ELEMENTS OF POLITICAL ECONOMY.

Otago Daily Times, Issue 14441, 6 February 1909, Page 4

ELEMENTS OF POLITICAL ECONOMY.

No IV. Bv 11. D. Bedford, M.A. (Lecturer on Political Economy, Otago University). CAPITAL. Ca.pl itd is a hard term to define. Volumes hnv6 been written in the attempt, without leading to tinaramily amongst economists. The popular idea of capital has lieon well expressed as that. ]>art. of a. man's wealth from which he expects to derive an income. This is a sufficiently accurate definition from the point of view of the individual. It makes olour the distinoiion lv>tweeu that portion of a man's wealth which he designs for consumption and that portion which ho invests in trade or otherwise with a view to further gain. The jewellery which a man's wife ream upon her fingers is not capital, but the jewellery which lie has in his shop for sale ie. ITS FUNCTION". This anahfHs of capital, however, in no way elucidatrs the grand function it performs s,s an agent, of production. Without any attempt, at preeise definition let us adopt the mere illuminating course of explaining 1 tJlis function. All our effort ami striving in the world of l/j.-i is for goods to eoiisume. Ik! effort is iricsome, and ws desire to reduce j; to a minimum consistently with securing Hie desired end. There are various ways of getting our wants eaiisfiod. Man in his meat primitive stage used to foil from tire Ricks, a;nd the satisfaction of his daily appetite depended upon his daily ratcli. Fishing, however, is precarious, juhl wine davs there was a surfeit and some days a dearlih. Soon, upon the darkened mind of the savage, dawned the wisdom of drying and laying an:de the su|iert!uity of one day to meet the tiocd of another day. But 'foresight v;>-!!■; further, ami the more intelligent. began to save and gather a large store of dried fish, suilicie.nt to supiiorl fliem for weeks or montta at a. time. Taking this store with them, 'ihey went into the bush and hollowc-tl out the t.mbk of a. tree into Hie form of u boat. Thus equipped, tliey gained an imuicifce advantage in felling over their fellows. Tlieir daily talxMH' became now immeasurably more productive, ami as they were able to go in smirch of the tish, there was less risk of their empty-handed. That boat way capital. It was a rovtxhbotri way ot fishing first, to make a Kiit,' but in the end it was imidi mote economical than t IUI direct method. Ultimately it represented a very great saving of hi.bour, and it nußl, be rnmpmlmil' that wJiat. the savages wanted was not. kdx>ur but fish.

