poration were to enjoy internal peace, it was necessary that the most certain possible food supply be guaranteed for the largest possible number; that strongholds be erected and equipped; that the products of different localities be exchanged; that calculations be made and accounts kept; that roads be constructed, canals dug, and other means of transportation and communication by land and water provided; and it was necessary, too, that the religious tendency (which was at first complemental to politics) find expression through the establishment of priesthoods and rituals and the building of temples. All these and other necessities, which arose at various periods, resolve themselves in last analysis into a general demand for large and increasing quantities of labor products which take the form of capital. The drawing together of men into social bodies of increasing size depends largely upon the transformation of a part of the physical world into labor products which are not immediately consumed, but which are transformed into the various kinds of capital necessary to the development of society. Looking around us in modern society, for instance, it is plain that one of the most fundamental conditions of the civilized contact of large numbers of people is the existence of capital, vast in quantity and various in form. Recur for a moment to the dispersed condition of primitive men. Then consider the amazingly close physical and intellectual contact of people in modern society: Farming and village communities outnumbering in the space of a small county the tribes that once required a territory equal to New York State. Towns and cities containing their thousands, hundreds of thousands, and millions. Nations with scores of millions, peacefully touching borders with each other. A great civilization bound together by vast systems of transportation and communication by land and sea, and pulsing with the currents of a universal commerce both in things and ideas. There is no feature of this great social system that cannot be shown to rest immediately and vitally upon capital, vast in amount and various in kind. We employ the term "capital" in a broad sense, "material" and "spiritual." Material capital is physical tools -labor products, or wealth- used for the production of still more wealth from the earth's resources. Spiritual, or intangible, capital is order, law, social organization, habits of cooperation and steady work on the part of large numbers, general and special scientific and literary knowledge, etc. In order to project the idea of capital into the boldest relief, it is only necessary to contrast the condition of mankind in, say, England or the United States, with the general condition of mankind under the primitive, animal struggle for existence as outlined in a previous chapter. Under the former condition, men were set off like animals against unimproved nature. There were only two main factors to be considered: mankind, and the earth under their feet. In the language of economics there were only two elements in juxtaposition, Labor and Land. But looking around us in western civilization, the contrast is tremendous. Although each one of us has neither more capital nor more knowledge at the beginning of life than had primeval man, we are all born into a different world. We do not find ourselves in the midst of a situation which can be described under the headings "Labor" and "Land," or mankind on the one side, and the uncultivated earth on the other. We grow up in the midst of a world which contains an immense quantity and variety of capital, or tools, in things and ideas, according to the definitions already given. In the absence of capital, we should all find ourselves in precisely the condition of animals, or of early prehistoric mankind, as described in our sketch of the primitive struggle for existence. It is capital that enables us to live together in civilization and develop the earth's resources in support of associated human life. So that progress introduces a third factor, and we have to describe the progressive world under three captions, Land, Labor, and Capital, whereof the latter was at first lacking. The main proposition just at present is, that the increasing association of mankind which is revealed by history is founded upon the production of increasing amounts of material and intangible capital. More formally and technically stated, the integration of society rests upon a concomitant integration of capital. It is a familiar fact that all kinds of undertakings in which we engage have to be provided with the things, or means, or agencies, for carrying them through. In brief, all of our undertakings have to be capitalized. Now, social development as a whole is to be regarded as the Great Undertaking of history; and a careful analysis of the situation shows that the conception commonly applied to the smaller aspects of life should be extended to the whole process by which civilization evolves out of animality. Social development as a whole is a process to which the conception of capitalization preeminently applies. If this point is not at once apparent in all its bearings, let it also be assumed. § 23. These perhaps tedious propositions about cleavage, integration, capitalization, etc., will now possibly begin to fall