The Prodigal—Advantages of the poorest man in civilized life over the richest savage—Savings-banks, deposits, and interest—Progress of accumulation—Insecurity of capital, its causes and results—Property, its constituents—Accumulation of capital.

There is an account in Foster's Essays of a man who, having by a short career of boundless extravagance dissipated every shilling of a large estate which he inherited from his fathers, obtained possession again of the whole property by a course which the writer well describes as a singular illustration of decision of character. The unfortunate prodigal, driven forth from the home of his early years by his own imprudence, and reduced to absolute want, wandered about for some time in a state of almost unconscious despair, meditating self-destruction, till he at last sat down upon a hill which overlooked the fertile fields that he once called his own. "He remained," says the narrative, "fixed in thought a number of hours, at the end of which he sprang from the ground with a vehement exulting emotion. He had formed his resolution, which was, that all these estates should be his again; he had formed his plan, too, which he instantly began to execute." We shall show, by and by, how this plan worked in detail;—it will be sufficient, just now, to examine the principles upon which it was founded. He looked to no freak of fortune to throw into his lap by chance what he had cast from him by wilfulness. He neither trusted to inherit those lands from their present possessor by his favour, nor to wring them from him by a course of law. He was not rash and foolish enough to dream of obtaining again by force those possessions which he had exchanged for vain superfluities. But he resolved to become once more their master by the operation of the only principle which could give them to him in a civilized society. He resolved to obtain them again by the same agency through which he had lost them—by exchange. But what had he to exchange? His capital was gone, even to the uttermost farthing; he must labour to obtain new capital. With a courage worthy of imitation he resolved to accept the very first work that should be offered to him, and, however low the wages of that work, to spend only a part of those wages, leaving something for a store. The day that he made this resolution he carried it into execution. He found some service to be performed—irksome, doubtless, and in many eyes degrading. But he had a purpose which made every occupation appear honourable, as every occupation truly is that is productive of utility. Incessant labour and scrupulous parsimony soon accumulated for him a capital; and the store, gathered together with such energy, was a rapidly increasing one. In no very great number of years the once destitute labourer was again a rich proprietor. He had earned again all that he had lost. The lands of his fathers were again his. He had accomplished his plan.

A man so circumstanced—one who possesses no capital, and is only master of his own natural powers—if suddenly thrown down from a condition of ease, must look upon the world, at the first view, with deep apprehension. He sees everything around him appropriated. He is in the very opposite condition of Alexander Selkirk, when he is made to exclaim "I am monarch of all I survey." Instead of feeling that his "right there is none to dispute," he knows that every blade of corn that covers the fields, every animal that grazes in the pastures, is equally numbered as the property of some individual owner, and can only pass into his possession by exchange. In the towns it is the same as in the country. The dealer in bread and in clothes,—the victualler from whom he would ask a cup of beer and a night's lodging,—will give him nothing, although they will exchange everything. He cannot exist, except as a beggar, unless he puts himself in the condition to become an exchanger.

But still, with all these apparent difficulties, his prospects of subsisting, and of subsisting comfortably, are far greater than in any other situation in which he must labour to live. As we have already seen, the condition of by far the greater number of the millions that constitute the exchangers of civilized society is greatly superior to that of the few thousands who exist upon the precarious supplies of the unappropriated productions of nature in the savage life. Although an exchange must always be made—although in very few cases "the fowl and the brute" offer themselves to the wayfaring man for his daily food—although no herbs worth the gathering can be found for the support of life in the few uncultivated parts of a highly cultivated country—the aggregate riches are so abundant, and the facilities which exist for exchanging capital for labour are therefore so manifold, that the poorest man in a state of civilization has a much greater certainty of supplying all his wants, and of supplying them with considerably more ease, than the richest man in a state of uncivilization. The principle upon which he has to rely is, that in a highly civilized country there is large production. There is large production because there is profitable labour;—there is profitable labour because there is large accumulation;—there is large accumulation because there is unlimited exchange;—there is unlimited exchange because there is universal appropriation. John Tanner was accounted a rich man by the Indians—doubtless because he was more industrious than the greater number of them; but we have seen what privations he often suffered. He suffered privations because there was no capital, no accumulation of the products of labour, in the country in which he lived. Where such a store exists, the poorest man has a tolerable certainty that he may obtain his share of it as an exchanger; and the greater the store the greater the certainty that his labour, or power of adding to the store, will obtain a full proportion of what previous labour has gathered together.

In 1853 the amount of stock vested to the account of depositors in savings-banks in the United Kingdom was 34,546,434l. Since the establishment of savings-banks, 68,885,283l. had been so invested; and the gross amount of interest paid to the depositors had been 25,733,771l. This large capital, which had so fructified as to produce more than twenty-five millions as interest, was an accumulation, penny by penny, shilling by shilling, and pound by pound, of the savings of that class of persons who, in every country, have the greatest difficulty in accumulating. Habitual efforts of self-denial, and a rigid determination to postpone temporary gratification to permanent good, could alone have enabled these accumulators to retain so much of what they had produced beyond the amount of what they consumed.

