The direct source of wages

From: Henry George versus Henry George


There need be but little sifting of Mr. George’s matter, and some careful inspection of his manner, to discover that the numerous inconsistencies, and “total misapprehensions” of the “great thinkers” on which he would mount to preeminence, are as the froth of the sea to his aspiring feet.

One of these “total misapprehensions,” according to Mr. George, is “a fundamental error as to the fund from which wages are drawn.” He says:

“I am aware that the theorem that wages are drawn from capital is one of the most fundamental and apparently bestsettled of current political economy, and that it has been accepted as axiomatic by all the great thinkers who have devoted their powers to the elucidation of the science. Nevertheless, I think it can be demonstrated to be a fundamental error—the fruitful parent of a long series of errors, which vitiate most important practical conclusions. This demonstration I am about to attempt. It is necessary that it should be clear and conclusive, for a doctrine upon which so much important reasoning is based, which is supported by such a weight of authority, which is so plausible in itself, and is so liable to recur in different forms, cannot be brushed aside in a paragraph. The proposition I shall endeavor to prove, is:

“That wages, instead of being drawn from capital, are in reality drawn from the product of the labor for which they are paid.” (P. 20.)

A Note is appended to explain that he speaks “of labor expended in production.”

It is obvious that our author appreciates the magnitude of his task and the importance of being “clear and conclusive.”

After reciting a long list of errors, dependent upon this “fundamental” one, he sums up thus:

“In short, all the teachings of the current political economy, in the widest and most important of its domain, are based more or less directly upon the assumption that labor is maintained and paid out of existing capital before the product which constitutes the ultimate object is secured.”

If Mr. George show this to be an error, “and that, on the contrary, the maintenance and payment of labor do not even temporarily trench on capital, but are directly drawn from the product of the labor, then all this vast superstructure is left without support and must fall.” If he do not show it, then Mr. Georges vast industry is in vain, for, by his own heralding, this is the purchase with which he is to upset the old, and set up the new system. It “thunders loud in the index,” but—it need not “fright the ladies out of their wits,” for, in the sequel, it roars “as gently as any sucking dove.”

Re-stating the matter in a word: The whole vast superstructure of the current politico-economic science rests upon a false foundation, namely, a misapprehension as to the fund from which labor is paid. Current political economy teaches that it is paid from capital. Mr. George avers that it is paid directly from the product of the labor, for which it is paid.

This is what Mr. George is to prove. That is to say, recurring again to our author’s “primitive man”—if he digs his own roots, he is paid for his labor directly from the roots—with the roots; roots are his wages. “The man comes to the water; good.” So if he digs worms with which to catch fish for his own food, he is paid in worms. But if he digs worms for his neighbor and takes a fish in exchange—how now? Are these worms his wages? Adam Smith, Ricardo, Mill and all the “great thinkers,” say, that fish stands for capital and is the wages for the digging. Mr. George says, no,—that the digger is still “paid directly from the products of his labor,” to wit, worms. He is paid in worms, but eats the fish for which he has given the worms. And the man that sold the fish took his pay in worms. But if both are paid in worms, what’s the fish—wages, capital, or what? “The water comes to the man; good.” (Pp. 20-22.) But Mr. George does not put it that way. Let us see if he put it better.

“In the simplest state of which we can conceive, each man digs his own bait, and catches his own fish. The advantages of the division of labor soon become apparent, and one digs bait, while the others fish. Yet evidently the one who digs bait is in reality doing as much towards the catching of fish as any of those who actually take the fish.”

Therefore, he, too, is “really” fishing with the rest, and the fish he vicariously catches and takes in exchange, as wages, for his bait, which he “nominally” dug, is the “direct product of his labor”!

When I was a boy, and pumped the organ in Bishop Hopkins’ stone church in Burlington, Vt., while the organist played voluntaries, oratorios, etc., I used to think: “We did it well,” but never dreamed that I was doing “as much towards” making the instrument discourse eloquent music, as the organist. The “direct product” of my labor was certain, indiscriminate blasts of wind manipulated into “a concord of sweet sounds,” by the cunning fingers of the man at the keys. But I did not take my “wages” in wind. I got a solid, silver half-dollar a day, and the organist forty times as much. From which I could infer that there was “really” as much difference between pumping an organ, and fingering the keys, as there is between digging bait, and bobbing for eels. But perhaps Mr. George would say that this does not count, since pumping organs is “unproductive labor,” and covered by his note of reservation. (P. 20.) But suppose that instead of pumping the organ, I had collected and hauled ashes for a soap-factory, and taken my half-dollar all the same, would my wages have been drawn directly from the product of my labor—the ash-heap?

