Once More

THERE is an elementary truth which has been repeated over and over again in this paper and elsewhere. The repetition must be continued because it is only thus that even obvious truths can be made to pierce in the days through which we are now living. The excuse for repeating it and hammering it in is that the very highest political consequences depend upon its appreciation. That truth may be formalized as follows: “Under capitalism the producer has every motive for not producing wealth.”

Another defect from which our time suffers is lack of definition. Words are used in all manner of different senses, and to hardly any one of those senses is the exact meaning adapted. In such an atmosphere it is impossible to reason or to analyse without clearly defining the terms one is using.

Let me repeat therefore that definition without which all discussion is meaningless: “We mean by capitalism a system under which wealth is produced by a mass of citizens, politically free but dispossessed, and these working for the profit of a far smaller number of effective owners and controllers of the means of production.”

It is no objection to this definition that a great number of dispossessed who are occupied in the production of wealth own something; they nearly own the clothes they wear, and most of them own a few sticks of furniture. Great numbers own small units of capital, a few certificates, or a few shares, or a policy; but the governing condition of their lives is that they are working for the profit of other men and, further, or under the inhuman control of those other men.

Now, that word “inhuman” is of first importance. Human servile relations, domestic control, are tolerable things. Mere mechanical control exercised by anonymous wealth impersonally is not tolerable. It will kill itself and the society which it governs. Meanwhile it is an increasing plague.

The typical unit of production under modern capitalism is a factory or a transport system in which citizens of the disposed kind (commonly call proletariat) work at a wage, on the reception of which at comparatively small intervals depends their existence. This wage must be less than the total amount they produce by their labour; that is, there must be a margin of profit (normally) between the wage paid by the capitalist to the proletarian worker and the value of what the latter makes: for if there were no such profit, actual or prospective, there would be no reason for the capitalist to set the machinery of production in motion. For instance, if a capitalist body hires ten thousand men to dig out of the earth a million tons of coal in a given unit of time, the mine cannot be carried on unless the values received in that unit of time, as wages by the miners, is worth a good deal less than the million tons of coal which they have extracted by their labour from the earth.

Under these conditions of work undertaken for the advantage of another, it is necessary and self-evident that the less the wage of the worker the greater the profit to his employer. It is further necessary and self-evident, that the advantage of the worker is to do as little work as possible for as much money as possible, and the advantage of his capitalist master is to give the worker as little money as possible for the wage he receives. Whatever form the question takes, that is the truth which it expresses. The proletarian worker may be aiming at shorter hours or less pressure during those hours or for an equal number of hours at a larger wage, but it is all a form of producing as little as possible.

In whatever way you put it, it always comes out to the same thing. The man who is producing the wealth tends to produce as little wealth as possible per unit of time. It is of no advantage to him to produce as much as possible, it is of every advantage to him to produce as little as possible, short of losing the wage upon which he lives. The worker is necessarily out to kill profit, and yet is the motive whereby the whole system is kept going!

It is no answer to this clear truth to say that organization and scientific work and all the rest of it bear their part in production quite as much as manual labour or the tending of machines. Of course they do. But vastly the greater part of the organization and scientific work and the rest is done at a wage just as much as manual labour or the tending of machines is done at a wage. The man who looks after his own individual business in which he exploits a number of proletarians and successfully directs their labour himself is an exception to-day; and even he, as a rule, in proportion to his success, takes less and less direct action as his life proceeds. The mass of all work, intellectual as well as manual, even in a successful individual business, proletarian; in company business it is all proletarian.

The direct consequence of this paradoxical state of affairs, in which he who produces wealth is, by every economic motive, driven not to produce wealth, is the necessary breakdown of the whole system. There comes a point after which it cannot carry on, but must, in order that society shall survive, be transformed into one of the two alternative types, the one fully servile, the other based on property. Either the mass of the proletarian workers must be compelled to work by force for the profit of others and under the control of wills not their own, or the motive of property must be restored whereby the man who works can profit from his own labour.

The intermediate or preliminary stage which may be called “the formative period” of capitalism is a lure. Men who have lived under it, and especially those who have prospered under it were vaguely of a mood that it could last indefinitely. It could not so last, for plain arithmetic forbade its endurance. So long as there was an indefinite supply of unorganized proletarian labour or so long as the proletarian worker inherited the traditions of a better time when his ancestry were possessed of small property, capitalism could expand and flourish. But those conditions were of their nature ephemeral, and they are now passing away so rapidly that the effects of their departure are already threatening the whole body of our civilization.

