the shape of goods, is held in abhorrence by all social neologians, from Plato downwards to the democratic socialists of our own day.

Again, all commodities are either means of enjoyment ready made for use, or they are instruments of production, goods representing capital. To the latter belong machinery, factory buildings, or raw stuffs, half-manufactured goods, etc. Now as to their origin all these undoubtedly may be regarded as the results of labour; e.g., wood used for building purposes is first hewn down, that is it is rendered useful by labour. Hence all capital commodities (by which is meant capital in money as well as everything which possesses value, as machinery, etc.) are called by Marx and Lassalle "congealed," "previous," or "accumulated" labour. There may be a long chain of various transmutations in these forms of capital, in order to the ultimate production of any given commodity. For example, no less than two hundred branches of industry are engaged in turn in the manufacture of one single watch, and capital enterprise has been engaged in each of these branches, and in each successive case more labour has been accumulated. And so the final product in the shape of a watch may be regarded as so much "time of labour coagulated." Hence the socialist's doctrine, that the very instrument employed by the capitalist for the production of commodities, his money, and his buildings, his machinery, and his establishment generally, are only the result of so much labour. They call capital the child of labour, which subjects first, and then domineers over, its own progenitor. But it may be remarked, in passing, that the business of the enterprising capitalist consists in directing the efforts of labour into the right channel, and at his own personal risk to produce, by means of different successive industrial applications of

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labour and skill, the commodities required, and also to provide the necessary machinery and prepay the human labour engaged in such production. If by means of a new machine a factory girl can produce 600,000 needles a day, of course this can only be done on the supposition that she works. It is also true that the appliances or previous forms of capital represented by machinery, steel wire, etc., are the results of labour. But it is also to be remembered that unless some capital had been previously sunk to prepay former labour, to place machines, steel, etc., at the disposal of the manufacturer in the last instance, at the right time, and in the right place, these 600,000 needles could not be produced at all. Organizing capital is absolutely necessary in order to an efficient division of labour, and has an important function to perform in the production of commodities on a large scale. But, apart from this, the view of capital property as "coagulated work" is onesided. There is a prospective as well as this retrospective view. When looking away from its origin to its ultimate object, it becomes the very foundation and starting point of future labour in the most effective manner. Thus, without the aid of private capital to begin with, the ultimate astounding production of the 600,000 needles in one day by one female labourer could not be accomplished, and the capitalist deserves his reward as a premium on his enterprise and risk. Thus capital, as the derivation of the word (from caput) implies, becomes the starting point of production, and all those subsequent metamorphoses of trade, from which result at last articles for use.

There is circulating capital, such as raw material and half fabricated goods, which after completing a circle of technical metamorphoses and "circulating" through

PRODUCTION AND CONSUMPTION.

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various stages of mercantile enterprise, appear at last in the shape of goods for the market. Thus iron ore is transformed into raw iron, raw iron again into steel, that into cutlery. In every one of these stages there is additional consumption of labour, substances, and fuel, as also the use of implements, buildings, and other means for the aid and protection of labour. Floating (or circulating) capital is the stream which has labour for its source, and labour for its tributaries, and which discharges its accumulated treasures into the ocean of wealth.

The

There is also fixed capital, which is the constant source of uses repeated over and over again, by which at last it becomes exhausted. Machinery, implements, chemical apparatus, premises, railroads, canals, etc., etc., are of this nature. They too are the result of labour. But they are stationary, or fixed capital commodities. wear and tear of these must be made good in the price of the articles which they are instrumental in producing. Circulating or floating capital (including money) is therefore essentially industrial capital, and fixed capital is the money invested at the beginning, in starting the industrial enterprise. It was necessary to point out this distinction, because fixed capital in its mechanical form, by the introduction of machinery, is chiefly attacked by socialists, because, it is said, it reduces the fund out of which the wages of the labourer are paid. Other important questions depending on this distinction will be considered presently. It will be shown, too, that all commodities are the outcome of nature as well as labour.

We now have to describe the two great stages in the economic process-production and consumption; the bringing forth, and the using up, of all commodities;

to bring into one point of view both processes which complete the circle of economic life. Production is the reducing of inner life-vigour into the external instruments of life, which again, transformed by labour from objects of nature into objects of use or means, are “introduced" to the circle of human industry. Consumption, on the other hand, which receives back again the use of outer means into personal life, and, in the most exact sense of the word, is a "taking into itself" (consumere), consists in a reducing of external life-vigour into personal life, a transformation of the product into personal existence. This is a constantly recurring process of economic life. Issuing from labour, condensed in capital, and so transformed by enterprise into articles of consumption, the life-force expended in the first effort flows back in consumption as an aliment of the personal life, and if the process is a healthy one will contribute towards the heightened enjoyment of life. And here an objection is lodged on the part of socialism which deserves our attention. It is objected that the defenders of our present social system are satisfied when they have proved that enterprising capital is the cause of a heightened productiveness, whereas they pass over the fact that this progress in the production of wealth does not benefit in just proportions all who have a share in the economic process. Individuals, i.e. the capitalists, become enriched, but the wages labourer is more and more impoverished. In consequence of a wrong distribution of the wealth produced in the community, the stream of consumption does not flow back into the proper channel, the original source of production. Moreover, it is asserted that never was the inequality between expenditure of life-force of the labourer and his re-receiving of life-force by consumption, greater than now.

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THE HIGHEST GOOD," HOW ATTAINABLE.

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Thus in our modern social conditions some appropriate to themselves the life portion of others; some, in short, are wasting away the life of others.

We must now in conclusion state the formula which expresses the great principle of political economy respecting production and consumption. As a mere postulate of reason it runs thus: With the least expenditure of life (whether in actual or previous labour in the form of accumulated capital) produce the greatest possible amount of economic commodities which are the sustenance of life; and with the least waste of the acquired means for sustaining life procure the highest possible development in the personal life by consumption. Or still more briefly: With the least expenditure of life acquire the greatest possible amount of life, or vital existence. This way of stating the principle distinguishes the true economý from the mere technical process of production and consumption. He who can furnish an article of apparel, say in ten days, which might be made in five, is a producer in a technical, but not in the economic, sense of the term. Again, he who pays ten shillings for a quantity of fuel which might be purchased at five is technically a consumer, but not so economically. This is of importance, and has a moral bearing on the affairs of For the higher development of our race depends in great measure on the due observance of the abovementioned principle; and obedience to the maxims of political economy in saving expenditure, and producing wealth, whether in production or consumption alone, promises to realize the moralist's aspiration concerning the attainment of the "highest good," or the theologian's promise of the extension of the "kingdom of heaven here on earth." For only if those laws are rigorously obeyed can we hope that our planet will ultimately be

man.

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