That was what Mr. George set out to prove—not that in digging bait, Tom did as much towards catching the fish as Dick and Harry, the actual fishermen, but that he took his pay in bait, the product of his labor, that his wages were drawn from the bait he dug—not from the fish Tom and Harry caught, or are to catch. The prime condition of this small division of labor was something stored up—fish salted down. Tom must live while he digs—perhaps be clothed and sheltered. He did not dig worms to eat, but “to bait fish withal.” And so far, at least, as his maintenance went, his wages came from a previous catch. And, if he dug “for a bare living,” all his wages were drawn from a previous catch—which, being something saved and “devoted to production” became and was “capital,” even according to Mr. George. (P. 37.)

Mr. George does not help his case any by showing that “the reward each obtains for his exertions, comes from Nature.” (P. 24.) That needs no proof. That is not what, with no small flourish of trumpets, he set out to prove. He did not set out to prove that if a man (p. 24) “dig roots and exchange them for venison, he is in effect as truly the procurer of the venison as though he had gone in chase of the deer and left the huntsman to dig his own roots.” It is not necessary to deny that. Indeed, that might be the only way in which he could procure the venison, by reason of being a good root-digger, and a poor shot. But the direct product of his labor is roots, from which, Mr. George is to prove that, he draws his wages. But we see that he takes his pay for his roots in venison—which is not the direct product of his, but of another’s, labor. He might have sold his roots for cash, and with the cash bought tobacco and beads, and then exchanged these with Sitting Bull for venison; but would that go to show that the root-digger drew his wages “from the product of the labor for which they are paid”? A most lame and impotent conclusion!

And these arguments are offered because Mr. George was not satisfied with having disposed of the whole question by a reductio ad absurdum. (P. 23.) As this attempt at the reductio ad absurdum, is a fair sample of his argumentative methods, it may be worth while to notice it. He says (p. 23):

“We are told that ‘capital is stored-up or accumulated labor’—’that part of wealth which is saved to assist future production.’ If we substitute for the word ‘capital’ this definition of the word, the proposition carries its own refutation, for that labor cannot be employed till the results of labor are saved, becomes too absurd for discussion.”

Is this true?

Let us substitute, as Mr. George suggests, and see: “That part of wealth which is saved to assist future production is stored up or accumulated labor.” (Of course “stored-up labor” can only mean, stored-up products of labor—things upon which labor has been bestowed.) In the concrete it is: Fish salted down to maintain A, B, and C, while catching, and salting down more fish; or the salt junk, hard tack and side-meat stored up in a whaler, to sustain the seaman on their voyage. Is there anything absurd about that? Is that equivalent to saying that “labor cannot be employed till the results of labor are saved”? If not, is it honest to so set it down? Is it possible that a man who voluntarily undertakes to confute, by the force of inexorable logic, doctrines received by the “greatest thinkers,” as axiomatic—a man who foresees that he must be “clear and conclusive”—has nothing to offer better than this? There is no art, by any device of substitution at our command, to read Mr. Georges meaning into that passage, nor any choice but to think that he never did it himself.

And yet, absurd as the proposition is, to Mr. George’s mind, there is a sense in which, with the qualification of a single word, it is true: That kind of labor which denotes the first departure from the lowest barbarism, namely, divided labor, cannot be employed till the results of labor have been saved. Andrew cannot leave fishing for himself, to dig bait for Peter, till he have saved fish—stored up the results of labor—on which to subsist while digging.

If this effort of Mr. George’s, were the reductio ad absurdum which he assumes it to be, it would so effectually close the case, that he would have no call for further exertion in that direction. But with him it is only the beginning of trouble, the opening of the discussion at the very point where logicians generally are wont to consider it closed.

And it is safe to go still further and say that, without qualification, the proposition is strictly true. In the politico-economic sense of the word “employ,” it is correct to say, that “labor cannot be employed till the results of labor have been stored up;” till capital has been accumulated. Certainly it cannot be honestly employed—if by employ is meant to utilize or hire, the labor of another—unless the employer already see his way to recompense it. He can see that only in his havings—something that he has saved—stored up beyond his own immediate need, whether it be an edible commodity or a fund of money. If Peter “employs” Andrew to dig bait, or to help him fish, the act implies the obligation and the means to pay him, whether in fish, or in money “salted down.” If not from what he has already saved, from what he hopes to have and save—anticipating capital, involving credit, and implying the “capital of character;” a treasure stored up that counts in trade as well as acres of ground or crocks of gold. But capital can be anticipated in a particular instance only on the supposition of the preexistence of capital in general.

