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Uninstructed persons, of insubordinate or truculent tempers, often pride themselves upon what they style their independence, meaning thereby their readiness to quarrel or argue with employers, and thereby to bring on themselves discharge from employment.

They should understand that there is no baseness in the sort of obedience, which is called for and paid for as the essence of the wages contract, for the reason that only in this way can industry be steered in the direction of demand, which is the function which employers subserve in industry.

The employer's business is to seek and yield to the public demand. His phrase to his workmen is, "I must please the public; you must please me." It is through the subserviency of the employer to the public, followed up by the subserviency of each employé to his or her own employer, that the entire force of employés may be held to the work of satisfying a public want. This is organization in industry. It is the only practicable way in which men and women ordinarily can render those services to their fellow-men sufficient to call for that return service at the hands of others known as "a comfortable living."

For, as a rule, each person in business gains his living by the service he renders to strangers in the economic sense, i. e., to persons to whom he is under no obligations, and very likely does not know, and who, in turn, do not know him. The engineer on a railway really serves the passengers and the owners of the freight which are entrusted to be drawn by his engine. Both these classes are strangers to him. The medium of enabling him to serve these strangers is his wage contract with the railroad company, which, in this case, is the middleman effecting an exchange of the engineer's time and that of others, working together in the use of the stockholders' capital, i. e., the rolling stock, in order to sell, to the freight owners and passengers, a joint product of capital and labor, viz., transportation. But on analysis it is not really capital and labor that effect the transportation, but it is command and obedience. For, no matter how much capital is put up, if commands are not obeyed, the railway is converted instantly from a means of transportation into a mere means of wholesale slaughter. The labor of transportation in this case, i.e., the physical force which draws the train, is not put forth by the engineer but wholly by his engine. The supervision of the engineer is directed wholly to making the engine obey the time-table. This may be called labor on his part; but it may be

merely a labor of watching-the end of which is obedience, pure and simple, but the alternative of which is destruction, sudden and terrific. The organization of labor in society, therefore, is effected by means of a system of subserviency and obedience, whereby every industrial act, every sale of a service or a commodity, and every performance of a service, or a contract, is part in a chain of causation of which the supply of all is the ultimate effect, and the demand of all is the primary moving power and stimulus. The steering and piloting is all done to make profits. The manual and methodized labor is all done to earn wages. But these terms are, in the final analysis, interchangeable. Wages are always the profits a man wins, by investing his time and selling his will, judgment, and obedience, in the manner which he draws his wages for, rather than any other. And profits are the wages a man gets for risking his means in a given investment, and abstaining from enjoying the principal while it is so invested. Hence there is an ultimate sense in which wages are profits and profits are wages. Just as we have seen in Chapter I., there is an ultimate sense in which capital performs labor, or labor is capital. 71. Do the Indispensable Means of Labor Earn a Share of the Product ?—While Karl Marx nowhere presents any facts showing what the ratio of the wages share to the capital share really is, he constantly assumes that it is equal.* But by assuming also that the wage laborer is the sole producer of value, that the capitalist's contribution of the means of work is in no way necessary, and should not be permitted to reap any return, since these means are themselves the result of previous robbery and not of saving; and that the wages paid are in all cases only the cost of sustenance of the laborer, with just enough added to enable him to propagate his class without increase or diminution; that mere exchanges of commodities do not create values, hence that the functions of the capitalist, enterpriser, and trader are all needless, Karl Marx is able, through the necromancy of bald assumption, to convert a division between two equal partners, in the ratio in which they contribute to production, into a spoliation or "exploitation " of labor,+ by capital, to the ex

* " Kapital," vol, i., page 175.

+ The choice of the word "exploitation" by the socialists is particularly happy, since it is in fact truthful when accurately understood. Exploitation does not mean "spoliation," but simply creating or causing exploits or achievements where otherwise there would be inaction. It implies that capital energizes labor, but this implication is ignored. Its perversion into a term signifying robbery is part of the general system of "exploitation " of economic terms carried on by socialist writers.

ALL CAPITAL A LOAN TO LABOR.

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tent of 100 per cent. on what labor produces. He constantly styles the cost of the sustenance of the laborer his natural wages, under the iron law of Ricardo and Torrens, and assumes that he gets no more, ignoring the fact that most capitalists start in life as wage laborers, and begin their capitals through the savings from their wages. All the value commodities have, at any time, over the cost of sustenance of the labor which produces them, he denominates "surplus value," exploitation, or robbery. Thus that form of economic "criticism" which begins by assuming that lack of the means to work with, which is what we call labor-power, creates all values, speedily ends in that form of war on society and industry known as Anarchism or Thuggism.

The first truth to be embraced by one who would really comprehend the plexus, or interlocking of labor with capital, in the present organization of industry, is that all reproductive capital-the machinery with which the profit-maker works, is in use by the workers themselves, and is their means of earning wages.

