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Capital the Working Man's Server and Helper

Dear Mr.—,—,—I like your letter because of its manly tone, and because it shows that you do not make the fatal error of dividing the world into rich and poor, and considering them as if they were different species of animals. That is a mistake which the rich are often accused of making in regard to the poor, but I am afraid it is a mistake which is almost as commonly made by the poor. Yet a little reflection will show that there is no difference of kind whatever, but only one of degree. Society is a slope, and a very gradual slope, and not a series of steps. The man with £2 a week looks upon the man with £1000 a year as a rich man and cut off from him by the fact of those riches. But in reality the £1000-a-year man is not separated from the working man so much as he is separated from the millionaire with his £100,000 a year. I often laugh at my well-to-do friends and tell them that they need page 14 not imagine that working men are always thinking about them or envying them their money. Just as the Duke of Westminster, Mr. Pierpont Morgan, and Mr. Rockefeller are not always in the thoughts of well-to-do or comparatively rich men, so working men are not always grieving that they are not in the ranks of the comparatively rich. At the same time I admit, of course, that when you come to the really poor and where there is actual want, there is a difference not merely in degree but in kind. No man desires the abolition of this form of poverty more than I do. The more I study the question, however, the more convinced I am that the way to get rid of true poverty and to improve the condition of the working classes is not by State action or State doles, but by increasing the remuneration of labour—that is, by increasing wages on the one hand and lowering prices on the other. What is wanted is to give the working man a greater share in the profits of industry. Now, in my belief, there is only one absolutely certain way of doing this, and that is by increasing the amount of capital in the world. Capital is only of use to its possessor when it can hire itself out and get paid its wages. Capital is, in fact, always trying to earn wages under the name of interest. Now, the lower the wages it is willing to take, the more money it leaves over to be distributed amongst the various forms of labour with which it is bound to page 15 co-operate in the work of production. If there is very little capital in the world and many people competing for it, it can obviously demand a very high wage or rate of interest. If, on the other hand, there is a great quantity of capital trying to get itself hired—that is, trying to earn interest—it has to be content with a lower remuneration for its services. In other words, the men who do work of all kinds, mental or mechanical, are in the best position when they can go into the market and hire capital cheap to help them in the work of production. What, then, the workers of all kinds should do is to encourage the growth and accumulation of wealth—that is, capital—in order that they may have a larger supply of this useful servant at their disposal. They want to breed capital just as a farmer wants to breed cows and horses. Yet, strange as it may seem, thousands of working men have convinced themselves that capital is their enemy, and that they must try all they can to destroy it. By furthering Socialistic schemes, by threats of confiscation and of unjust taxation, and by causing a sense of insecurity, which makes people think it will not be worth while to accumulate money because it will be taken away from them by force, working men are, in fact, proposing to reduce the supply of capital in the country. The result must, of course, be a fall in wages. They are trying to kill the cows instead of milking them.

I, on the other hand, want to see capital accumulating freely and in large quantities, and competing everywhere for labour, and thus raising the labourer's wage. Though they so often deny this fact by their acts, what all labourers, whether with brain or hand, instinctively desire is higher wages. They sometimes indeed overdo this desire, or rather think only of the nominal amount of their wages, forgetting that the true way of estimating the value of wages is by considering their purchasing power. The essential thing is to leave capital and labour alone. If we do that, I have not the slightest doubt that labour will get its just reward in a greatly increased remuneration. Most of the things that we do nominally to help labour really injure it by reducing wages. Almost all Socialistic schemes tend in the end to reduce wages. This was shown in a marked degree in the old Poor Law. In the parishes where outdoor relief was given to every one, and where practically everybody was a pauperised pensioner of the State, wages were always found to be at their lowest.

I have inflicted a very long letter upon you, I am afraid, but the subject, as you know, is one upon which I feel very strongly.—Yours very sincerely,

J. St. L. S.