1920s >> 1927 >> no-278-october-1927

What capitalism means

Sir,—-I am taking keen interest in economics and would like to know the exact relation of things and definition concerning what capital means.

I listen to all parties and read all literature of all parties.

G. Peace, a speaker for the “Commonwealth Party,” speaking in Hanley, said that last year he visited the outcrops in Hanley and saw men working using their own capital, which proved the worker will do without bosses when all the workers followed the example of the men out-cropping.

Now I wish to know if the tools such as unscientific things as old wheels of bicycles, etc., ropes and buckets to draw the coal up from the outcrop comes under the true definition of capital. Seeing that your definition of capital is the means of exploitation or legalised robbery of the workers.

There is another point perhaps you will be good enough to correct me on. Mr. G. Peace also said during his discourse on the outcroppers that he was amazed to learn the outcroppers were charged five shillings for every ton of coal carted away by the owners of the land.

To me, the economic renters, like Mr. G. Peace, under their single tax or economic scheme, would be somewhat similar, but the only difference would be the State officials, would collect the economic rent instead of private or group Capitalist officials; just assuming that we would gain access to the land in the manner the outcroppers did, this would not bring economic security to all, for there would be disorder instead of proper organisation. Plenty of outcroppers would not find a market for their coal and would be forced to leave their outcrops. So it appears to me competition for markets will be in existence under Capitalism, under economic rent, nationalisation, etc.

Of course, I ask for correction on the points raised.

Thanking your in anticipation, Yours sincerely.


Capital is wealth used for the purpose of obtaining a profit. The owner of this wealth —the Capitalist—purchases buildings, plant, machinery, raw materials, etc. Then he purchases labour-power to use the plant and machinery on the raw materials for the purpose of producing commedities, or article for sale. The value of the raw materials and of the portion of the plant and machinery, used up in a given time, form part of the value of the commodities, and pass over unchanged into the latter value.

The value of the labour-power can be represented at any given period by a particular number of hours’ work. If the labourer only worked this particular number of hours each day there would be no surplus produced as the value of the commodities would be equal to the sum of the values of (1) the raw materials used; (2) the portion of plant and machinery worn out; and (3) the labour-power expended. But, by using the whip of hunger, the Capitalist compels the labourer to work for a longer number of hours than is necessary to replace the value of his labour-power. In these extra hours of work is produced the surplus-value which is afterwards split up into various parts. One part may be used to extend the business. Another part may be absorbed in advertising the goods for sale. Still another part may go to pay rates and taxes. The part remaining to the Capitalist after these distributions forms his profit. Surplus-value is thus seen to consist of the products taken by the Capitalist that the labourer has produced in the time during which he works, but for which he has not been paid. In other words, surplus value is based upon the robbery of the worker. Profit is a part of the results of this robbery.

This explanation makes it quite clear that an individual only obtains profit when he robs some worker, or workers. Whatever tools or plant a man employs in working for himself obviously cannot be capital, as he does not obtain a profit because he does not rob anyone. Only when he uses these tools and plant to rob some worker or workers of the values they have produced, do they become capital and he a Capitalist. The fact that the appliances may be out of date or unscientific, does not prevent them becoming capital in the above circumstances —though it certainly places the Capitalist using them at a disadvantage in competition with other Capitalists who are better equipped.

Mr. Peace’s statements are therefore quite inaccurate. The “outcroppers” were not using capital at all. Their few crude appliances were not used to rob anyone, and therefore, in those conditions, could not be capital. Moreover, if the “outcroppers” had to pay five shillings a ton for the coal obtained the landowners were certainly “bosses” of the situation, and so contradicted Mr. Pearce’s other statement that “the outcroppers were doing without in bosses.”

“Inquirer” is quite correct when he says that under the single tax theory the economic rent would go into the Government coffers instead of into those of private or group Capitalists. This would leave the workers just as they are to-day, slaves to the master class, and robbed of the larger portion of the wealth they produce. Only Socialism can end this slavery.

Ed. Com.

(Socialist Standard, October 1927)

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