CAPITAL.

King Country Chronicle, Volume XXXII, Issue 4731, 21 December 1938, Page 7

CAPITAL.

(To the Editor.)

Sir, —In the everyday conversation which one has with his fellows, the ignorance which prevails as to what, in the first analysis, are the main essentials to wealth production, is abundantly evidenced. Quite recently I was informed by a man in the street economist, that “brains, capital and labour” were the main essentials in this connection, and I replied that of these three factors labour alone was the only actual necessity.

In a complex state of society such as exists to-day it is very difficult for the ordinary lay student of economics to see clearly just how wealth is produced, and the giving of undue importance to what is termed capital is where the superficial thinker is liable to be led astray. Let us visualise a country where' as yet modern civilisation has not made many inroads, and which is populated by a few early settlers. How are they to produce the wealth necessary for their existence? The store from which they are to draw is the land. This contains (and always has contained) the natural resources which constitute the basis of all wealth. The application of human endeavour to these resources will supply all the wealth necessary to the well-being of the few people, and if, when produced, it is distributed to the needs of each and every one of them, in just proportion as to the services rendered in its production, they will constitute a happy and contented society. Now let us consider what effect is obtained when brains (orthodox business brains, of course) are introduced into this happy and contented society. One of them, probably not a very good manual worker, evolves an idea that an individual profit for himself can be obtained if his superior intellect is used to such end. He undertakes to supervise the production and distribution of all wealth, telling his fellows that he has special capabilities for the purpose, and convincing them that for such special service he should be granted a rake off in the shape of profit. In a very short time the position develops, in which he, the master mind, has through gradual accumulation of profits, reached a state where he has a fund stored up in excess of living requirements, and this store he calls capital. He then proceeds to lend this capital to his fellows so that the production of wealth can be accelerated and his rake off further increased in the shape of interest, which must be paid out of the wealth which his fellows go on producing. This illustration has, I think, now been carried far enough to show that this Capital which is considered so

essential is after all only produced wealth which instead of having been distributed amongst those who produced it, has been filched by the master mind of Capitalism, and used as a lever for the continued exploitation of the real producers. For centuries past the workers have acquiesced in this system of capitalistic control, believing that it is essential to the well-being of society, but of late years many of them are beginning to see that they have been duped and are starting to protest. The Socialistic idea is gaining ground in the mind of the masses. They contend that the just control of the production and distribution of wealth can only operate under a system in which the members of society co-operate both with hand and brain to produce what wealth is necessary to . their well-being, and distribute it so that the needs of each and every member are met. This ideal can never be attained so long as private profit is allowed to continue. All the activities of society in the realm of production and distribution must be controlled by the state so that the interests of each member may be justly safeguarded.—l am, etc., G. DINNISON.