Manhood of Humanity. :: Chapter V. Wealth

Chapter V. Wealth

I beg the reader to allow me to begin this chapter with a word of warning. The reader is aware that Criticism—by which I mean Thought—may be any one of three kinds: it may be purely destructive; it may be purely constructive; or it may be both destructive and constructive at the same time. Purely destructive criticism is sometimes highly useful. If an old idea or a system of old ideas be false and therefore harmful, it is a genuine service to attack it and destroy it even if nothing be offered to take its place, just as it is good to destroy a rattlesnake lurking by a human pathway, even if one does not offer a substitute for the snake. But, however useful destructive criticism may be, it is not an easy service to render; for old ideas, however false and harmful, are protected alike by habit and by the inborn conservatism of many minds. Now, habit indeed is exceedingly useful—even indispensable to the effective conduct of life—for it enables us to do many useful things automatically and therefore easily, without conscious thinking, and thus to save our mental energy for other work; but for the same [pg 094] reason, habit is often very harmful; it makes us protect false ideas automatically, and so when the destructive critic endeavors to destroy such ideas by reasoning with us, he finds that he is trying to reason with automats—with machines. Such is the chief difficulty encountered by destructive criticism. On the other hand, purely constructive criticism—purely constructive thought—consists in introducing new ideas of a kind that do not clash, or do not seem to clash, with old ones. Is such criticism or thought easy? Far from it. It has difficulties of its own. These are of two varieties: the difficulty of showing people who are content with their present stock of old ideas that the new ones are interesting or important; and the great difficulty of making new ideas clear and intelligible, for the art of being clear and perfectly intelligible is very, very hard to acquire and to practise. The third kind of criticism—the third kind of thought—the kind that is at once both destructive and constructive—has a double aim—that of destroying old ideas that are false and that of replacing them with new ideas that are true; and so the third kind of criticism or thought is the most difficult of all, for it has to overcome both the difficulty of destructive criticism and that of constructive thought.

The reader, therefore, if he will be good enough to reflect a little upon the matter, can not fail to appreciate [pg 095] the tremendous difficulties which beset the writing of this little book, for he must perceive, not only that the work belongs to the third kind of critical thought, but—what is much more—the errors it aims to destroy are fundamental, world-wide and old, while the true ideas it seeks to substitute for them are fundamental and new. This great difficulty, felt at every stage of this writing, is, for a reason to be presently explained, greatly enhanced and felt with especial keenness in the present chapter. I therefore beg the reader to give me here very special cooperation—the cooperation of open-mindedness, candor and critical attention. It is essential to keep in mind the nature of our enterprise as a whole, which is that of pointing the way to the science and art of Human Engineering and laying the foundations thereof; we have seen Human Engineering, when developed, is to be the science and art of so directing human energies and capacities as to make them contribute most effectively to the advancement of human welfare; we have seen that this science and art must have its basis in a true conception of human nature—a just conception of what Man really is and of his natural place in the complex of the world; we have seen that the ages-old and still current conceptions of man—zoological and mythological conceptions, according to which human beings are either animals or else hybrids of animals and gods—are [pg 096] mainly responsible for the dismal things in human history; we have seen that man, far from being an animal or a compound of natural and supernatural, is a perfectly natural being characterized by a certain capacity or power—the capacity or power to bind time; we have seen that humanity is, therefore, to be rightly conceived and scientifically defined as the time-binding class of life; we have seen that, therefore, the laws of time-binding energies and time-binding phenomena are the laws of human nature; we have seen that this conception of man—which must be the basic concept, the fundamental principle and the perpetual guide and regulator of Human Engineering—is bound to work a profound transformation in all our views on human affairs and, in particular, must radically alter the so-called social “sciences”—the life-regulating “sciences” of ethics, sociology, economics, politics and government—advancing them from their present estate of pseudo sciences to the level of genuine sciences and technologizing them for the effective service of mankind. I call them “life-regulating,” not because they play a more important part in human affairs than do the genuine sciences of mathematics, physics, chemistry, astronomy and biology, for they are not more important than these, but because they are, so to say, closer, more immediate and more obvious in their influence and effects. These life-regulating sciences [pg 097] are, of course, not independent; they depend ultimately upon the genuine sciences for much of their power and ought to go to them for light and guidance; but what I mean here by saying they are not independent is that they are dependent upon each other, interpenetrating and interlocking in innumerable ways. To show in detail how the so-called sciences will have to be transformed to make them accord with the right conception of man and qualify them for their proper business will eventually require a large volume or indeed volumes.