Attempts to reconcile capitalism and contented industrial labour have in them self-contradiction. They are often called “palliatives,” but they are worse than that. They are the attempt, or the pretence, at reconciling contradictories.

We have a very fine example of such folly in the French “Social Laws” as they are called. The hours of labour are shortened by compulsion. The scale of wages is raised by compulsion. What follows? What obviously and necessarily follows under a capitalist system of production is an increase in the cost of production, and therefore in the price the worker himself has to pay for the things he consumes. Finding that the price of these things has risen the worker again organizes to demand a further rise of wages which, if, the profit is to be maintained, means a further cost added to the produce—and so on indefinitely.

It is a good thing that this particular “experiment” (as its author called it) has broken down so quickly and so thoroughly, for it has exposed the radical error which vitiates all such policies. You cannot be and not be at the same time. Not even the most muddle-headed fool, enamoured of what he calls “compromise” or “gradualness,” can be such an ass as to conceive that being and not being are simultaneously possible. Hard and strenuous work cannot be—cannot exist—at the same time as slack work and little of it. High production of wealth cannot be coincident with low production of wealth.

There are no issues from the situation (whether you call it a vicious cycle or a blind alley or whatever metaphor you choose) save servitude or the restoration of property. You may restore property collectively through the guild, the corporation, or individually or by families, where the method of production makes that possible. But if you don’t restore property, you restore slavery.

You may compel men to work, and the servile compulsion is of the same character and effect whether it is exercised by an individual, or the State itself; or you may leave a man free from such compulsion and give him citizenship. You cannot do both at the same time. The whole of our civilization has now to make up its mind, and that quickly, whether it will take the road to civic freedom or the road to servitude.

~Hilaire Belloc

From One Thing and Another: A Miscellany from His Uncollected Essays, chosen by Patrick Cahill. First published 1955.

"The distribution and use of wealth"

“THE only difficulty is to keep in our minds a clear distinction between what is called economic law, that is, the necessary results of producing wealth, and the moral law, that is the matter of right and wrong in the distribution and use of wealth.”

~Hilaire Belloc: Economics for Helen.

•  Amazon

"This classic introduction to the basics of economic theory offers a constructive approach to economic education by defining terms and introducing key concepts without using insider jargon and complex theories. The fundamental questions about why the economy fluctuates and how small farmers, small business people, families, consumers, and innovators are affected by these fluctuations are considered. Serious alternatives to modern economic theories are explained, with attention to the realities that have been largely unchanged through the last century."

"The corrupting effects of wealth"

"OF all the corrupting effects of wealth there is none worse than this: that it makes the wealthy (and their parasites) think in some way divine, or at least a lovely character of the mind, that which is in truth nothing but their power of luxurious living. Heaven keep us all from great riches—I mean from very great riches!"

~Hilaire Belloc: The Path to Rome.

Usury

When Bonds are Issued to Yield a Profit Out of Destruction, or Exact Interest From Non-Productive Investment, the Evil Will Eat Society Up. Denounced by Ancient Pagans and Christian Moralists Alike, Usury Has Become a Term Almost Forgotten Although Its Practice Is of Daily Experience.

I NOW go on to talk of the plague of monopoly, which is one of the very worst results of modern capitalism, and is ruining society quite as much as the burning sense of injustice suffered by the worker under capitalism. I shall speak of the monopoly of production gradually killing men’s choice in what goods they shall enjoy; the monopoly of distribution, gradually killing men’s choice of where they shall buy and of whom; the virtual monopoly of credit, through the concentration of banking and the stranglehold of the bankers on the modern capitalistic world.

But before we can understand the growing monopoly of credit we must understand “Usury”.

First, let us understand what we are talking about. The word “Usury” is used today in two very different senses. It is used to mean excessive interest on money: that is the popular meaning of the word. It is also used to mean “interest on money as distinguished from profit: any interest,” large or small, demanded for the “use of money” as distinguished from payments for goods or services and from profit on trade. This is the strict original meaning of the word “Usury” and in that sense I use it here: interest on money or credit alone.

