According to the author of "Progress and Poverty" political economists
have been deluded by a "fallacy which has entangled some of the most
acute minds in a web of their own spinning."
"It is in the use of the term capital in two senses. In the primary
proposition that capital is necessary to the exertion of productive
labour, the term "capital" is understood as including all food,
clothing, shelter, &c.; whereas in the deductions finally drawn from
it, the term is used in its common and legitimate meaning of wealth
devoted, not to the immediate gratification of desire, but to the
procurement of more wealth--of wealth in the hands of employers as
distinguished from labourers" (p. 40).
[182] I am by no means concerned to defend the political economists who
are thus charged with blundering; but I shall be surprised to learn
that any have carried the art of self-entanglement to the degree of
perfection exhibited by this passage. Who has ever imagined that
wealth which, in the hands of an employer, is capital, ceases to be
capital if it is in the hands of a labourer? Suppose a workman to be
paid thirty shillings on Saturday evening for six days' labour, that
thirty shillings comes out of the employer's capital, and receives the
name of "wages" simply because it is exchanged for labour.
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