In this introductory work I cannot deal fully with one of those “sciences” nor in suitable outline with each of them separately. I must be content here to deal, very briefly, with one of them by way of illustration and suggestion. Which one shall it be?

Now among these life-regulating “sciences” there is one specially marked by the importance of its subject, by its central relation to the others and by its prominence in the public mind. I mean Economics—the “dismal science” of Political Economy. For that reason I have chosen to deal with economics. In the present chapter I shall discuss three of its principal terms—Wealth, Capital and Money—with a view to showing that the current meanings and interpretations of these familiar terms must be very greatly deepened, enlarged and elevated if they are to accord with facts and laws of human nature and if the so-called [pg 098] “science” which employs them is to become a genuine science properly qualified to be a branch of Human Engineering. It is to be shown that the meanings currently attached by political economists and others to the terms in question belong to what I have called the period of humanity's childhood; and it is to be shown that the new meanings which the terms must receive belong to the period of humanity's manhood. It will be seen that the new meanings differ so radically from the old ones as to make it desirable for the sake of clarity to give the new meanings new names. But this, however scientifically desirable, is impracticable because the old terms—wealth, capital, money—are so deeply imbedded in the speech of the world. And here comes into view the very special difficulty alluded to above and which led me to request the reader's special cooperation in this chapter. The difficulty is not merely that of destroying old ideas that are false; it is not merely that of replacing them with true ideas that are new; it is that of causing people habitually to associate meanings that are new and true with terms associated so long, so universally, so uniformly with meanings that are false.

The secret of philosophy, said Leibnitz, is to treat familiar things as unfamiliar. By the secret of “philosophy” Leibnitz meant the secret of what we call science. Let us apply this wholesome maxim in [pg 099] our present study; let us, in so far as we can, regard the familiar terms—wealth, capital and money—as unfamiliar; let us deal with them afresh; let us examine openmindedly the facts—the phenomena—to which the terms relate and ascertain scientifically the significance the terms must have in a genuine science of human economy. Examine “the facts” I say—examine “the phenomena”—for bending facts to theories is a vital danger, while bending theories to facts is essential to science and the peaceful progress of society.

Human beings have always had some sense of values—some perception or cognition of values. In order to express or measure values, it was necessary to introduce units of measure, or units of exchange. People began to measure values by means of agricultural and other products, such as cattle, for example. The Latin word for cattle was pecus, and the word pecunia, which came to signify money, accounts for the meaning of our familiar word pecuniary. The earliest units for measuring became unsuited to the increasing needs of growing trade, “business,” or traffic. Finally a unit called money was adopted in which the base was the value of some weight of gold. Thus we see that money came to mean simply the accepted unit for measuring, representing and expressing values of and in wealth.

But what is wealth? I have said that the old [pg 100] conceptions of wealth, capital and money—the conceptions that are still current throughout the world—belong to the period of humanity's childhood—they are childish conceptions. I have said that they must be replaced by scientific conceptions—by conceptions fit for humanity's manhood. The change that must be made in our conceptions of the great terms is tremendous. It is necessary to analyse the current conceptions of wealth, capital, and money—the childish conceptions of them—in order to reveal their falseness, stupidity and folly. To do this we must enter the field of Political Economy—a field beset with peculiar difficulties and dangers. All the Furies of private interests are involved. One gains the impression that there is little or no real desire to gain a true conception—a scientific conception—of wealth. Everybody seems to prefer an emotional definition—a definition that suits his personal love of wealth or his hatred of it. Many definitions of wealth, capital and money are to be found in modern books of political economy—definitions and books belonging to humanity's childhood. For the purpose of this writing they all of them look alike—they sufficiently agree—they are all of them childish. Mill, for example, tells us that wealth consists of “useful or agreeable things which possess exchangeable value.” Of capital one of the simplest definitions is this:

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“Capital is that part of wealth which is devoted to obtaining further wealth.” (Alfred Marshall, Economics of Industry.)

