the rudiments of capital. The laborer who has reserved out of his earnings enough to buy him a set of tools, or a few acres of land, is as really a capitalist as the owner of factories or railroads. Whatever property is used for production is capital.

Capital exists in many forms. It has been generally divided into fixed and circulating, though the limits of these divisions are not very precisely defined. The main difference consists in this, that while certain kinds of capital are used only once in the fulfillment of their purposes, other kinds are used repeatedly. Fuel can be burned but once. An axe may serve for years. Circulating capital is of two kinds:

(1) There are the stock and commodities which are to be consumed in reproduction; (a) the material out of which the new product is to be made, as lumber for cabinet ware, leather for shoes, etc.; (b) food and other provisions for the sustenance of the laborers.

(2) There is the stock of completed commodities on hand and ready for the market. The chairs that are finished and ready for sale in the chair factory are of this character. It is to be observed that the same article may be at one time circulating and at another fixed capital. Thus the chairs just spoken of, while they are in the hands of the manufacturer, or passing through those of the dealers, are circulating capital. It is only when they become fixed in use that their character changes.

Fixed capital consists (1) of all tools, implements, and machinery, used in the trades. Here, too, belong all structures of every sort for productive purposes; (2) all beasts of burden and draft; (3) all improvements of land implied in clearing, fencing, draining, fertilizing, terracing, etc.; (4) all mental acquisitions gained by labor and which give man power for productive results.

Obviously capital, by whomsoever owned, is an advantage to the laborer. But such capital is useless to the owner unless he can unite it with labor. So, too, the ability to labor is of no benefit to the laborer unless he can employ it in connection with capital. Generally the more capital there is in a community, other things being equal, the better it is for the laborer; and the more laborers there are, other things being equal, the better it is for the capitalist. When a factory burns down it may destroy only a small part of the wealth of the owners, and they may not palpably suffer; but it is very likely to deprive the laborers, who are connected with it, of the means of securing their daily sustenance.

There is no natural antagonism of interests between capital and labor, but rather the utmost concord and interdependence. Whatever conflicts arise between the laborers and the capitalists come from the unnatural selfishness and jealousy of the parties concerned.

6. As has been intimated, it is only by application of principles underlying political economy that we come to the conditions of the highest production, or, in other words, find how to satisfy the largest range of desires to the greatest extent at the smallest cost of labor. One of the chief means of effecting this is by the combination and division of labor. Recalling what was said concerning association and individuality, we shall see what principles are involved here, and how naturally they came into operation. As there was seen to be no antagonism between the two latter conceptions when carefully analyzed, so there is none, but rather the opposite, between combination and division of labor. It is true that there are instances where combination may take place without division, as when men unite to effect purposes which one could not accomplish except in much more than the proportionate time; as also in some cases to affect purposes which the individual could not effect in any length of time, such as the moving and placing of heavy timbers and stones, the management of ships and railway trains, etc. But for the most part men divide their labor in the process in order that they may combine the result. This is done in two ways:

(1) Men divide up the work of supplying human wants into different trades and occupations, according to their several tastes and aptitudes. Each man needs nearly the same that every other needs. But while each provides for only one kind of want, he provides more than enough to satisfy his own desire in that particular respect, and contributes the overplus to meet that same want in others. As all others do the same, each is contributing to meet the desires of one and all to each. The shoemaker, the tailor, the carpenter, the cabinet-maker, the blacksmith, the weaver, the paper-maker, the tin-man, the miner, the smelter, the painter, the glazier, etc., are all contributing to supply the farmer’s needs, and the farmer is contributing to all their needs. The wants of all are many times more fully met in this way than if each one should undertake to supply all his own wants.

(2) In some complicated trades the work is divided into a number of processes. There are men who could do every one of these parts; but such men are few, and their labor very costly, because some of the parts require rare skill and talent. What is needed is to organize several grades of laborers, so that the physically strong, the intelligent and skillful may have the work that only they can do; the less strong and skillful may find employment in the lighter and easier parts, and so all grades of ability down to the delicate woman or the little child, and up to the most powerful muscle and most advanced intelligence, can find their place. It is almost incredible how great is the increase of productiveness from the mere economical arrangement of workers. It is said that in so simple a matter as the making of pins, where the work is divided into ten processes and properly distributed, that the production will be two hundred and forty times as much as if each man did the whole work on each pin.

This connects itself with another important condition of large production. I mean the diversification of employment in a community. It is only in such a varied industry that all the varied tastes, aptitudes and abilities of society can find scope and adaptation; and without this, production must fall far short of its possibilities. This, too, is required to develop those differences which constitute individuality, and on which association depends.

There are other conditions of enlarged production, such as are implied in freedom, good government, and the moral character of the community, the influence of each of which will easily suggest itself to thoughtful minds.

III.—CONSUMPTION.

1. Consumption is the destruction of values. Production implies consumption. In general, all material is destroyed in entering into new forms of wealth. Thus, leather must be destroyed in order to the production of shoes. Flour must disappear in the manufacture of bread, and wheat in the making of flour. Every kind of implement, or machine or structure is consumed by use. This consumption is immediate, or by a single use; or it is gradual. The food that we eat and the fuel that we burn are examples of the former; tools, bridges, buildings and aqueducts are examples of the latter. It is accomplished in a few months or years; or is protracted through centuries.

