50 Years Ago: What is capital?

The Editor of the Clarion in replying to a correspondent, writes, “You evidently don’t understand the subject at all. No Socialist ever talks about ’doing away’ with capital.”

An instance this, truly, of “the blind leading the blind!” To be consistent the Clarion should also maintain that no Socialist ever talks of abolishing Capitalism—for Capitalism obviously cannot end if capital does not cease to exist.

The Socialists of all countries are, however, decidedly agreed that capital must be abolished; and the only explanation of the Clarion editor’s strange statement is that he lacks a knowledge of the economics of Socialism.

The matter turns upon the definition of capital itself, and apparently the Clarion holds the archaic view that capital is simply wealth which aids in the production of further wealth. This is no definition at all, for, as even Professor Marshall is compelled to admit it is an inclined plane upon which no stable resting place is found until all accumulated wealth is included as capital.

Socialist economics gives a definite meaning to capital as that part of wealth which is used as a means of obtaining an income from the labour of others; in short, as wealth used to obtain “profit.” Modern economists have been compelled, in practice to accept this definition under one form or other of words, in order to give any value at all to the term.

The object of the Socialist movement, therefore, is decidedly to abolish capital; to end the use of wealth as a means of extorting surplus-value from the working class. The absurdity of the Clarion position is obvious from the fact that any other than the Socialist definition of capital makes every navvy who owns a pickaxe, a capitalist!

The “doing away” with capital, however, no more means the abolition of the instruments of production than the abolition of Capitalism implies the doing away with mankind. Socialism ends the system of production for profit, and inaugurates production for social use; it necessarily does away with the use of the means of wealth production as capital, and turns them into social instruments for the good of the community.

Economics, however, was never the Clarion’s strong point.

(From the “Socialist Standard,” April, 1906)