It is a strange thing that though Usury has been denounced as an accursed sin, a destruction of society, ever since human society has existed, it has in modern times been left alone, and, until quite lately, was not seriously discussed. It was taken for granted that Usury was quite natural and would do no harm. The ancient pagan philosophers denounced it; the Christian Church denounced it vigorously from the appearance of this Church until the Reformation. All our moral theologians have denounced it. And yet, for a time, after the seventeenth century, until quite recently, Usury was more and more accepted until it became a matter of course. Only when the enormous harm that it has done was beginning to be felt was the question raised again.

Now, Usury being the taking of interest on money merely “as money”, why is that wrong or harmful? Money is a social instrument devised for the exchange of goods. Its proper function is to work as currency. It does not breed. There is no natural profit attaching to it merely as money. If you keep it back from general circulation and take advantage of having it thus in your power and say to the man who needs to buy or sell “You shall not have this necessary currency unless you pay me still more money for the use of it” you are doing wrong.

The principle of taking Usury once admitted, Usury would end by eating up society. A few dollars lent out at compound interest for a few generations would demand a tribute more than all the wealth of the world could meet. A sum of money lent at 5 per cent doubles, at compound interest, in just over 14 years. The debt increases “a thousandfold” in 144 years; in 288 years “a millionfold!” In 432 years it increases “a billionfold”—one thousand million times! One cent put out at such interest when Columbus landed would now claim over $20,000,000.

But clearly you are doing no wrong if you put your wealth into some profitable enterprise and claim a portion of the profit thereon. That is where the confusion lies.

Supposing a man own a piece of land through which, deep down, runs a rich vein of copper ore. The amount of ore that could be extracted in a year’s labor would be worth, by the time he got it to the surface, $100,000. But to get it to the surface needs instruments and reserves of food and clothing and housing and the rest of it to maintain human energy while the ore is being extracted.

The owner of the vein had nothing. He gets a partner with $500,000 and his partner buys the required machinery and reserves of food, etc., so that the work can be undertaken. He bargains to halve, at the end of the year, the value of the ore extracted: that is, $50,000: one-tenth of the amount that he has put up as capital. The other $50,000 of ore is to be kept by the owner of the land. Year after year one goes on taking his share as capitalist. He is getting to one percent on his capital. But the other man has the advantage of “his” share, which he could never have had without the help of his partner. The contract is perfectly just.

Now suppose after 20 years the mine peters out. There is no more profit to be shared and therefore the original contract comes to an end from a lack of matter.But supposing the contract were worded so that the capitalist did not get his 10 percent as part of the profit, but got it as interest on money lent: not as instruments and reserves of food, etc., lent. Then he has a perpetual claim to $50, 000 a year, payable out of wealth that is not there. This is called “interest on the unproductive loan” and such interest is Usury. To pay that tribute the borrower has to get further and further into debt or to sell other wealth of his, until he is ruined; and that is how Usury eats up society.

Now when money claims interest “merely because it is money and without reference to the way that money is used,” a large proportion of the interest must always be interest on what has become an unproductive loan. Part of the vast sums paid to the money lenders annually represents real profit, real wealth, real goods. But part will always represent, if money lending instead of partnership is at work, interest on a loan which has become, or was from the beginning unproductive.

For instance, nearly all the great war loans demand interest on an unproductive loan. The money was spent in buying goods which were consumed, not in producing more wealth, but in producing no wealth—or even in destroying wealth. It went to support soldiers and sailors who produced no wealth and often actually destroyed wealth. It went to buy guns and ammunition which produce no wealth, but were actively employed in destroying wealth. You spend $100,000 in buying guns and ammunition for knocking down in war and industrial building which, in peace, produced $5,000 worth of wealth a year; and you go on asking $5,000 interest on the money represented by worn out guns, exploded ammunition and a factory that has been destroyed.

There are other ways in which the recognition of money’s right to interest, merely because it is money, eats up society, but this one major case of the unproductive loan is sufficient to show the evil that Usury does.

When money lending (“the providing of credits,” as it is called) carries interest as a matter of course, it is an activity which devours mankind.

~Hilaire Belloc: in Social Justice, April 18, 1938.

See also:

• Is Usury Still A Sin?, by Thomas Storck

• The Sin of Usury, by St. Thomas Aquinas

• Usury, from the Catholic Encyclopedia