declining that the laborer is rising, as compared with the capitalist, with constantly increasing facility for becoming himself a capitalist and that the MAN is becoming more and more developed. The proportion charged, as interest, in purely agricultural countries, is always high-money, there, tending always outwards. The few who can command the services of this most powerful instrument the one whose possession enables its owner to select at will from among the commodities in market will not part with that power, except in consideration of having it returned with large increase. The trader, too, must have large profits -being compelled to forego the high interest he might receive from lending out his money; even when not, himself, compelled to pay such interest. Large, however, as are the proportions, the quantities received are very small-the capital to be lent being trivial in amount, and the quantity of commodities that can be sold, being very small indeed. With the increase of population and wealth, the proportion declines interest falling to five or six per cent. ; but the trader finds his business so much increased, that, whereas, he could scarcely live when he had fifty per cent., he now grows rich upon ten per cent.; while his neighbor, transacting business on a larger scale, accumulates a fortune by means of charges not exceeding one per cent.-all thus obtaining a constantly increasing quantity, by means of the retention of a constantly diminishing proportion of the property passing through their hands. So, too, in manufactures. The lonely weaver, with his single loom, must have half the product of his labor, or he could not live. With the growth of wealth, and the increased facility of combination, thousands of looms are brought together, to be driven by the force of steam-labor being thus rendered so much more productive, that a tenth, or even a twentieth part gives large return for the capital so employed. The canoe carrying but little, the man who manages it must have a large proportion for his labor. The ship carrying many thousands of barrels, the power of association is here strongly exhibited, in the facility with which a dozen men are enabled to do the work that would have required thousands obliged to use canoes the necessary consequence being, that the owner of a ship is better paid with a twentieth of the cargo, than would have been the owners of the canoes, had they retained the whole of the commodities they carried. Railroad owners grow rich on one per cent. of the commodities carried; whereas the wagoner barely lives on ten per cent. The owner of the machines first used for pounding grain, required to retain a large proportion of the produce of his labor; whereas the owner of the great flour-mill grows rich on portions that would be wasted, were it not for the facility with which production and consumption follow each other at that period of society when mills like his are needed. The more rapid the circulation, the smaller must always be the capitalist's proportion - the greater being then the tendency towards diminution in the cost of reproducing the machinery in which his capital is invested. The larger, however, must then be his quantity labor becoming daily more productive, with constant diminution in the cost of the finished commodities he needs. § 5. The closer the approximation of the prices of raw materials and finished commodities, the smaller, necessarily, becomes the proportion of labor's products demandable in the form of profits, interests, freights, or rents, as will be clear to the reader on a further examination of the diagram here re-introduced. On the left, the trader's proportion is large. The quantity of profit is, however, so small, that few can live by trade. Although the rate of interest would be cent. per cent., at least, no capitalist would think of making investments there. Freight absorbs so large a proportion of the profits, that the laborer is the trader's slave, and land is wholly valueless. The rent that there would be demanded for a spot of ground that had been prepared for cultivation, and upon which a man could securely labor, would be such as to absorb nearly all the produce. Profits, interests, freights, and rents, would all be large in proportion, but utterly insignificant in amount. Passing thence eastward, and arriving on the plains of Kansas, we find the trader receiving more in quantity, though greatly less in proportion to the business transacted. Forty, fifty, or sixty per cent. per annum, being there a common rate of interest, the man who builds a house, or store, expects his rent to be nearly in that proportion. Land and labor have acquired value, as compared with the region further west, while finished commodities have become cheaper - leaving a smaller proportion of labor's products, to be absorbed by the man who stands between the producer and the consumer. At each step further east, the proportion of the middleman further declines, with corresponding growth in the value of land and labor- and corresponding decline in the rate of profit and of interest—until at length, in Massachusetts, we find the producer and the consumer so nearly brought together, as to leave but a very small proportion, of the total quantity, to be divided among the traders in money, or in merchandise; yet, there it is, that fortunes accumulate with more rapidity than in any other portion of the western world. There arrived, however, and passing downward through the various strata of society, we meet with phenomena similar to those that would be found on turning our faces once more westward. The poorer the man, the larger is the rate of interest he is required to pay; and the smaller the lodging he occupies, the larger being the proportion borne by rent to wages, and by his landlord's profits to the capital employed.