The farther Mr. George goes in expounding the nature and function of capital, the farther he gets from the proof of his main proposition.

The accepted doctrine is, that capital is anything saved or reserved for the payment of labor not employed in, or devoted to the production of the immediate necessaries of life. Capital is anything that may be used to support the laborer while performing his task—using the word “laborer” in the sense of, a hired person. Mr. Mill indexes the subject in these words:

“Capital is wealth appropriated to productive employment.”
“Whatever things are destined to supply productive labor, are capital.” (Political Economy, vol. I, pp. 83-84.)
“As whatever of the produce of the country is devoted to production is capital, so conversely, the whole of the capital of the country is devoted to production.” (Ibid., p. 86.)

On page 420 he expressly confines capital to that part of wealth “which is expended in the direct purchase of labor.”

The same idea is found on p. 421:

“The distinction, then, between capital and not-capital, does not lie in the kind of commodities, but in the mind of the capitalist—in his will to employ them for one purpose rather than another; and all property, however ill-adapted in itself for the use of laborers, is a part of capital, as soon an it, or the value to be received for it, is set apart for productive investment” (Ibid., p. 86.)

With Mr. George: “Capital is,” besides a good many other things, “wealth in course of exchange.”

Mr. George says: (p. 30:)

“John Stuart Mill … makes neither the use nor the capability of use, the test of capital. He says: ‘Whatever things are destined to supply productive labor with the shelter, protection, tools and materials which the work requires, and to feed and otherwise maintain the laborer during the process, are capital.’ “

Conceding the “frankness” and “notable candor” so frequently accredited to Mr. George, to what are we to ascribe his failure to recognize the fact that almost every word of the passage he quotes right under the nose of his assertion, by the clearest implication, flatly contradicts it? How can the things be “destined to supply productive labor with shelter, protection, tools … which the work requires, and to feed,” &c, except as they are used, or are capable of use for those purposes? Had Mr. Mill inserted the words to be used or before “destined,”—the meaning could not have been one whit different or clearer than it now is. And again on p. 39:

“If Mill, by remitting the distinction to the mind of the capitalist, avoids the difficulty (which does not seem to me clear), it is by making the distinction so vague that no power short of omniscience could tell in any given country at any time what was, and what was not capital.”

Here we give Mr. George’s “test”:

“Now, if, after having thus separated the wealth that is capital, from the wealth that is not capital, we look for the distinction between the two classes, we shall not find it to be as to the character, capabilities, or final destination of the things themselves, as has been vainly attempted to draw it [sic!]; but it seems to me that we shall find it to be as to whether they are or arc not in the possession of the consumer.” (P. 41.)

But how are we to know that they are in the possession of the consumer unless we know the “mind”—intention of the possessor?

Mr. George (p. 39) approves that definition which declares capital to be: “that portion of wealth which its owners do not propose to use directly for their own gratification, but for the purpose of obtaining more wealth”—or as “that part of a man’s stock which he expects to afford him revenue.” [The italics are ours.] And he says, (p. 39): “this is the only sense in which the term ‘capital’ expresses any fixed idea—the only sense in which we can with any clearness separate it from wealth and contrast it with labor;” which he now seems to think is the essential thing to be done.

Now, would it be impertinent to ask whether it requires less “omniscience” (barring the bull) to ascertain what a man “proposes” or “expects,” than to find out what he desires, intends, or determines? Do not political economists generally, Adam Smith and Mr. George in particular, “remit the distinction to mind” quite as much as Mr. Mill?

It is worthy of note, as shedding light upon the quality of Mr. George’s mental faculty, that this gratuitous fling at Mr. Mill, the approved definitions, with their “propose,” “expects” and “fixed idea,” are all to be found on the same page of Mr. George’s Book. (P. 39.)

According to Mr. George, (p. 41.) a man’s clothes are not capital, unless he be a tailor and makes clothes for sale. If the tailor makes a coat for his own wear, it is not capital; but if he makes one to sell, it is. But suppose he makes it to wear himself, then, incontinently, takes a notion to sell it to the first comer that takes a fancy to it; does it change its character with his change of mind, and become capital? Why not? It must be. Then any man may convert his coat or hat into capital by offering it for sale. He would become a capitalist if he “had to sell his shirt off his back” to get himself and dog a dinner. So, a “Georgia costume” (a shirtcollar and a pair of spurs) is potential capital, and “may be so converted” whenever offered by its owner for “Havana cigars,” or “drinks ’round.” Even Eves primitive and scanty wardrobe would have turned into capital if she had offered to trade it with Satan for a peck of apples.