An eminent Austri-,m, JJc.hm-Bawerk, has ivoiKVrfiillv clarified our cuflMption oi capital as a nw«.ns of mnltiplting the cflie'eiwy of lahoiw. Take a ronpl* ( -.f hn lucid examples; "A jvii.'TDnf requires lirinki«K waiCT. The spring is urn*. distance. ftt)ni N'B llOUtf-O. 1 lio W ?, ro V.'JI.YS ill which he may supply his daily warns. I'ir.q, ho may go lo ihe spring each time he is Miirssiy, and drink e.nt. of his hoilow«l hf-ml. This fe t.be most direct. way; i'sltsfaction follows imiitetMa-My on exert:<m. 15-:!. :i is an uiconveuiont wav, for our peasant has lo take his wav lo th'p'well Overj Mttio lx> is thirst y. ,\u \ il. is an in-sufficK-nt way, for lie B n eever collect and store any great (pianvity such as ho ro qmrfs for various other purpo-w Second, Ikv may lake a ky e-f wood. hollow it 0111 into a kind 0 f„ pail, and carry "V "" c "l ml - v from ™r. ; ng to In* cottage. The advantage is ohvious', but it necessitates a roundabout wav of wnsMwrahlo knglh. Tim man must spend perhaps ,i._ <!«,)• in cutting out ihe jiail; before doing so he musi haw felled a tree m the forest; to do this again ho must havemade an axe, and so on. lint there is ati I a third way; instead of foiling one 7,' 1,0 , lls 11 "'""''"l' of trees, splits and hollows them. lays tlieni end foAcnd and so constructs a runnel or rhone which brings a lull head of water to his cottage. Here, obviously, between the expenditure, of the lalwur and the obtaining of the water we have a very roundabout wav, but then the result- is ever .so much greater. Our peasant needs no longer take his weary way from house to well with the hed\y lhi.il Oil Ills shoulder, and yet he has a constant and full supply 0 f the freshest water at Ins wry <Uor." Another example. ;i I require stone for building a house. There is a rich vein of excellent sandstone in a neighbouring hill. How is it to he got out? First, i n;av work the loose stones buck and forward with my bare lingeis, and break oil what can be broken off. This is the most direct, but also the least productive, wav. .-Oconu, 1 may tak*> a piec.* of iron, mata n. liamnier and chisel out of it. and iise tneni on ihe hard stone-a roundabout wav, wliicii. of court-e, loads to a verv much heller result than ihe former. Third method: Having a hammer and chisel 1 u«i them to drill a hole in the rock; nexi 1 turn my attention to procurim; charcoal, sulphur, and nitre, and mixing ! in in a. powder, then .1 pour the powder into the hole, and the explosion that follows splits stone into convenient pieces -sl'il more of a raumlxlxiut wav, but one winch, as experience .shows, is' « s , m , c |, superior to the second wav in result as the second was to the first."' lake, now. an example, where without the ompkrynioiit of a large amount of capital -or m other words, the adoption ot a very roundabout wav of production - it were impossible to oblain iho object, [ red; "I am short-sightal and wish to have a pair ol spectacles, li'or this I require ground and polished glasses and a steel framework. But all that. Nature ofl'eis to the end is silicious earth and iron ore. How am I to transform these into spectacles. Work as 1 may it is a* impassible for me to make spectacles dircctly out of silicious earth as it would be to make the steel frames out. of iron ore. Here there is no immediate or direct method of production. There is nothing for it but lo tal;» the roundabout way. and. indeed. a verv roundaliouf. way. I _,„iist. take silicious earth and fuel, and build furnaces for smelting the glass from the silicious earth, the glass thus obtained has to be carefully purified, worked, and cooled bv a series of processes; finally the glass'thus prepared again by means of ingenious instruments carefully constructed beforehand -is ground and polished into Ine lens (it. for short-sighted eyes. Similarly 1 must. siiJC'lt iho ore in (lie blast fnrmico, change the raw iron into steel, and make tile frame therefrom -processes which cannot be carried through without a long series of tools and buildings that, on their part again, require great amounts of previous labour. ' J'hus bv an exceedingly roundabout way the end is attained."'

CAPITAL AND THK ENEHGIItfi OF NATCKE. Ibis is capitalistic production. It is something more than applying the accumulated results of past labour to the assistance of present laliour, 11, j s a means of throwing inncli of the burden of production on Nature and mitigating that "curse" which was pronounced upon Adam. When the savage fishes from hit, lioat if is the force -of Nature which buoys it op and enables htiri to propel it through the sea. When the peasant brings the water |<> his cottage along tile runnel it is the law of gravitation which causes the continual How. The world around its is endowed with ft vast number of powers which are ceaselessly at play. Gravitation holds all things fast to the surface of the earth; causes the rain to fall and the rivers to roll to the sea The sun, by its light and heat, creates the magic of vegetation. Nature abounds in ejeclrical, chemical, awl mechanical energies. These represent the "productive endowment of humanity." Capital enables us to make these transcendent forces allies of laliour. By it man, in his weakness ami clumsiness onlisis powers stronger and more cunning than the human hand. So the more eapftilistic production becomes the more tho limits of human possibility are extended. Capital is the condition precedent of progress. Without it we could not have emerged out of liarbarism. Had it not ct.lilfi with its aid, tlic elements of Nature must have remained unharnessed to man's purposes. It is true it economises and o.'ten difpenses will: labour, but a weary world will scarcely consider that ail evil so loni? as the fruits of labour are not. only undiminished, but augmented. If tho us'o of capital, while increasing wealth, deepens the poverty of. a claes of men. then the fault is not, with capital, but with the laws of distribution. The essential nature then of capital is its product,ive*K®. It is a gionp of products of past labour'dCWined to ',?rve towards further and more abundant production. It is a means of lessening t/ho strain of toil and immeasurably augmenting its fruitfuliiess by bringing the elements of Nature into closer co-oporation with men.