Walker (in his Money, Trade and Industry) defines money as follows:

“Money is that which passes freely from hand to hand throughout the community in final discharge of debts and full payment for commodities, being accepted equally without reference to the character or credit of the person who offers it, and without the intention of the person who receives it to consume it, or to enjoy it, or apply it to any other use than, in turn, to tender it to others in discharge of debts or full payment for commodities.”

Political economy has many different schools of thought and methods of classification. Its reasonings are mainly speculative, metaphysical, and legalistic; its ethics is zoological ethics, based on the zoological conception of man as an animal. The elements of natural logic and natural ethics are absent. The sophisticated ideas about the subject of political economy, bluntly do not correspond to facts. Our primitive forefather in the jungle would have died from hunger, cold, heat, blood poisoning or the attacks of wild animals, if he had not used his brain and muscles to take some stone or a piece of wood to knock down fruit from trees, to kill an animal, so as to use his hide for clothes and his meat for food, or to break wood and trees for a shelter and to make some weapons for defense and hunting.

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“In the first stone which he (the savage) flings at the wild animal he pursues, in the first stick that he seizes to strike down the fruit which hangs above his reach, we see the appropriation of one article for the purpose of aiding in the acquisition of another and thus we discover the origin of capital.” (R. Torrens, An Essay on the Production of Wealth.)

Our primitive forefather's first acquaintance with fire was probably through lightning; he discovered, probably by chance, the possibility of making fire by rubbing together two pieces of wood and by striking together two pieces of stone; he established one of the first facts in technology; he felt the warm effect of fire and also the good effect of broiling his food by finding some roasted animals in a fire. Thus nature revealed to him one of its great gifts, the stored-up energy of the sun in vegetation and its primitive beneficial use. He was already a time-binding being; evolution had brought him to that level. Being a product of nature, he was reflecting those natural laws that belong to his class of life; he had ceased to be static—he had become dynamic—progressiveness had got into his blood—he was above the estate of animals.

We also observe that primitive man produced commodities, acquired experiences, made observations, and that some of the produced commodities had a use-value for other people and remained good for use, even after his death.

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The produced commodities were composed of raw material, freely supplied by nature, combined with some mental work which gave him the conception of how to make and to use the object, and some work on his part which finally shaped the thing; all of this mental and manual work consumed an amount of time. It is obvious that all of these elements are indispensable to produce anything of any value, or of any use-value. His child not only directly received some of the use-values produced by him, but was initiated into all of his experiences and observations. (As we know, power, as defined in mechanics, means the ratio of work done to the time used in doing it.)

All those things are time-binding phenomena produced by the time-binding capacity of man; but man has not known that this capacity was his defining mark. We must notice the strange fact that, from the engineering point of view, humanity, though very developed in some ways, is childishly undeveloped in others. Humanity has some conceptions about dimensions and talks of the world in which we live as having three dimensions; yet even in its wildest imagination it can not picture tangibly a fourth dimension; nay, humanity has not learned to grasp the real meanings of things that are basic or fundamental. All of our conceptions are relative and comparative; all of them are based upon matters [pg 104] which we do not yet understand; for example, we talk of time, space, electricity, gravity, and so on, but no one has been able to define them in terms of the data of sensation; nevertheless—and it is a fact of the greatest importance—we learn how to use many things which we do not fully understand and are not yet able to define.

In political economy the meagreness of our understanding is especially remarkable; we have not yet grasped the obvious fact—a fact of immeasurable import for all of the social sciences—that with little exception the wealth and capital possessed by a given generation are not produced by its own toil but are the inherited fruit of dead men's toil—a free gift of the past. We have yet to learn and apply the lesson that not only our material wealth and capital but our science and art and learning and wisdom—all that goes to constitute our civilization—were produced, not by our own labor, but by the time-binding energies of past generations.

Primitive man used natural laws without knowing them or understanding them, but he was able to cause nature to express itself, by finding a way to release nature's stored up energy. Through the work of his brain and its direction in the use of his muscles, he found that some of his appliances were not good; he made better ones, and thus slowly at first, the progress of humanity went on. I will not enlarge [pg 105] upon the history of the evolution of civilization because it is told in many books.

In the earliest times the religious, philosophical, legal and ethical systems had not been invented. The morale at that time was a natural morale. Humans knew that they did not create nature. They did not feel it “proper” to “expropriate the creator” and legalistically appropriate the earth and its treasure for themselves. They felt, in their unsophisticated morale, that being called into existence they had a natural right to exist and to use freely the gifts of nature in the preservation of their life; and that is what they did.