“If we must consider,” he goes on to say (p. 39), “as capital everything which supplies the laborer with food, clothing, shelter, etc., then to find a laborer who is not a capitalist, we shall be forced to hunt up an absolutely naked man, destitute even of a sharpened stick, or of a burrow in the ground—a situation in which, save as the result of exceptional circumstances, human beings have never yet been found.”

You are quite right, Mr. George, and you may be referred to Mr. George’s “Own Book” on Progress and Poverty, page 24, for the testimony and example, where he gives us the picture of the primitive man as fisher and root-digger, and also tells us, on the previous page, (23) that the “fundamental truth” that must be “firmly grasped and never let go,” is that the law—the principle—is the same in the simplest and rudest relations, as in the most intricate and complex.

And we have already shown, from the same authority, how it required nothing but a trifling commercial transaction between Eve and Satan to convert her into a capitalist, and her fig-leaf into capital, by putting that article “in course of exchange.”

On page 40, Mr. George gives a rule for distinguishing capital.

But, as a preliminary to a due appreciation of his performance in this behalf, let the reader turn to page 27 of his Book, and observe with what a stately sense of his responsibility he approaches this subject; with what princely port he steps to the fore of the “many eminent authors” who have stultified themselves and bemuddled the reading public by “falling into grave errors from the same cause which they warned against,” and how the new politico-economic Luminary will endeavor to avoid all these dangers; and how “requisite” it is to give “a much more definite sense” to such words as “wealth,” “capital,” “rent,” and “wages;” and how, “as any term becomes of importance,” [so to speak,] he will “clearly state” what he means by it, “and use it in that sense and no other;” and how he calls upon his readers “to bear in mind the definitions thus given,” as his only ground of hope of making himself understood. Then Mr. George goes on to make an exhibit of some of the numerous definitions, with their “differences,” and “divergences,” and “variances,” and “ambiguities,” and finally tells us:

“If Mill, by remitting the distinction to the mind of the capitalist, avoids this difficulty, (which does not seem to me clear), it is by making the distinction so vague that no power short of omniscience could tell in any given country at any given time what was and what was not capital.”

Mr. George is “a remarkable man;” this is a “remarkable book;” these be remarkably words. See!

By the construction, it is the “difficulty” that does not seem clear to Mr. George. But to us it seems superfluous to say that a difficulty—as a difficulty—does not seem clear,—for on becoming clear it would cease to be a difficulty; unless it be clearly a difficulty. This is certainly not what Mr. George means. If it be the “distinction” that does not seem clear, then we understand why it is not clear to Mr. George; since “no power short of omniscience could tell,” &c, &c. Of course that lets even Mr. George out without serious derogation from his discerning faculty; and his modesty in owning up, shall have its full meed of admiration.

Still, positive as it is, Mr. George’s assertion is open to question. Taking it for granted that he says what he wanted to say—that he did not mean to say “no power short of” omnipotence; taking him as he says, it must be insisted that a measure of power far—very far short of Omnipotence, would be quite equal to the task of telling us all about it, after, once, by the divine attribute of omniscience, the “vagueness” had been thoroughly penetrated.

We have dwelt somewhat upon the phraseology of this passage of Mr. George’s, because it illustrates, not only “the importance of language in thought,” but also the importance of thought in language.

Now let us get back to our mutton! On page 40, of Mr. George’s Book, we read:

“Instead of determining what capital is, and then observing what capital does, the functions of capital have been assumed, and then a definition of capital made which includes all things which do or may perform those functions. Let us reverse this process, and, adopting the natural order, ascertain what the thing is before settling what it does. [!] All we are trying to do, all that it is necessary to do, is to fix, as it were, the metes and bounds of a term that in the main is well apprehended—to make definite, that is, sharp and clear on its verges, a common idea.”

Mr. George tells us that “the functions of capital have been assumed? and the definition made afterward. He does not condescend to tell us when or by whom this unnatural deed was perpetrated, but goes on, at once, to “reverse the process.” And, notwithstanding his implied protest against assuming the functions of capital, he would have us “ascertain what the thing [capital] is before settling [ascertaining] what it does.” But if we are estopped from “observing what capital does” till we have “determined what capital is,” how are we ever to “ascertain” anything about it?

