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values he creates than any other worker in the whole wide world. This is why the American section of the capitalist class is the richest in the world. So rich that it now wants to annex the rest of the world to exploit the workers in the other countries. If a war comes between America and Japan, it will not be over Japanese in California, but over Japanese investments in China, Korea, or Siberia, or wherever else they come into conflict with the investments of American capitalists.

The idea that our capitalists among themselves, or in a contest with foreign capitalists, make profit is a delusion. Only out of wage labor can profit be made.

Suppose that five persons sit into a poker game with $10,000 apiece. At the end of a night's play one man has “cleaned up” the other four. Four men are broke and one has $50,000, but there is not $1 more than there was at the beginning of the game. Now, had these players been a night force at work in some industry, at the end of the shift there would be more wealth than at its beginning and consequently more profit. Whether the capitalist dissipates, loses in business deals, or invests his surplus as new capital is not the point—it is that profit has its only source in surplus value wrung from wage labor—surplus value is the modern source of new capital.

When the Amalgamated Copper Co. was promoted there was a story to the effect that $36,000,000 profits were made over night. What happened was that those who financed the deal believed that the holdings offered a good prospect for paying more than the current rate of profit upon their investment—the copper properties would enable them to exploit the wage workers to the amount of that capitalization. That $36,000,000 was not profit; it was part of the price paid for the privilege of exploiting the slaves in the holdings which were purchased. Dan Ryan, Con Kelly and their tribe have since been driving to make good on that judgment and have provoked two costly rebellions in the process.

What Capital Is Capital is wealth in any form used for the exploitation of wage labor, and, is itself, derived from the exploitation of the labor it employs. Capital—surplus value, more capital, more surplus value and so on. “A vicious circle of exploitation that leaves the workers ever weaker and more and more helpless.


1. From what source is new capital derived ? 2. What relation has the relative wage to new capital? 3. Explain how the nominal and real wages can rise

while the relative wages declines at the same time. 4. What relation has increased productiveness to the

situation of the wage workers? 5. Explain question 4 by citing a farm worker, or some

other laborer. 6. If the worker received $3 per day in 1914 and is

now receiving $4, has his wage risen? Why? 7. What relation does the wage of the American work

er bear to that of the workers of other countries.

(a) nominal, (b) real, and (c) relative? 8. What has new capital to do with the foreign policy

of the government? 9. Do capitalists make profit out of each other? Why

not? 10. What would be the result to the workers if the

source of new capital—surplus value-was lessened?


The Market Law


"HERE is a widespread belief that so-called mono

polies can and do raise the prices of their commodi_ties at will; that John D. Rockefeller, for instance, recoups himself for some of his charitable outlays by raising the price of kerosene or gasoline. If we stop to think about it, John D. might just as well defer making the donation until he had first collected the toll which he is alleged to have power to levy. As a matter of fact there need necessarily be no more connection between Rockefeller's philanthropy and a raise in the price of Standard Oil products than a striking coincidence.

Panics Admittedly, John D. has great power, very much too great, but his power is not great enough to set aside the laws of the market. While Standard Oil is striving to become, it is yet far from being an absolute and complete monopoly; nor is there yet a monopolized condition in anything. The extent to which vast combinations of capital, like the Standard Oil, have been formed, results not from bucking, or trying to buck the laws of the market, but from strictly observing its laws and being governed by them.

When it is assumed or asserted that the will of the corporations is superior to and disregardful of the laws of the market, so that it can and does dictate the prices of commodities, there is no ground upon which to base the assumption or assertion. These corporations, like all others who enter the market, do not dictate to the market but are dictated to by the market. They are the logical fruit of capitalist experience in the market, built up to accord with its laws and not in defiance of them.

In the early days of the capitalist system, when unrestricted competition was the rule and before the necessity for gauging the capacity of the market was understood or the means for doing so had yet been developed, each individual manufacturing concern was impelled by an ambition to secure for itself as large a slice of the market as possible. Each manufacturer went ahead with production without regard to the others in the same line, who did likewise —all impelled by the same motive. The inevitable result was that the market became so congested, periodically, that these manufacturers were compelled to slow down production or to shut down their plants entirely.

Many of them were unable to wait until the market had again become normal and could absorb their products. They were pressed by their individual and immediate needs, for they were operating on a very narrow margin of capital, while, indeed, some of them had no margin whatever and were compelled to realize upon their production, even though it meant great sacrifice to do so. "Necessity knows no law," not even market laws. So, in the ensuing competition to raise sorely needed revenue, values and surplus values were lost sight of and commodity prices were lowered even far below the actual cost of production to the capitalists. These were truly times of "sacrifice sales.” Many of the capitalists were bankrupted and dropped into the ranks of the wage earners.

The Lesson Each of these periods furnished an object lesson to the surviving capitalists. They learned that competition was not the life of capitalist trade but a dangerous deathdealing condition which it were well to remedy. These experiences were not lost upon them and they proceeded to eliminate competition among themselves to as great an extent as possible. We find that following these periods, there was reorganization and rearrangement which enabled the newer and stronger forms of capitalist property to better withstand the adversities due to the recurring periods when the market is congested, which will be so long as surplus value is wrung from the labor of the wage-working class. Moreover, these more capable forms were able to win advantage from the difficulties of the weaker capitalists during panicky times.

As these property forms grew in scope and magnitude they found it advisable to divide their system of management. Departmental spheres were instituted which conducted necessarily closely-related processes, and, among others, one was organized whose function is to survey the world's commercial outlook and to collect such data as will serve to guide the enterprise so that the supply of the commodities in which it deals will always approximate the demand for them. It is an attempt to balance supply and demand in the market.

This move on the part of the larger capitalists pointed the way to the rest of the capitalists, and, as it was too expensive a proposition for most of them to undertake individually, they commandeered their national organ, the government, and the United States consular service: was brought into existence.

Consular Service Aid Through the consular service of the government our manufacturers are supplied with information as to where in the world this, that or the other commodity is needed and about how much. They are also made aware what the capitalists of other countries are doing in relation to outside and home markets, and consequently they are in a much more favorable position to participate in world trade than were the capitalists of an earlier day. The manufacturers of today are better equipped to estimate the capacity of the market and to regulate supply to approximate demand. This enables them to sell their commodities at their real value or near it.

If the will of Standard Oil, or any other capitalist concern, could override the laws of the market, the market would, automatically, be destroyed—there would be no market. The condition for a revolution would be, by that very fact, established. There would be no other way out, for there would exist a power whose will was subject to no check or restraint. The autocracy to which capitalist ambition aspires would then be already realized. That not only is not so, but is destined never to be so. There is the social law whose decrees mutable which will operate to prevent this consummation.

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