* "There are, we apprehend, few persons employing in England a capital of £100,000, who would not be satisfied with a profit of less than ten per cent. per annum. A manufacturer of considerable eminence, with a capital of £40,000, complained to us of the smallness of his profits, which he estimated at twelve and a half per cent. About fifteen per cent. we believe to be the average that is expected by men with mercantile capitals between £10,000 and £20,000. Scarcely any wholesale trade can be carried on with a capital of less than £10,000. The capitals of less value, therefore, generally belong to farmers, shopkeepers, and small manufacturers, who, even when their capital amounts to £5000 or £6000, expect twenty per cent., and when it is lower a much larger per centage. We have heard that stall fruit-sellers calculate their gains at 2d. in the shilling, or twenty per cent. per day, or something more than 7000 per cent. per annum. This seems, however, almost too low. The capital employed at any one time seldom § 6. The phenomena of distribution presented by all advancing societies, passing upwards, correspond, precisely, with those observed in passing inwards from the mountains of the West, where population is small and land is valueless, to Massachusetts, where men abound and land is high; as here is shown :— Land and labor, as we see, steadily increase in their dimensions, as the proportion assigned to the trader, transporter, merchant, money-dealer, and landlord, diminishes the prices of raw materials then steadily approximating, and furnishing the most conclusive evidence of advancing civilization. Man becomes free as the circulation becomes more rapid, and as land increases in value and becomes divided—all thus profiting by the increased ability to command Nature's services. In full accordance with this, is what is now occurring in France, Germany, Denmark, Sweden, and Russia - the proportion of the landlord, the rate of profit, and the charge for the use of money, there declining, as land becomes more valuable, and man becomes more free. The reverse of this, is what is now observed in India and Ireland, Jamaica, Portugal, Turkey, and other free-trade countries land there declining in value, while the proportion claimed as rent as steadily augments; the trader's profits, too, exceeds 5s., twenty per cent. on which would only be 1s. a day-a sum which would scarcely pay the wages of the mere labor employed. It is, however, possible that the capital may sometimes be turned more than once in a day; and the capitalists in question, if they can be called so, are generally the old and infirm, whose labor is of little value. The calculation, therefore, may probably be correct; and we have mentioned it as the highest apparent rate of profit that we know."-SENIOR: Outlines of Political Economy, p. 214. increasing as money disappears, and as the charge for its use is raised. Such, too, appears to be the course of affairs in England -the wages of agricultural labor having remained stationary, while the rental has nearly doubled.* So, again, is it in the United States the growth of pauperism, and the belief in the divine origin of slavery, there steadily gaining ground, and keeping pace with the consolidation of land in the older States. Such are the consequences of a system tending, necessarily, to increase the quantity of wheat, flax, cotton, or tobacco, required to be given in exchange for gold, silver, iron, copper, lead, or other of the metallic products of the earth.† § 7. The proportion of the capitalist declines with the growth of the power of association and combination- doing so, because of the great economy of labor consequent upon the increased rapidity of the societary circulation. That, itself, increasing with the development of individuality, it follows, necessarily, that the rate of profit and the charge for interest, must be always lowest, in those communities in which the loom and the anvil are placed side by side with the plough and the harrow. That such is the fact, is seen on comparing the Southern and Western States of the Union with the Northern and Eastern ones-Brazil with France-India with England-or Ireland, Portugal, and Turkey, with Denmark and Belgium. That reduction being a necessary consequence of the increased efficiency of labor, and increased economy of human effort, no difficulty is found in explaining the fact, that capital always accumulates most rapidly when the rate of profit is lowest. That it has been so in times that are past, is seen on comparing its growth in England under the Plantagenets, or in France under the House of Valois-when interest was very high—with what is now occurring in both those countries; or in this country, in the days anterior to the Revolution, with those of later times. It may also be seen, on comparing any of the purely agricultural countries, as Ireland, Brazil, or India, with others in which employments are diversified, as New England, France, or Bel * See ante, vol. ii. p. 93, for the statements of English writers of high authority on this subject. † See ante, vol. ii. p. 205. |