It was not necessary for Mr. George to go farther than an English Dictionary to learn that “function” is derived from a word which means to do, to execute, to perform; and that, by legitimate inference, the functions of capital are the actual or possible “doings” of capital. Had he known this, should we have been told that we are neither to assume the doings of capital nor to observe them, till we have ascertained what capital is? If, herein, our knowledge is not to come by observation, what recourse have we, but to assumption or conjecture? Here is a predicament—We are neither to assume what capital does, nor to observe what capital does, but we are to ascertain what capital is “before settling [ascertaining] what it does.” And this is what Mr. George means by “reversing the process.” And this is the way he leads us out of the wilderness of “ambiguities” into which the masters led and left us. This is a taste of his style and “literary power” when he is especially exerting himself “to make definite, that is, sharp and clear on its verges, a common idea.” (P. 40.)

Only “on its verges!”—”All that we are trying to do, all that it is necessary to do,” is to make a “common idea,” (so common, indeed, that it already, “in the main, is well apprehended”), “sharp and clear on its verges.” No matter how dim, dull, blunt or obfuscated elsewhere, so it but be all right on its verges! To this complexion have we come at last! This was all Mr. George had to do; and the reader can see how well it is done! With one lingering look at this little end of the horn, take another backward glance at the big end as it flares out on page 27,—of Mr. Georges book.

But we are not yet done with this term, capital. It is one of the pillars, if not the very foundation of Mr. George’s edifice, and it is really worth while, for the present purpose, to see what sort of a foundation he himself, makes of it.

According to him, the word is beset with “ambiguities,” (p. 29), and “difficulties,” (p. 33), which make it difficult “to fix the scientific use of the term”; “while economic writers vary so widely that the term can hardly be said to have any fixed meaning.” Then he makes a series of comparisons to show how “widely” the definitions differ; that no two of them are alike, and that some are “very different”; and then says of four of them, that these “quotations sufficiently illustrate the divergence of the masters.” (P. 30.) And after citing from the lesser lights—not classed with the masters—he states again that the quotations “already given are sufficient to show how wide a difference exists as [not now to the definitions, but] to the comprehension of the term capital”; (though on page 33 he informs us that “most people understand well enough what capital is,” &c.,) but kindly adds, that “any one who wants further illustration of the ‘confusion worse confounded’ which exists on this subject among the professors of political economy may find it in any library where the works of these professors are ranged side by side”; and assures us that he “might go on for pages, citing contradictory and self-contradictory definitions.”

If, by this time, one is not quite thoroughly disgusted with the seething, undistinguishable mess Mr. George makes of the abortive efforts of “the masters” and “professors,” it is certainly not the fault of Mr. George’s purpose, “sharp and clear on its verges,” to make it so. But let us once more flash the light of Mr. Georges torch into the mirk and gloom, and behold what an image of matchless beauty and faultless outline, that is, on its verges, starts into view!

“Now, it makes little difference what name we give to things, if when we use the name we always keep in view the same things and no others. But the difficulty arising in economic reasoning from these vague and varying definitions of capital is that it is only in the premises of reasoning that the term is used in the peculiar sense assigned by the definition, while in the practical conclusions that are reached it is always used, or at least is always understood, in one general and definite sense. When, for instance, it is said that wages are drawn from capital, the word capital is understood in the same sense as when we speak of the scarcity or abundance, the increase or decrease, the destruction or increment, of capital—a commonly understood and definite sense which separates capital from the other factors of production, land and labor, and also separates it from like things used merely for gratification. In fact, most people understand well enough what capital is until they begin to define it, and I think their works will show that the economic writers who differ so widely in their definitions use the term in this commonly understood sense in all cases except in their definitions and the reasoning based on them.”

Well, then, why not skip the definitions and fall back upon the “practical conclusions”? And if most people understand well enough what capital is until they begin to define it, why not write a book against the folly of defining and put an end to the pother at once?

The italicizing above is ours; and as a definition, or elucidation of the term, capital, we ask the especial attention of the reader to the words:

“The word capital is understood in the same sense as when we speak of the scarcity or abundance, the increase or decrease, the destruction or increment of capital.”

We are far from seeking to make a point by garbling the text. We can make nothing of the words in their connexion (if they have any) and have no better success with them apart. The reader can try his hand at them both ways, and “then to supper, with such appetite as he has.” On page 27, Mr. George promises as follows:

“It will be my effort, as any term becomes of importance, to clearly state what I mean by it, and, to use it in that sense and in no other.”