After the death of a man, some of the objects produced by him still survived, such as weapons, fishing or hunting instruments, or the caves adapted for living; a baby had to be nourished for some years by its parents or it would have died. Those facts had important consequences; objects made by someone for some particular use could be used by someone else, even after the death of one or more successive users; again the experiences acquired by one member of a family or a group of people were taught by example or precept to others of the same generation and to the next generation. Such simple facts are the corner stones of our whole civilization and they are the direct result of the human capacity of time-binding.

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The world to-day is full of controversy about wealth, capital, and money, and because humanity, through its peculiar time-binding power, binds this element “time” in an ever larger and larger degree, the controversy becomes more and more acute. Civilization as a process is the process of binding time; progress is made by the fact that each generation adds to the material and spiritual wealth which it inherits. Past achievements—the fruit of bygone time—thus live in the present, are augmented in the present, and transmitted to the future; the process goes on; time, the essential element, is so involved that, though it increases arithmetically, its fruit, civilization, advances geometrically.

But there is another peculiarity in wealth and money: If a wooden or iron “inch” be allowed to rot or rust quietly on some shelf, this “inch” does not represent anything besides this piece of wood or iron. But if we take the mental value of an inch, this unit of one of the measures of space, and use it, with other quantities, in the contemplation of the skies for the solving of an astronomical problem, it gives a prophetic answer that, in a certain place there is a star; this star, may be for years looked for in vain. Was it that the calculation was wrong? No, for after further search with telescopes of greater power, the star is found and the calculation thus verified.

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It is obvious that the “unit”—inch—has no value by itself, but is very precious as a unit for measuring the phenomenon of length, which it perfectly represents, and that is why it was introduced.

It is exactly the same with money if the term be rightly understood. Understood aright, money, being the measure and representative of wealth, is in the main, the measure and the representative of dead men's toil; for, rightly understood, wealth is almost entirely the product of the labor of by-gone generations. This product, we have seen, involves the element of time as the chief factor. And so we discover how money, properly understood, is connected with time—the main function of money is to measure and represent the accumulated products of the labor of past generations. Hoarded money is like an iron “inch” upon a shelf—a useless lump; but when used as a measure and representative of wealth rightly understood, money renders invaluable service, for it then serves to measure and represent the living fruit of dead men's toil.

For this reason, it is useless to argue who is the more important, the capitalist who has legal possession of most of the material fruit of dead men's toil, or the laborer who has legal possession of but little of it. In the laborer, we do not now really look for his physical muscular labor alone; for this is replaced by mechanical or animal power as soon as [pg 108] it can be. What we do need from labor, and what we will always need, is his brain—his time-binding power.

The population of the world may be divided into different classes; if the classes are not here enumerated in the customary way, it is because it is necessary to classify human beings, as nearly as possible according to their “power-value.” There is no assertion that this is an ideal classification, but if someone is moved to exclaim—“what a foolish, unscientific division!”—I will answer by saying: “I grant that the division is foolish and unscientific; but it is the only division which corresponds to facts in life, and it is not the writer's fault. By this ‘foolishness’ some good may be accomplished.”

From an engineer's point of view humanity is apparently to be divided into three classes; (1) the intellectuals; (2) the rich; and (3) the poor. This division would seem to be contrary to all the rules of logic, but it corresponds to facts. Of course some individuals belong to two of the classes or even to all three of them, an after-war product, but essentially, they belong to the one class in proportion to the characteristic which is the most marked in their life; that is, in the sense of social classes—based on magnitude of values.

(1) The intellectuals are the men and women [pg 109] who possess the knowledge produced by the labor of by-gone generations but do not possess the material wealth thus produced. In mastering and using this inheritance of knowledge, they are exercising their time-binding energies and making the labor of the dead live in the present and for the future.

(2) The rich are those who have possession and control of most of the material wealth produced by the toil of bygone generations—wealth that is dead unless animated and transformed by the time-binding labor of the living.

(3) The poor are those who have neither the knowledge possessed by the intellectuals nor the material wealth possessed by the rich and who, moreover, because nearly all their efforts, under present conditions, are limited to the struggle for mere existence, have little or no opportunity to exercise their time-binding capacity.