The capital sum of more than thirty-four millions now belonging to the depositors in 575 savings-banks, represents as many products of industry as could be bought by that sum. It is a capital which remains for the encouragement of productive consumption; that is, it is now applied as a fund for setting others to produce,—to enable them to consume while they produce,—and in like manner to accumulate some part of their productions beyond what they consume. The millions of interest which the depositors have received is the price paid for the use of the capital by others who require its employment. The whole amount of our national riches—the capital of this and of every other country—has been formed by the same slow but certain process of individual savings, and the accumulations of savings, stimulating new industry, and yielding new accumulations.

The consumption of any production is the destruction of its value. The production was created by industry to administer to individual wants, to be consumed, to be destroyed. When a thing capable of being consumed is produced, a value is created; when it is consumed, that value is destroyed. The general mass of riches then remains the same as it was before that production took place. If the power to produce, and the disposition to consume, were equal and constant, there could be no saving, no accumulation, no capital. If mankind, by their intelligence, their skill, their division of employments, their union of forces, had not put themselves in a condition to produce more than is consumed while the great body of industrious undertakings is in progress, society would have been stationary,—civilization could never have advanced.

It may assist us in making the value of capital more clear, if we take a rapid view of the most obvious features of the accumulation of a highly civilized country.

The first operation in a newly settled country is what is termed to clear it. Look at a civilized country, such as England. It is cleared. The encumbering woods are cut down, the unhealthy marshes are drained. The noxious animals which were once the principal inhabitants of the land are exterminated; and their place is supplied with useful creatures, bred, nourished, and domesticated by human art, and multiplied to an extent exactly proportioned to the wants of the population. Forests remain for the produce of timber, but they are confined within the limits of their utility;—mountains "where the nibbling flocks do stray," have ceased to be barriers between nations and districts. Every vegetable that the diligence of man has been able to transplant from the most distant regions is raised for food. The fields are producing a provision for the coming year; while the stock for immediate consumption is ample, and the laws of demand and supply are so perfectly in action, and the facilities of communication with every region so unimpeded, that scarcity seldom occurs, and famine never. Rivers have been narrowed to bounds which limit their inundations, and they have been made navigable wherever their navigation could be profitable. The country is covered with roads, with canals, and now, more especially, with railroads, which render distant provinces as near to each other for commercial purposes as neighbouring villages in less advanced countries. Science has created the electric telegraph, by which prices are equalized through every district, by an instant communication between producers and consumers. Houses, all possessing some comforts which were unknown even to the rich a few centuries ago, cover the land, in scattered farm-houses and mansions, in villages, in towns, in cities, in capitals. These houses are filled with an almost inconceivable number of conveniences and luxuries—furniture, glass, porcelain, plate, linen, clothes, books, pictures. In the stores of the merchants and traders the resources of human ingenuity are displayed in every variety of substances and forms that can exhibit the multitude of civilized wants; and in the manufactories are seen the wonderful adaptations of science for satisfying those wants at the cheapest cost. The people who inhabit such a civilized land have not only the readiest communication with each other by the means of roads and canals, but can trade by the agency of ships with all parts of the world. To carry on their intercourse amongst themselves they speak one common language, reduced to certain rules, and not broken into an embarrassing variety of unintelligible dialects. Their written communications are convoyed to the obscurest corners of their own country, and even to the most remote lands, with prompt and unfailing regularity, and now with a cheapness which makes the poorest and the richest equal in their power to connect the distant with their thoughts by mutual correspondence. Whatever is transacted in such a populous hive, the knowledge of which can afford profit or amusement to the community, is recorded with a rapidity which is not more astonishing than the general accuracy of the record. What is more important, the discoveries of science, the elegancies of literature, and all that can advance the general intelligence, are preserved and diffused with the utmost ease, expedition, and security, so that the public stock of knowledge is constantly increasing. Lastly, the general well-being of all is sustained by laws—sometimes indeed imperfectly devised and expensively administered, but on the whole of infinite value to every member of the community; and the property of all is defended from external invasion and from internal anarchy by the power of government, which will be respected only in proportion as it advances the general good of the humblest of its subjects, by securing their capital from plunder and defending their industry from oppression.