Without stopping to comment on the “thorough literary culture” displayed in this passage —the “style which rivals the genius of Newman and Macaulay”—we proceed to say, that if there is any place where “terms become of importance” it is in the body of a definition or elucidation. And yet Mr. George does not stay to tell us in what sense he uses “decrease” as differing from “destruction,” in regard to capital, or what distinction it is, he would make sharp and clear on its verges, by the consecutive use of such synonymous words as “increase” and “increment”; or how we are to extract from them any “sense which separates capital from the other factors of production.”—Nor does he seem to think his readers could wish to know how the word “capital” can be “always,” or at any time, “understood in one general and definite sense;” since these two adjectives carry meanings diametrically opposed to each other. Mr. George might as well have said “in one indefinite and definite sense.”

This may be all right, precise, definite, sharp and clear, to Mr. George and his admiring readers, but to us, it is quite too suggestive of Dogberry’s “babble and talk—most tolerable and not to be endured.”

Directly following the passage quoted above, on pages 41, 42, and from Mr. George s book, “Progress and Poverty,” page 32, he plainly says:

“This common sense of the term [capital] is that of wealth devoted to the procuring of more wealth.”

There can hardly be any question as to the clearness or soundness of that proposition, for that is the language of “the masters”; but one would as soon think of looking for it in the dream of Bottom the weaver, as in the preceding paragraph of Mr. Georges book. (P. 32.)

However, it is “the essential idea,”—the very idea which Mr. George himself, accepts as the correct one. And this idea, in spite of the “wide differences” which he has made so much ado about, is the dominant one, expressed or implied, in every definition that Mr. George has cited from the masters and great thinkers. And thus is seen the result of Mr. George’s attempt to walk the waters of a deep and difficult science, with the bladders tied to his feet.

After setting forth some, out of the “pages” that might be given, of the “variancies,” as he calls them, the “contradictions and self-contradictions” of the different definitions, and the endless “confusion worse confounded,” to which they lead, and the bewildering muddle they make of one of the most difficult and momentous of sciences; putting Mr. George under tribute for a book of more that five hundred pages; and, after diligent endeavor to extract from the chaos something that shall be “definite, sharp and clear on its verges”; steering wide of the rocks and reefs on which the “great thinkers” have split and gone under—after all this, and the high hope he has aroused in us,—we are coolly dismissed with the comforting assurance that his definition, in the phrase of the immortal Toots, “is not of the least consequence” after all (P. 42.) After mercilessly berating all other definitions, excepting Adam Smith’s; after taking so much pains to “make sure of the meaning” of his “terms,” and scoring the evils of not making sure; after urging “the importance of language in thought,” and especially “the importance of clear and precise definitions,” (p. 27,) he gives us this for his definition of Capital, the pivotal point of the whole science of political economy:

“Capital is wealth in the course of exchange.” (P. 41.)

He then tells us (p. 42) that his definition is not inconsistent with the essential idea of all other definitions—”wealth devoted to production”; and, last of all, declares the issue of his travail to be of no importance. This final “whistling it down the winds” comes over us more like a wet blanket than a “summer cloud.” Parturiunt montes—”you know the proverb.”

Mr. George’s “digression,” as he designates (p. 42) the matter on pages 27 to 42 inclusive,—if it elucidates nothing else, certainly throws some light upon his critical acumen, as well as upon his literary proficiency and argumentative faculty,—as displayed, not here only, but throughout his book. It is not overstepping the bounds of legitimate criticism one whit to say that the taint of incapacity or disingenuousness pervades it all. One knows not where else to look for so reckless and unremitting abuse of the Queens English as, that which defaces these pages; unless, perhaps, among the mellifluous effusions of the “Sweet Singer of Michigan” whose book bears about the same relation to Shakespeare that Mr. George’s does to Mill’s Political Economy.

It may be easy for some “staunch polemic” to make a point against an adversary, by forcing the definitions, putting his own meaning into other people’s words, and then charging them with inconsistency, absurdity, et hoc genus omne, for not using the old terms in a sense accordant with the new stuffing.

Mr. George tells us what the term “wages” ought to mean, and then arraigns the whole fraternity of political economists for breaking a law which is now, for the first time, proclaimed. He can maintain his fundamental proposition, namely, that wages are drawn from labor and not from capital, (the accepted view,) only by re-defining the term. This he boldly does, by implication at least, and on his own responsibility, by the “sole power of his own unlorded will.”