Let us now try to ascertain the rÔle of the time-binding class of life as a whole. We have by necessity, to go back to the beginning—back to the savage. We have seen what were the conditions of his work and progress; we saw that for each successful achievement he often had to wrestle with a very large number of unsuccessful achievements, and his lifetime being so limited, the total of his successful achievements was very limited, so that he was able to give to his child only a few useful objects and [pg 110] the sum of his experience. Generally speaking, each successor did not start his life at the point where his father started; he started somewhere near where his father left off. His father gave, say, fifty years to discover two truths in nature and succeeded in making two or three simple objects; but the son does not need to give fifty years to discover and create the same achievements, and so he has time to achieve something new. He thus adds his own achievements to those of his father in tools and experience; this is the mathematical equivalent of adding his parent's years of life to his own. His mother's work and experience are of course included—the name father and son being only used representatively.

This stupendous fact is the definitive mark of humanity—the power to roll up continuously the ever-increasing achievements of generation after generation endlessly. We have seen that this time-binding power is an exponential power or function of time. Time flows on, increasing in arithmetical progression, adding generation unto generation; but the results of human energies working in time do not go on arithmetically; they pile up or roll up more and more rapidly, augmenting in accordance with the law of a more and more rapidly increasing geometric progression. The typical term of the progression is PRT where PR denotes the ending progress made in the generation with which we [pg 111] agree to start our reckoning, R denotes the ratio increase, and T denotes the number of generations after the chosen “start.” The quantity, PRT of progress made in the Tth generation contains T as an exponent, and so the quantity, varying as time T passes, is called an exponential function of the time.

Nature is the source of all energy. Plants, the lowest form of life, have a definite rÔle to perform in the economy of nature. Their function is the forming of albuminoids and other substances for higher purposes. All of their nitrates are high-explosives, or low explosives, but explosives anyway. They are powerful sources of some new energy. Animal life uses these “explosives” as food and is correspondingly more dynamic, but in animal life time does not play the rÔle it plays in human life. Animals are limited by death permanently. If animals make any progress from generation to generation, it is so small as to be negligible. A beaver, for example, is a remarkable builder of dams, but he does not progress in the way of inventions or further development. A beaver dam is always a beaver dam.

Finally humanity, the highest known class of life, has time-binding capacity as its characteristic, its discriminant, its peculiar and definitive mark. It is an unrealized fact that in this higher class of [pg 112] life, the law of organic growth develops into the law of energy-growth—the mind—the time-binding energy—an increasing exponential function of time. That fact is of basic importance for the science and art of Human Engineering. In mechanics we have the well-known formula

(1) Work ÷ Time = Power.

We have seen that, in accordance with the law of geometric progression, PRT represents the progress made—the work done—in the Tth generation (T being counted from some generation taken as starting point of reckoning); this progress, achievement, or work, being done in one generation, we have by (1)

(2) ( Work = PRT ) / ( Time = 1) = Power,

that is, PRT = Power; this means that the number PRT, which measures the work done in a given generation, is also the measure of the power that does the work. Now, the total work, W, done in the T generations is

(3) W = PR1 + PR2 + PR3 + ... + PRT;

that is,

(4) W = R ÷ (R-1) × (PRT - P)

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It should be noticed that by (2) this expression for W may also be regarded as the sum of T different powers PR, PR2, etc., each working during one and only one generation; if we divided this sum by T, the quotient would be a power that would have to act through T generations to produce W. The reader should not fail to notice very carefully that the expression (4) for W is an expression for the total progress made—the total work done—the total wealth produced—in the course of T generations and he should especially note how the expression involves the exponential function of time (T), namely PRT.

The formula makes mathematically evident the time-binding capacity characteristic of the human class of life. Properly understood, wealth consists of the fruits or products of this time-binding capacity of man. Animals do not produce wealth; it is produced by Man and only Man. The foregoing basic formulation should lead to further similar developments throwing much light upon the process of civilization and serving to eliminate "private opinion" from the conduct of human affairs. (In this writing it is not important to look deeper into these proposed series. The fact remains that P, as well as R, are peculiarly increasing series of a geometrical character—the precise form will be developed in another writing.)

