Correspondence: Who gets the profit?
To the Editor
If the world is owned by a comparative few it means that the few can demand payment of all others, including all future generations, to live on it—and that is precisely what is happening. If, however, you remove from the few the power to demand this toll, then you will remove their power to enslave those who have had to pay the toll. Now the value which is put on any of the natural resources is it communal value and if you transfer that value from the landowner to mankind as a whole you will have done all that is necessary and you will have done it mathematically; for no landowner would be able to hold land out of use and the earth’s resources would be open to all. A tax on land equivalent to its value would achieve this end since no landowner could keep land idle and pay the tax. He would have to work it himself to get the wherewithal to pay the tax or, if he could not do that himself, he would have to relinquish its ownership and allow someone else to do so. In either case the monopoly privilege would not exist.
In the past, millions of minds have been prevented from seeing this truth because of the misuse of words. Here are some examples:
The word “employer” is a misused term and it has led to much confusion. Everyone who works is fundamentally an employer. Every time you buy something you are employing someone to get what you want. When you ask your grocer to get you some eggs, you are his employer, you pay him for doing it. If the grocer in turn employs a boy to deliver the eggs to you, he employs the boy and pays him. From the point of view of actually working, there is no difference between you and the grocer; you are both employers. The haggling between you and the grocer as to the price of the eggs is no different from the haggling between the grocer and the boy as to the rate of wages. We could carry this further and show that every child who buys a lolly-pop with the 2d. he received from someone for running a message is an employer of labour and it would be quite logical.
The word “profits” is also a term which has led to much contusion.
The three factors in production are:
(1) Land,
(2) Labour and
(3) Capital.
The distribution of the products of these factors is between:
(1) the Landowner,
(2) the worker and
(3) the Capitalist.
Here is my question to you: Which of these three gets the profit? Is it not the landowner whose rent must be paid otherwise production cannot commence’: Neither labour nor capital can be employed without the permission of the landowner. The amount of current production that goes first to the landowner determines what will be left for the worker and the capitalist. The agreed amount of interest which has to be paid for the loan of capital determines what goes to labour. If Rent, as a whole, goes up at some future time then relativelywages go down.
The word “Capital” (and “Capitalist”) is a word which leads to confusion. Capital, logically, does not include land and, therefore, the Capitalist should not be blamed for the sins committed by the landowner. A Capitalist is one who lends his capital to someone who wants to borrow it. That someone gains by the loan of the capital otherwise he would not borrow it. The difference between a landowner and a capitalist is very significant. The landowner does not produce the land which he lends, it is a natural factor, but the capitalist docs produce his capital. A worker who produces vegetables may either eat them or exchange them, say, for bread. If he consumes the vegetables then he consumes wealth, the final product, but if he exchanges them for bread or for an amount of money agreed upon to be paid at some future date his vegetables are his capital and he is a capitalist, but I see nothing wrong in that.
You will notice that I distinguish between land, capital and wealth: Land is a primary factor, so is labour. Capital is a product used as a secondary factor and wealth is the end product which is finally consumed. The object of all production (not to be confused with destruction) is wealth, and all wealth depends ultimately on free access to the Earth’s natural resources.
An individual may be simply a worker, a capitalist, or a landowner; or, he may be a combination of two or three of these. This fact, however, does not invalidate the arguments above concerning the production and the distribution of wealth.
W. HARTLEY BOLTON, Dorchester
REPLY
Mr. Hartley Bolton is aware of the great power and privilege which class ownership of the means of wealth production confers upon the owning class. Why, then. is he content to only levy tax upon land values? If minority ownership of land is such a social evil, why not abolish it altogether? Contrary to our correspondent’s view, landowners would be quite prepared to keep their land idle and pay tax upon it, if the economic conditions of capitalism -made it more profitable to do so. This sort of social idiocy is quite common under capitalism.
Mr. Hartley Bolton does not say how the land would be assessed for the purpose of the tax. Would it be the current market value? Would land in the centre of London be taxed more heavily than that in mid-Wales? These are the sort of problems which the administrators of capitalism are always getting themselves involved in. Such schemes must leave the basis of capitalist society intact, which means that they must also leave capitalism’s problems intact.
The land is by no means the only means of wealth production. The others—factories, mines and so on—also have a communal value insofar as they are the result of socially applied human labour power. At present, the capitalist class own the means of wealth production and because of this they can hold the rest of society to a sort of ransom. We are allowed to work for our living, for example, only if it pays our employer to do so.
The word ’employer’ denotes the existence of a social relationship which does not exist between a shopkeeper and his customer. The customer cannot sack the grocer, because he does not own the grocery shop. But an employer can lay off his workers if he wants to, because he does own the place where they work. An employer pays his employees wages, which are the price of their labour power and nothing else. When a customer buys eggs the money which he pays is the price of the eggs and nothing else. The two transactions give rise to two entirely different social relationships.
The products of capitalist society are not divided between land, labour and capital. The worker’s wage is paid to him before the goods which he has produced are sold, sometimes even before they are made. It is, therefore, impossible for him to take part in the distribution of his product. What actually happens is that the working class produce a surplus for their masters, from which the capitalist pays off any rent or interest to which he is liable, keeping the rest for himself as his profit.
Working class wages are determined in the long run by the value of their labour power—that is, by the amount of wealth which is needed to reproduce them as workers. The wage is agreed before production takes place; it therefore has nothing to do with the amount of interest which the capitalist must pay or the rent which he owes.
Mr. Hartley Bolton says, “Capital, logically, does not include land . . .” but he does not define capital and tell us what it does include. In fact, capital is wealth which is used to produce more wealth with a view to profit. If a capitalist is “. . . one who lends his capital . . .” then how do we describe the person who borrows it? A capitalist is in fact somebody who owns enough of the world’s means of wealth production—including land—to enable him to live without having to work for a wage.
The capitalist no more produces his capital than the landowner does his land. The land has no price except when human labour power is present to work upon it. Similarly, capital is accumulated human labour—it is the result of the accumulated exploitation of the working class. Capital is a secondary factor in production in so far as it is expendable, for the only necessities for production are natural materials and human working ability.
Finally, it is impossible for a person to be both worker and capitalist at the same time, except perhaps for a few freak borderline cases. For workers and capitalists hold opposite stations and have interests which are diametrically opposed. This is the basic social division in capitalism; it is one of the reasons why capitalism must be abolished if we are to solve our problems.
EDITORIAL COMMITTEE.