According to him, the case stands thus: The whole world has gone wrong on this question of the relation of wages to capital; and from this single error, an endless concatenation of evils has ensued. Under the delusion that wages are drawn from capital, Political Economy is swarming with inconsistencies, ambiguities, confusions, absurdities and self-contradictions;—and the towering climax of all evils, Progress and Poverty. All this multitude of mischiefs, Mr. George proposes to abolish at one fell swoop, by showing that wages are drawn directly from labor—not from capital at all. How? Why, presto! by change of name. Henceforth we are to understand, that the thing that is taken from wealth to reimburse labor, is not to be called capital. Let it take any shape but this, and Mr. George’s firm nerves will never tremble.—Shall it be wages? Mr. George will compromise on “wages” if you will agree to apply the same term to the oyster which the naked man knocks from the rock with a sharpened stick. Now, then: all capital is wealth; all wealth is the product of labor; (p. 36;) and labor is paid from the product of labor; yet we must not say, that labor is paid from capital. Thus: If a man gather bird’s eggs, the eggs gathered are his “wages”—the pay for his labor. Can any one be so absurd, Mr. George would ask, as to suppose that such pay is drawn from capital? If such eggs are not capital, then the “current theory ” goes to the ground, and Mr. George is in high feather. But if they may properly be set down as capital, then the current theory stands, and Mr. George has his labor for his pains—an instance of “labor paying itself,” to which he is heartily welcome. And yet, that we may class them (the eggs) as capital, Mr. George gives us ample warrant; for that is precisely what he himself does. (Pp. 40, 41.) According to him: If the egg-gatherer eats his eggs, they are not capital. He can eat wages but not capital. But if he saves his eggs, or a part of them, and shelves them in his shop window, “side by side” with his ”cigars” and “false hair,” and offers them for sale, they become capital. Now, that they are invested with, the property of capital, by being offered for sale, suppose that the owner hires a neighbor to make packing-boxes for the eggs and pays him in eggs taken from his shopwindow; are not the box-makers wages drawn from capital? If not; from what—besides the shopwindow?

“An absolutely naked man, thrown on an island where no human being has before trod, may gather birds’ eggs or pick berries.” (P. 44.)

Yes, and eat them, too; “and there is no capital in the case,” or wages either. But if he should sell them, or a “part of them,” to another naked man for a pair of spur, or a mug of beer, or, to get closer to Mr. Georges example, for a “sharpened stick”; then his berries become capital—”wealth in course of exchange” (P. 41.) And if naked man No. 2 pass on a part of the berries to naked man No. 3, in payment for brewing the beer, are not No. 3’s wages drawn from capital? If not, when, how, where, and by what magic did the berries part with that quality? They are still “in the course of exchange.”

Is not Mr. George deceiving himself by that very abuse which he so lavishly rebukes in others—the misuse of words? Does he know what the words “pay” and ”employ” mean, as used in the science of Political Economy? If he does, is it fair, is it honest to introduce “misleading” metaphors into scientific discourse; especially after warning us that it is a ”use of language that must be eschewed in reasoning that aims to be exact”? (P. 34.) Under this condemnation, what right has he to talk about the laborer “being his own employer”; or of a man paying wages to himself”? “The eggs or berries I thus gather are my wages.” Such he calls them, and in this displays his “originality”! And it is by this kind of originality that he seeks to raze the strongholds of the science of Political Economy and put himself atop of all the great thinkers. He could be quite as original in renaming the rose; nevertheless it would smell as sweet and just the same.

Did it ever occur to Mr. George to ask himself: If the distinction between employer and employee, the capitalist and the laborer, be so dim or evanescent that both may be combined in and confined to the same person, how comes it, that such a conflict exists between them as to keep the whole country in a perpetual broil?

No, the eggs and berries are the fruit of his labor, but not the “wages,” as Mr. George might have learned by consulting the Dictionary. Nor is it any excuse for Mr. George’s vagary here, that Adam Smith made the same mistake, since he corrected it by “immediately abandoning it.” Not so, Mr. George. He insists that, according to “the economic meaning of the term wages,” (p. 44,) the “primitive man,” when “he obtained an oyster by knocking it with a stone from the rocks,” (p. 53,) took it as his “wages” as truly as the hired laborer receives his stipulated reward as wages. He also says that “attention is concentrated upon the common and narrow meaning of the word, when it is affirmed that wages are drawn from capital.” (P. 44.) He also says: (p. 50:)

“Labor always precedes wages.”

True, but hired labor (the only kind in which the question of “wages” arises,) never precedes capital. And right there, Mr. George, lies the point.