In his "Chapters on Socialism," Mr. Mill, who was himself in many senses an avowed socialist, says:

"Another point on which there is much misapprehension on the part of socialists, as well as of trades unionists and other partisans of labor against capital, relates to the proportion in which the produce of the country is really shared, and the amount of what is actually diverted from those who produce it—”

Mr. Mill here falls into the very socialistic error which he is attempting to rebuke, by assuming that all that wage laborers do not get is so much "diverted from those who produce it "— -"to enrich other persons. When, for instance, a capitalist invests £20,000 in his business, and draws from it an income of, suppose, £2,000 a year, the common impres sion is, as if he were the beneficial owner both of the £20,000 and of the £2,000, while the laborers own nothing but their wages. The truth, however, is that he only obtains the £2,000, on the condition of applying no part of the £20,000 to his own use."

And of loaning its use in some form to labor, i. e., to relative destitution

He has the legal control over it, and might squander it if he chose; but if he did he would not have the £2,000 a year also. For all personal purposes, they have the capital, and he has the profits, which it only yields to him on condition that the capital itself is employed in satisfying, not his own wants, but those of laborers.

A truer statement would be that the capitalist has the power to steer industry in the direction of what he deems to be the profit, which is always that of the effective social demand. For this power he takes the profits, and incurs the losses, incident to the employment of reproductive capital. Operative workers have

the loan of his capital for their use, as the condition, or means, or partnership by aid of which they can produce, and without the aid of which they would loaf in idleness. And the customers of the business or purchasers of the product of their joint labors, who are nearly equivalent to society at large, have its services, as they do those of labor, by paying for its product.

72. Does the Risk of Loss Give Valid Title to the Profit ?-Many socialists concede that, in the present organization of labor, the rule of the profit-maker over the wages-earner is temporarily just, so long as it is made necessary, by the lack of ownership, by the wage-earner, of the job, implements, means of subsistence and capital, from which to make up to the wageearners and to others, the ultimate loss of wealth which will result to society if industry is steered toward the production of unprofitable products.

But they desire us to believe that it is not intrinsically and economically just, and will not be perpetual. In short, they hold, with Mr. Mill, that "it rests upon the arbitrary institutions and customs of men, and not on irreversible economic law."

If it be possible for society to evolve into such a condition that all men will own their own jobs, implements, means of subsistence, and capital, from which to make up losses, the social problem would have been solved by the elimination of the wages class, and by the fact that none but capitalists would remain. But the prediction of such a state of things falls within the domain of prophecy, presumption, or quackery-of the first if true, of the second if undemonstrable, and of the third if false. Economists can only say that in the kind of world we live in, the reign of the enterprisers and profit-makers over the wage earners must continue, so long as any class of men need to work in order to live, and have not the means to work with.

Henry George declares that creation alone gives title. We accept this definition for the profit-maker's title to his profits. When ten thousand men lie idle, who would gladly do their share toward building a railway, if some profit-maker will but come and incur the risk of loss implied in the furnishing the means with which to build the road, but who are powerless and starving because he does not come, can it be said that it is this inertia of destitution that alone builds the road? The profit-maker comes. Instantly they spring to their feet and commence building. Why? Because they have sold themselves, their muscles and their time, to him for a day. What for? So that he might out of their

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idleness create labor-out of their incoherence create co-operation -out of their babel create unity-out of their destitution and incapacity create wealth. He does create all these, buys them by buying the laborer's time, and the right to command his obedient will. Having created them, shall he not own what he has created? If so, then, for the purposes of the day's work, he is owner, and the laborer is implement. He is Mind, Force, Energy, and the laborer is cart-horse and harrow, mere clay in the hands of the potter. How, then, shall the clay say to the potter, "I am the producer?" The universal conscience of man, and even the very definitions laid down by socialists, alike agree that when the profit-maker, by incurring a risk of loss, where others will not, leads forward the industrial host into enterprises in which others dare not, and so creates labor itself where others would let it rust, and the result proves that he has met and satisfied a social demand which others did not see, he shall have a valid title to the profit because he created it, as well as a valid command over the labor which he evokes, because he creates that also.

The moral and legal right of the profit-maker is to rule industry, subject to its power to rule him. By this we mean it is his right to select the kind of work on which he shall enter or continue solely with reference to whether he sees a profit in it, and to refuse or stop when he sees no profit, to prescribe the hours on which he will consent to run his industry, subject, of course, to such opposing forces as society may bring to bear. It is his right to get all the effective service out of his working force which he is willing to buy and pay for, as it will naturally devolve on his working force to get all the wages out of him which they can make the services rendered bear. If he exploits their labor, so do they exploit his capital. But he becomes one power, and their aggregate becomes another, in an equal contest. Each unit of capital, or sum necessary to employ a man, acquires an equality in exchange as against that man. Its indispensability in production is worth as much as his. Its capacity to earn equals his. Its capacity to bless or curse mankind, to do good or harm, equals his, because, if he declines to labor on its terms, it can usually find one who will. What the laborer produces, therefore, by laboring, is not the commodity which figures as the joint product of labor and capital. A laborer is the sole producer, only, of a diversion to himself of wages which would otherwise go to another laborer. In himself alone, he is exactly as productive as any other commod