This capital is ready to be won by the power of every man capable of work. But he must exercise this power in complete subjection to the natural laws by which every exchange of society is regulated. These laws sometimes prevent labour being instantly exchanged with capital, for an exchange necessarily requires a balance to be preserved between what one man has to supply and what another man has to demand; but in their general effect they secure to labour the certainty that there shall be abundance of capital to exchange with; and that, if prudence and diligence go together, the labourer may himself become a capitalist, and even pass out of the condition of a labourer into that of a proprietor, or one who lives upon accumulated produce. The experience of every day shows this process going forward—not in a solitary instance, as in that of the ruined and restored man whose tale we have just told, but in the case of thriving tradesmen all around us, who were once servants. But if the labourer or the great body of labourers were to imagine that they could obtain such a proportion of the capital of a civilized country except as exchangers, the store would instantly vanish. They might perhaps divide by force the crops in barns and the clothes in warehouses—but there would be no more crops or clothes. The principle upon which all accumulation depends, that of security of property, being destroyed, the accumulation would be destroyed. Whatever tends to make the state of society insecure, tends to prevent the employment of capital. In despotic countries, that insecurity is produced by the tyranny of one. In other countries, where the people, having been misgoverned, are badly educated, that insecurity is produced by the tyranny of many. In either case, the bulk of the people themselves are the first to suffer, whether by the outrages of a tyrant, or by their own outrages. They prevent labour, by driving away to other channels the funds which support labour. In some eastern countries, where, when a man becomes rich, his property is seized upon by the one tyrant, nobody dares to avow that he has any property. Capital is not employed; it is hidden: and the people who have capital live not upon its profits, but by the diminution of the capital itself. In the very earliest times we hear of concealed riches. In the book of Job those who "long for death" are said to "dig for it more than for hid treasures." The tales of the East are full of allusions to money buried and money dug up. The poor woodman, in making up his miserable faggot, discovers a trap-door, and becomes rich. In India, where the rule of Mohammedan princes was usually one of tyranny, even now the search after treasure goes on. The popular mind is filled with the old traditions; and so men dream of bags of gold to be discovered in caves and places of desolation, and they forthwith dig, till hope is banished, and the real treasure is found in systematic industry. It was the same in the feudal times in England, when the lord tyrannized over his vassals, and no property was safe but in the hands of the strongest. In those times people who had treasure buried it. Who thinks of burying treasure now in England? In the plays and story-books which depict the manners of our own early times, we constantly read of people finding bags of money. We never find bags of money now, except when a very old hoard, hidden in some time of national trouble, comes to light. So little time ago as the reign of Charles II. we read of the Secretary to the Admiralty going down from London to his country-house, with all his money in his carriage, to bury it in his garden. What Samuel Pepys records of his doings with his own money, was a natural consequence of the practices of a previous time. He also chronicles, in several places of his curious Diary, his laborious searches, day by day, for 7000l. hid in butter firkins in the cellars of the Tower of London. Why is money not hidden and not sought for now? Because people have security for the employment of it, and by the employment of it in creating new produce the nation's stock of capital goes on hourly increasing. When we read in Blackstone's 'Commentaries on the Laws of England,' that the concealment of treasure-trove, or found treasure, from the king, is a misdemeanour punishable by fine and imprisonment, and that it was formerly a capital offence, we at once see that this is a law no longer for our time; and we learn from this instance, as from many others, how the progress of civilization silently repeals laws which belong to another condition of the people.

When we look at the nature of the accumulated wealth of society, it is easy to see that the poorest member of it who dedicates himself to profitable labour is in a certain sense rich—rich, as compared with the unproductive and therefore poor individuals of any uncivilized tribe. The very scaffolding, if we may so express it, of the social structure, and the moral forces by which that structure was reared, and is upheld, are to him riches. To be rich is to possess the means of supplying our wants—to be poor is to be destitute of those means. Riches do not consist only of money and lands, of stores of food or clothing, of machines and tools. The particular knowledge of any art—the general understanding of the laws of nature—the habit from experience of doing any work in the readiest way—the facility of communicating ideas by written language—the enjoyment of institutions conceived in the spirit of social improvement—the use of the general conveniences of civilized life, such as roads—these advantages, which the poorest man in England possesses or may possess, constitute individual property. They are means for the supply of wants, which in themselves are essentially more valuable for obtaining his full share of what is appropriated, than if all the productive powers of nature were unappropriated, and if, consequently, these great elements of civilization did not exist. Society obtains its almost unlimited command over riches by the increase and preservation of knowledge, and by the division of employments, including union of power. In his double capacity of a consumer and a producer, the humblest man has the full benefit of these means of wealth—of these great instruments by which the productive power of labour is carried to its highest point.

But if these common advantages, these public means of society, offering so many important agents to the individual for the gratification of his wants, alone are worth more to him than all the precarious power of the savage state—how incomparably greater are his advantages when we consider the wonderful accumulations, in the form of private wealth, which are ready to be exchanged with the labour of all those who are in a condition to add to the store. It has been truly said by M. Say, a French economist, "It is a great misfortune to be poor, but it is a much greater misfortune for the poor man to be surrounded only with other poor like himself." The reason is obvious. The productive power of labour can be carried but a very little way without accumulation of capital. In a highly civilized country, capital is heaped up on every side by ages of toil and perseverance. A succession, during a long series of years, of small advantages to individuals unceasingly renewed and carried forward by the principle of exchanges, has produced this prodigious amount of the aggregate capital of a country whose civilization is of ancient date. This accumulation of the means of existence, and of all that makes existence comfortable, is principally resulting from the labours of those who have gone before us. It is a stock which was beyond their own immediate wants, and which was not extinguished with their lives. It is our capital. It has been produced by labour alone, physical and mental. It can be kept up only by the same power which has created it, carried to the highest point of productiveness by the arrangements of society.