By “wages,” Mr. Mill means, “that part of capital which is expended in the direct purchase of labor,” and “all funds paid in exchange for labor.” Thus it is seen that the “common and narrow meaning” of the word, is also its politico-economic meaning. It is also the dictionary meaning, and the Bible meaning; there being but a single instance in that Book where it is used in any other sense than that involved in the relation of the hireling and his wages; namely, “the wages of sin is death.” In which case the figure implies that the sinner has the devil for employer and paymaster. And it is obvious from the passage quoted by Mr. George, (p. 45,) from Adam Smith, that when he spoke of the “natural recompense, or wages of labor,” he uses the word metaphorically, and not literally, as he afterwards consistently does;—a fact which Mr. George can find no better way to express than by saying, that Mr. Smith “momentarily recognizes it [”the truth”] to immediately abandon it”; evidence either of design on the part of Mr. Smith to adhere to the “common and narrow meaning of the word,” or of an obtuseness glaringly in contrast with the clear perceptions and logical coherence of his modest commentator. However that may be, justified by the present predominance of authority, we shall be excused for sticking to the old usage till Mr. George gives us some better reason than he has yet offered, for accepting the ”primitive oyster-man” theory. But even Mr. George’s little fiction of “self-employment,” got up to do service as backbone to his new definition of “wages,” (pp. 29-46-53-61,) is wholly superfluous, for, on page 186, we are plainly told that, “though there is neither employer nor employed, there is yet wages.”

“Wages are the produce of labor.” (P. 45.)

No one denies that all wages are the product of labor, in just so far as all wealth is the product of labor. But all the product of labor is not wages. If the produce of labor, eggs and berries, be consumed by the producer, it is not wages. If saved for the employment of other labor, it is capital. If paid out for such labor, it is wages—”pay,” “hire,” and that too, “drawn from capital,” whatever labor may have had to do ”directly,” or indirectly, in the production of it.

The phrase “self-employing laborer,” may serve the purpose of the poet, or moralist, as a convenient figure of speech, but when Mr. George uses it as a term in the logic of science, either as a ground or instrument of argument, he either betrays ignorance of his own, or presumes too much upon that of his reader. That it is the former, may be inferred from the fact that he can repeatedly spread the immitigable nonsense out before his own eyes, and never once seem to perceive it. If a man can employ himself, (in any proper scientific sense,) then he comprises in himself alone, the two-fold character of employer and employee; is an employer, and “hired man” too, to all politico-economical intents and purposes—a “selfemploying farmer,” if you please, as much as any other employer. Now then, let us see what a mess Mr. George makes in the use of his chosen term. He says: (p. 46:)

“In the United States, where any general law of wages must apply as fully as in Europe, and where in spite of the advance of manufactures, a very large part of the people are yet self-employing farmers, the proportion of laborers who get their wages through an employer, must be comparatively small.”

How can that be? Surely there must be as many people employed as there are employers. The self-employer employs, as employer, himself as laborer, and by the same token, pays as employer, himself as laborer, and so the laborer gets his wages “through an employer.” That is, every self-employer has the two-fold character of employer and laborer, and the politico-economic relation is complete between them; and the commodity with which he, as employer, pays himself his wages, as laborer, must be conceived of as something “in the course of exchange” from one party to the other, thus constituting capital.

If this be nonsense, Mr. George is responsible for it. Nor can he complain of it as hypercriticism, so long as he himself continues vehemently to protest against the vague, indefinite, or metaphorical use of terms by other writers. Nor is it any excuse for him that he was driven to the use of this preposterous epithet “self-employer,” as a technique of science, by his definition, or rather notion, of wages, and the need he has of it as a prop to his rickety proposition, that “wages are drawn directly from the product of labor.”

In fact this conception, or as we have seen, if not misconception, forced construction, of Mr. George’s, is his sole dependence—and at best a bold, if not barefaced begging of the whole question. And he never wearies in effort to enforce assent to it. Again he tells us: (p. 46:)

“As soon as it is realized that the term wages includes all the earnings of labor, as well as when taken directly by the laborer as the results of his labor, as when received from an employer, it is evident that the assumption that wages are drawn from capital is at least in large part untrue, and the utmost that can with any plausibility be affirmed, is that some wages, (e. i., wages received by the laborer from an employer,) [“self-employer”?] are drawn from capital.”

This is letting down considerably from the “not even temporarily trench on capital,” of page 22. And it is apparent too, that Mr. George is beginning to find that little word, “directly,” too big a load for him to carry, and that he hopes to make better time by quietly dropping it. It will also be seen that, conceding to him the use of his term “self-employer,” he here, unwittingly, of course, yields the main point in his case, by unequivocally admitting that all wages are drawn from capital, since they are “received from an employer.”

The real significance of the above quotation, and, for us, the saving clause, is the “as soon as” with which it sets out. “When”—&c, “then,” &c.—And not till then. And that will be long after Mr. George and his book are “gone glimmering through the dream of things that were.”

Continued: The Whale ship …