Capital: What it is and What it is Not.

DEAR MR. TUCKER:  — I have no desire whatsoever to obtrude myself into your controversy with Mr. Babcock, but I cannot help wishing to say a word or two about Bastiat's plane story, which you quote from Ruskin with his own remarks regarding it.

The story itself is, of course, nothing but an economical conundrum; and it would have no point whatever, were it not for the absurd property system which makes it necessary for our "William" to borrow planes and other instrumentalities of labor from our "Jameses." (1)

Mr. Ruskin himself only uses the illustration to ignore it as at all explanatory of the principle of interest (2); and, were it not for the first part of the article that you quote from him, I should derive some hope, from his last sentence, that he has a glimmering idea of the true nature of capital.

He says: "There are, indeed, very many subtle conditions involved in any sale; one among which is the value of ideas,... (the article is not one which modern political economists have any familiarity with dealings in;)" &c. (3)

The point I wish to make relates to his supposition of the, practically, total destruction of "capital" (4), in the passage in the beginning that I have referred to.

He says: "If all the money of all the capitalists in the whole world were destroyed; the notes and bills burnt, the gold irrecoverably buried, and all the machines and apparatus of manufacture crushed, by a mistake in signals, in one catastrophe; and nothing remained but the land, with its animals and vegetables, and buildings for shelter," — well, what then? Why, he says: "the poorer population would be very little worse off than they are this very instant... it is only we who had the capital who would suffer."

I must not ask for space to quote his description of the conditions of the two classes — laborer and capitalist — under the supposed — catastrophe. (The word calamity would not be appropriate to such and event, for, in my opinion, it would be anything but a calamity in its general results.)

Now, it is quite evident to me that Mr. Ruskin, when he wrote those words, has not a correct idea — and I doubt if he has to-day — of the misapplication he was making of the term "capital" And yet the very results which he was partially right in imagining would occur from the catastrophe ought to have taught him that, were all these things which he erroneously called "capital" suddenly destroyed, capital, real capital, would still remain, comparatively unimpaired!

Things that perish almost as fast as they are produced are not capital.

The accumulated and developed thought and experience of the race alone are capital. (5)

It is this thought and experience embodied in material forms that are really that property of "wealth" which makes it an invaluable aid to labor, and which renders wealth, in any other than its private (6) use, a privilege as dangerous to society and to Liberty as we all see it to be.

But the value of capital, embodied in these material forms, is as nothing compared with its value in the form of knowledge stored up in men's minds, and reaching to their fingers' ends. This was the portion of capital that Mr. Ruskin left out of the account (7) in the above supposition, and it would exist in all classes of men in about the same proportions as it does to-day. So that, in the case supposed, Mr. Ruskin would not "starve," for learned teachers like him would be wanted just as much, and, I may add, would be highly appreciated, and command greater influence. But I am encroaching.

[For convenience of comment under Mr. Smart's letter, we have inserted in it parenthetical figures at the points which it is our intention to consider.]

(1.) We made practically the same statement in the following issue of Liberty in these words: "Those who would have the userer rewarded for rendering a service always find it convenient to forget that the userer's victim would not need his service were it not that the laws made at his bidding prevent them from saving themselves." "Apex," one of our valued correspondents, elaborates the same important point in a litter printed in the present issue.

(2.) Not at all! Mr. Ruskin accepts the illustration as explanatory of the principle of interest, and alters only the language in which it is couched, so simplifying and abridging it as to bring the atrocity of that principle more clearly into view.

(3.) In our view Mr. Smart misconceived Mr. Ruskin's meaning in using the phrase, "value of ideas;" though it must be confessed that his meaning seems rather vague. That he had clear meaning, however, need not be doubted.

(4.) Mr. Ruskin makes no such supposition. He supposed the destruction of what is ordinarily called capital — that is, money and machines, — and shows that in that event, the laborers would immediately by the exercise of their wits, — that is, the really important part of their capital, — manufacture new machines and proceed as before. In saying this he should have Mr. Smart's applause (he certainly has ours), for he calls attention to Mr. Smart's pet idea, that capitalistic nature of accumulated thought and experience.

(5.) We quite agree with Mr. Smart that "accumulated thought and experience are capital," but we utterly fail to see why "things that perish almost as fast as they are produced are not capital." Any product that lasts any time at all and is capable of use as an aid to reproduction is capital.

(6.) Mr. Smart's distinction between social and private wealth, calling the former capital to be held in common and the latter personal property to be held by individuals, lies well towards the bottom of his philosophy, but nevertheless is unmitigated bosh based on pure chimera. All wealth is social wealth; all wealth is private wealth. Capital is product, and product is capital. And to the producer belongs product and capital. In the words of Proudhon, "we produce to consume and consume to produce." A man's coat is capital as truly as a steam-engine. The food that we eat is capital; the clothing that we wear is capital; the picture that we feast our eyes upon, provided they are well executed and teach ennobling lessons, are capital. And in just the same sense and for the same reason, — namely that they aid in reproduction, — the spade and the axe and lathe are capital. And any man may own one as well as the other, but neither unless he earns it. And wealth that is earned, whether by labor of brain or labor of muscle, is never a privilege, and cannot, per se, injure either society or Liberty. To be logical, Mr. Smart must either stand for unqualified communism and deny individual possession altogether, or stand for unqualified Liberty and claim for each and every individual the possession of his product or an equivalent of it. His so-called socialism is a hybrid philosophy, incoherent in its structure and unreal in its elements.

(7.) As we indicated above, Mr. Ruskin, instead of leaving this portion of capital out of account, wrote this paragraph in question expressly to emphasize the importance of taking it into account.

Mr. Smart's letter ought to have appeared more promptly, but the character of our reply will probably convince him that the delay was due to no disinclination to grapple with his criticisms. — [EDITOR LIBERTY.]