Daniel De Leon editorial : What is Capital?

What is Capital?
by Daniel De Leon
Originally published in the Daily People, September 18, 1913
Scanned from the reprint in the Weekly People, January 23, 1971


A correspondent writes:

"I encounter much confusion on what capitalism means. Prof. Seligman in his book on economics says: 'Capital would then be defined as that part of wealth which is the result of production devoted to further production.' That looks pretty clear to me. Is the definition good?"

The definition is bad. It is bad because it is defective. It is defective in that capital being a social phenomenon, its social "setting" is a necessary part of its definition, and the social "setting" is omitted from the definition.

The blacking, blacking-box and brushes of the shoe-black are "a part of wealth which is the result of production devoted to further production." So is the ax of the frontier settler who clears his own allotment; so is the needle, and the sewing machine to boot, of the housewife who makes her own dress, and mends the clothes of her family. All of these are "a part of wealth which is the result of production devoted to further production." If, in order to qualify as "capital," a thing need no more than prove that it is a "part of wealth," that the wealth which it is apart of was "the result of production," and, thirdly, that itself is "devoted to further production, ' then the bootblack's brushes, blacking and box, the housewife's needle, the pioneer settler's ax, are all "capital" -- and by the same token "capital" would have existed from the day when the first savage, moving from the Middle, entered upon the Upper, Status of Savagery by using the bow and arrow-a part of wealth which was the result of production and was devoted to further production. Of course the bow and arrow were not capital, and, by the same token neither are the blacking, brushes and box, nor the needle and sewing machine, nor the ax, in the above illustrations, capital. *

What is that token? The circumstance that they were and are used by their owner, himself or herself; hence, that the "further production" which they serve and to which they are devoted is directly the property of their owner.

The social "setting" of capital is the existence of a layer of population that neither has nor enjoys the opportunity to acquire, any part of "wealth which is the result of production and which can be devoted to further production." When society has developed to the point that that layer of population appears upon the social stage, then "that part of wealth which is the result of production and is devoted to further production" ceases to be operated by that other layer of the population which is in possession of it; "that part of wealth," etc., is then allowed by the social layer in possession of it to be operated by the social layer that is not in possession of it; with the final result that the social layer which is not in possession of "that part of wealth," etc.. is is compelled, in consideration of the opportunity to earn its own living, to allow itself to be exploited by earning also the living of the social layer which is in possession of "that part of wealth," etc. In the measure that the social setting of capital becomes more pronounced, capital itself develops, and the two - social setting and capital -acting and reacting upon each other, the social stage is reached which becomes typical of capital, the stage when society is divided between the capitalist class and the working class.

Accordingly, the definition of "capital" is: "That part of wealth which, first, is the result of production; secondly, is devoted to further production; and thirdly, enables its holder to use it, and is used by him, in ways and manners that exploit the producers."

Truth is that which fits all the facts. Prof. Seligman's definition of "capital" does not fit all the facts.


Footnote in the Weekly People, January 23, 1971


* Karl Marx in "Capital" gave footnote mention to a "discoverer" of the "capitalist" character of a savage who is allegedly a "capitalist" because his bow and arrow, or the rock with which he kills animals for food, constitute "capital." Even the capitalist economists of the time paid little attention to this "discovery." The capitalist economists of today pay as little attention to the newer proclamations of the "discovery" that primitive weapons and tools were "capital" and that, therefore, capitalism is as "old as man."

But if the capitalist economists pay little attention to such claims, other capitalist propagandists do. An unsuccessful playwright, who took courses in anthropology while he was at college, Robert Ardrey has made a big financial and propaganda thing out of his claim that even animals and birds, in the sense that they protect their breeding territory from others of the same species, are capitalists. The effort is made to "prove" that property is "natural" and that capitalism has the sanctity of antiquity behind it. Actually, mankind lived communistically for the greatest part of its existence. Private property, as opposed to communal property, came into being within mankind's known historic period. Capitalism, as such, and not as it is imagined, developed under our immediate ancestors' eyes.