2. Consumption is either voluntary or involuntary. Of the latter kind we have instances in the natural decay of objects, as in wood and vegetables; the rusting of iron, the mildew and the moth-eating of cotton and woolen fabrics, and the wearing away by attrition of gold, silver, and other metals; also the destruction caused by vermin. Much of this may be prevented by the prudent foresight which sound economy enjoins; yet much loss will inevitably take place. A great deal of consumption is accidental. Great destruction is caused by fires, steam-boiler explosions, floods and tornadoes, earthquakes and volcanic eruptions.

3. Voluntary consumption is either productive or unproductive. The former is when the material appears in new form and with a higher value, as cloth made into garments and iron into hardware and cutlery. Unproductive consumption occurs, both in the cases before mentioned of natural and accidental consumption, and in cases where gratification of desire is the sole object sought and achieved, as when one eats and drinks simply for the enjoyment, and without reference to the waste of nature or the nourishment of the system.

It is not altogether easy to discriminate between these two kinds of consumption. We readily see the difference between a man’s drinking a quantity of whiskey, not because it will help him in the performance of any duty, but because he likes it, and the scattering of a quantity of seed over the ground in spring. There is no doubt that one act is productive and the other unproductive. But there are cases where the distinction is less clear.

It is not necessarily a case of unproductive consumption when one destroys value for the sake of gratifying some desire. Probably a majority of men eat and drink simply because they desire food and drink, having no thought of any ulterior object. Yet this eating and drinking is absolutely essential to productive labor. The wealth consumed in this way reappears, to a large extent, in the products of human industry.

Still there is much really unproductive consumption; a destruction of value, in the place of which no other value ever appears. There are, for instance, men and women—

Vast quantities of wealth are consumed in riotous living, in greedy and vulgar extravagance, and unmeaning magnificence. There is also much consumption designed to be productive, but failing of its end through misdirection. Large amounts of property are sometimes invested in enterprises which prove failures. This occurs partly from miscalculation or negligence, and partly from a disposition to trust to chances—the gambler’s calculation. In these ways much wealth is consumed with no consequent product.

4. It is not easy to draw the line between the ordinary conveniences of life and its luxuries; nor can it be stated to what extent the latter in any sense of the term are economically allowable. What to one class of persons may be a luxury to another class may be almost a necessity. So what might in one age have been a rare and expensive indulgence, is in a more advanced period among the cheaper and more ordinary commodities. I call special attention to three kinds of consumption:

(1) There is the consumption necessary to life and the performance of productive labor. The word necessary here is used in its liberal rather than its restricted sense. The absolute necessities of human life are very few. It does not even require much to keep a man in working condition. But to keep him where there is a larger kind of living, and where his energies of both body and mind, together with the moral qualities which render him most efficient, are at their best, the consumption must be more generous.

Besides subsistence there must be materials, tools, machines, and a variety of conditions involving the destruction of value. It is desirable to sustain man not as a mere savage, but to give him the largest volume of human life; and the civilized man, it will be admitted, lives a broader life than the savage. We are not to forget that Political Economy aims at the increase of the value of man, more than at the multiplication of material wealth, or the increase of commerce, except as the latter are conditions of the former.

(2) A second kind of consumption is of such articles as minister to bodily enjoyment and meet certain mental appetencies of a lower order. They are not necessary to sustain life, nor to render it more efficient. On the contrary, they often impair the vigor and competence of the person. At the best they simply gratify certain desires without adding anything to the value of the man. To this category belong mere dainty food, gold and jewels, and other ornaments, valued solely because of their showiness and not for any artistic excellence; gay and costly apparel, in which the gayety and the costliness are the main features. These constitute a class of luxuries that are in nearly every sense non-productive. They favorably affect neither the individual nor society, and are for the most part hurtful to both.

(3) But not all consumption, the object of which is to gratify desire, is to be reckoned in this category. There are certain pleasures which ennoble and really enrich those who participate in them. There are desires the gratification of which enlarges the volume of one’s being. They are related not so much to man’s productive capability as to that which is the final cause of all production, and to which all wealth is only a means. The labor, material, implements, and whatever else is consumed in the production of the works or effects of genuine art, result in the most real wealth that exists. By this is meant not merely pictures, statues, books, carved work, tasteful tapestries, and similar objects which can be bought and sold, but also oratorios which you may hear but once; magnificent parks to which you may be admitted, but may never own; great actors and singers whose genius may be exhibited to others, but not possessed by them. It is true that much which properly belongs here may be so consumed as to deserve only a place in the second class; but it may also have those higher and nobler uses which imply production in the best sense.

5. Public consumption is the expenditure of means for society in its aggregate capacity. It has reference principally to the support of those agencies which are implied in the term government. The reasons for the necessity of such expenditures have already been given. The purposes to which such consumption is properly applied may be grouped as follows:

(a) The support and administration of government. This embraces compensation to executive, legislative and judicial officers, and expenditure for public buildings. (b) For works of public convenience. Here are included the paving and lighting of streets, water-works and sewerage. (c) For advancing science and promoting intelligence, by means of exploring expeditions, geological surveys, meteorological and astronomical observations, etc. (d) For the promotion of popular education. (e) For the support of the poor and the relief of the afflicted. (f) For national defense.

6. The general law of economical consumption, both individual and public, is that only so much and such a quality should be consumed as is necessary to effect the purpose designed, whether that be further production or individual gratification. It is nearly the same in the case of labor. In relation to the work to be done, the character, ability and skill of the laborer should be considered.