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Human achievements and progress, because cumulative, are knocking out the barriers of time. This fact is the vital and dynamic difference between animal life and human life. As plants gather in and store up solar energy into sheaves for the use and growth of animal and man—so humans are gathering and binding the knowledge of past centuries into sheaves for the use and development of generations yet unborn.

We have seen that the term wealth, rightly understood, means the fruit of the time-binding work of humanity. Wealth is of two kinds: one is material; the other is knowledge. Both kinds have use-value. The first kind perishes—the commodities composing it deteriorate and become useless. The other is permanent in character; it is imperishable; it may be lost or forgotten but it does not wear out.

The one is limited in time; the other, unlimited in time; the former I call potential use-value; the latter, kinetic use-value. Analysis will justify the names. The energy of a body which is due to its position, is called potential energy. The energy of a body which is due to its motion, is called kinetic energy. Here the material use-value has value through its position, shape and so forth; it is immobile if not used, and has not the capacity to progress. Mental use-values are not static but permanently dynamic; one thought, one discovery, is the impulse [pg 115] to others; they follow the law of an increasing potential function of time. (See app. II.) This is why these names correspond to the two names of the two mentioned classes of energy.

Here I must return to the current conceptions of wealth and capital, before cited. “Wealth,” we are told, “is any useful or agreeable thing which possesses exchangeable value.” And we are told that “Capital is that part of wealth which is devoted to obtaining further wealth.” I have said that such conceptions—such definitions—of wealth and capital are childish—they belong to the period of humanity's childhood. That they are indeed childish conceptions the reader can not fail to see if he will reflect upon them and especially if he will compare them with the scientific conception according to which wealth consists of those things—whether they be material commodities or forms of knowledge and understanding—that have been produced by the time-binding energies of humanity, and according to which nearly all the wealth of the world at any given time is the accumulated fruit of the toil of past generations—the living work of the dead. It seems unnecessary to warn the reader against confusing the “making” of money by hook or crook, by trick or trade, with the creating of wealth, by the product of labor. In calling the old conceptions childish, I do not mean that they contain no element of truth [pg 116] whatever; I mean that they are shallow, scientifically or spiritually meagre, narrow in their vision, wrong in their accent; I especially mean that they are dumb, because they are blind, regarding the central matter that wealth is the natural offspring of Time and Human Toil. The old conceptions do indeed imply that wealth and capital involve both potential and kinetic use-values, and in so far they are right. But how do such use-values arise?

The potential use-values in wealth are created by human work operating in time upon raw material given by nature. The use-values are produced by time-taking transformations of the raw materials; these transformations are wrought by human brain labor and human muscular labor directed by the human brain acting in time. The kinetic use-values of wealth are also created by human toil—mainly by the intellectual labor of observation, experimentation, imagination, deduction and invention, all consuming the precious time of short human lives. It is obvious that in the creation of use-values whether potential or kinetic, the element of time enters as an absolutely essential factor. The fundamental importance of time as a factor in the production of wealth—the fact that wealth and the use-values of wealth are literally the natural offspring of the spiritual union of time with toil—has been completely overlooked, not only by the economics, but by the [pg 117] ethics, the jurisprudence and the other branches of speculative reasoning, throughout the long period of humanity's childhood. In the course of the ages there has indeed been much “talk” about time, but there has been no recognition of the basic significance of time as essential in the conception and in the very constitution of human values.

It is often said that “Time is Money”; the statement is often false; but the proposition that Money is Time is always true. It is always true in the profound sense that Money is the measure and symbol of Wealth—the product of Time and Toil—the crystallization of the time-binding human capacity. it is thus true that money is a very precious thing, the measure and symbol of work—in part the work of the living but, in the main, the living work of the dead.

Nature's laws are supreme; we cannot change them; we can deviate from them for a while, but the end is evil. That is the lesson we must learn from the history of Humanity's childhood. False conceptions of Man—ignorance of the laws of human nature—have given us unscientific economies, unscientific ethics, unscientific law, unscientific politics, unscientific government. These have made human history the history of social cataclysms—insurrections, wars, revolutions—sad tokens not so much of human lust as of human ignorance of the laws of [pg 118] human nature. There is but one remedy, one hope—a science and art of Human Engineering based upon the just conception of humanity as the time-binding class of life and conforming to the laws of nature including the laws of human nature.

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