into a logical sequence. The foregoing treatment has prepared the way for the following thesis, upon which this examination turns: Social cleavage is one of the principal factors in the capitalization of social development,* The advance of mankind from the scattered, nomadic, animal condition into settled social bodies of increasing size has rested upon the use of huge quantities of labor products, both in the form of diverse material capital, and in the form of immediate support for personal ministers *We have concluded that this formulation of the main thesis is better than that used in The American Journal of Sociology for May, 1902, p. 766. We there used the formula "Social cleavage into upper and lower strata has effected the capitalization of social development," qualifying it as on p. 767, 1. 32 f., and p. 794, 1. 24 f., and thus giving it the force of the statement employed in this book. to such intangible social needs as those of order, law, administration, general science, cooperative training, organization, etc. Directly or indirectly, all social necessities resolve themselves into a demand for large and increasing capital. This is produced, not by the free cooperation of "individuals" in the conventional economic sense, but by a vast, unconscious cleavage within society itself. The phenomenon of cleavage is cosmic. It appears with the same inevitableness as the phenomenon of rain when atmospheric conditions are favorable. It is not established as the outcome of any far-seeing human plans. It is the issue of selfishness, moving on the lines of immediate pleasure and avoidance of pain, and without anticipation of good to posterity. Although capital freely takes the industrial and commercial form during the earlier stages of social development, the growth of large industry awaits the accumulation of intangible capital. Thus, the earlier of the great historic civilizations the oriental and the classic show a comparatively backward material development. But western civilization, with its energies freed from the pioneer work of spiritual beginnings by a rich heritage from its predecessors, has more promptly turned its capital into the material form; and within a period comparatively short, as contrasted with the chronology of the ancient civilizations, has developed a more balanced social system than the world has ever seen, conserving alike the material and spiritual forms of capital. - Everybody who thinks about the subject in a competent way knows that social development rests upon the use of large and increasing quantities of capital, and that without it society would disintegrate (1). But capital, like air, is such a pervasive commonplace that we are prone to take it as a matter of course, and think little about it. Economists have, indeed, given a specialized attention to capital in its material forms, considered as a "factor in production;" but they have looked at it al most exclusively in an abstract, a priori way, largely ig noring its actual genesis in their formal treatment.* Economic treatises tell us that capital originates in "the saving of wealth." Professor F. A. Walker, for instance, in his Political Economy (Book 2, c. 3), imagines in some detail the transformation of a rude, poverty-stricken tribe into a community well stocked with capital, in which manufactures have sprung up, and wherein resides all the potentiality of a modern nation. The illustration is adduced for the purpose of showing that capital "stands always for self-denial and abstinence," and "arises solely out of saving." But this is true of actual human society only in an abstract sense. The average student would acquire a naive conception of capital from an exposition like Professor Walker's. We are correct in saying that capital originates in the reservation, or saving, of wealth in the same sense that we are correct in declaring a steamboat to be propelled by the power of steam. Both statements are true; but neither statement satisfactorily reports the truth. The mere knowledge that a steamboat is moved by the power of steam does not tell us how the thing is done. Likewise the mere knowledge that capital arises out of the saving, or reservation, of wealth carries with it no understanding of capital as a concrete social fact. If the present interpretation is correct, the history of capital is but slightly influenced by conventional ideas about abstinence and self-denial; and the practical work of social * In partial qualification, cf. MILL, Principles of Political Economy, Bk. 1, c. 5, sec. 4; ROSCHER, Political Economy, sec. 45; HADLEY, ECOnomics (New York, 1896), p. 30, where the truth is squinted at, and passed by. Cf. sidelight in BоHM-BAWERK, Positive Theory of Capital (Smart's trans.), p. 103, note. Cf. also some clear observations in MAYOSMITH, Statistics and Economics (New York, 1899), pp. 455, 456; and in a paper by MR. HADLEY in Volume 9 of the publications of the American Economic Association, at page 560. A foreshadowing of this conception is presented by MARX, Capital (New York, 1889, Engel's trans.), c. 24; but it is not applied to society considered as an evolution out of prehistoric anarchy; and the historical treatment is unsystematic and inaccurate. These drawbacks, however, only reflect the difficulties under which MARX wrote. |