In countries like the United States, where the capitalist system of production prevails, the masses of the people are forced down to the condition of proletarians, that is to say, of workers who are divorced from their instruments of production to the extent that they can produce nothing by their own efforts, and are therefore compelled, in order to escape starvation, to sell the only commodity they possess – their labor-power. To this class virtually belong, in fact, the majority of the farmers and small producers and merchants; the little property they still possess is to-day but a thin veil, calculated rather to conceal their dependence and the exploitation to which they are subjected than to prevent these; any little gust raises and carries away the veil.
Over against this class, we find a small crowd of property-holders – capitalists and landlords – who alone own the most important machineries of production and the most important sources of livelihood, the exclusive ownership of all of which invests them with the power and the ability to subjugate the propertiless class, and to exploit them.
While the majority of the people sink ever deeper in want and misery, it is this small band of capitalists and landlords alone, who, together with their parasites, appropriate all the prodigious advantages that have been wrung from nature, especially through the progress made by the natural sciences, and their practical application.
Let us take a closer look at this select band; let us observe the role it plays in the economic life or society, and the results therefrom upon society.
There are three sorts of capital: merchants’ capital, usurers’ capital, and industrial capital. The last of these is the youngest; it is not as many centuries as the other two are thousands of years old; but the youngest of these brothers has grown faster, much faster, than either of his seniors; he has become a giant, who has enslaved and forced them into his service.
in its classic form, small production was not dependent upon commerce. The farmer and the mechanic could acquire the means of production, in so far as they needed any, direct from the producer; furthermore, they could sell their product directly to the consumer. Commerce, at that stage of the economic development, catered especially to luxury; it was not then a matter of necessity, either for the promotion of production or for the support of society.
Capitalist production, however, is from the very start thrown upon commerce, and vice versa, from a certain stage on, commerce needs capitalist production for its further development. The further the capitalist system of production extends, and the more absolute it becomes, the more requisite is the development of commerce to the whole body economic. Commerce to-day no longer caters simply to superfluity and luxury. The whole system of production, yea, even the sustenance of the people in a capitalist country, depends now upon the tree and unrestricted action of commerce. This is one or the reasons why to-day war is more devastating than ever; it interrupts commerce, and that has become tantamount to a stoppage of production, to a suspension of economic life, and to an industrial ruin that spreads beyond the field of battle, and is not less mischievous than the devastation that takes place there.
As important as the development of commerce, is the development of usury to the capitalist system of production. In the days of small production, the usurer was simply a leech, who profited by the distress or the improvidence of others to suck their blood. The money which he loaned to other’s was, as a rule, put only to unproductive uses. If, for instance, a nobleman borrowed money, he did so to spend it in debauch; if a farmer or a mechanic borrowed money, it was mainly to pay his taxes, or some other government dues; neither, as a rule, needed originally any money for productive purposes: they owned their own instruments of production, or acquired them by barter. In those days, interest was considered immoral, and was everywhere condemned.
Under the capitalist system of production, the thing takes on another aspect. Money is now a means whereby to establish a capitalist industry, to buy and to exploit labor power. When a capitalist raises money to-day in order to establish a factory, or to enlarge one already in existence, it does not follow – provided, of course, his undertaking prosper – that his previous income will be reduced by the interest on the loan. The loan, on the contrary, helps him to exploit labor-power, consequently, to increase his income by an amount larger than the interest which he will have to pay. Under the capitalist system of production, usury loses its original character. Its role as a means for the exploitation of distress or improvidence is pushed to the rear by a new one: that or “fructifying” the capitalist system of production – that is to say, to enable its development to proceed faster than it otherwise would by the mere hoarding of capital in the vaults of the industrial capitalists. From that moment, the horror once entertained for the usurer comes to an end; he now becomes a spotless character, and he receives a brand new and euphonious name: CREDITOR.
Simultaneously with this metamorphosis, the principal current of interest-bearing capital underwent a wonderful change. The moneys, which the usurers heaped up in their vaults, flowed formerly out of that reservoir, through a thousand channels, into the hands of non-capitalists. To-day, on the contrary, the vaults of the usurers. the institutions of credit, have become the reservoirs into which there how, through a thousand channels, moneys from non-capitalists, and out of which these moneys are then conveyed to the capitalists. Credit is to-day, just the same as it was formerly, a means whereby to render non-capitalists – whether property-holders or propertiless – subject to the payment of interest; to-day, however, it has furthermore become a powerful instrument wherewith to convert into capital the property in the hands of the various classes of non-capitalists, from the large estates of endowed institutions down to the pennies saved by servant girls and day-laborers. In other words, it has become an instrument for breaking up the former, and for the intensified exploitation of the latter. People praise the present institutions of credit, savings banks, etc., upon the plea that, as the praise-singers of the present social order claim, they turn the small savings of the workmen, servant girls, and farmers into capital, and these unfortunates themselves into “capitalists.” Nevertheless, the only object in collecting the moneys of non-capitalists is to place at the disposal of capitalists an increased quantity of capital to the end of accelerating the development of the capitalist system of production, in the shape of loans to capitalists whereby these may “improve” their plants. What this, however, means to wage-workers, small farmers, mechanics, and small producers and merchants is their ruin. In proportion as the capitalist system of production develops, the small man goes by the board, workingmen are displaced, and the condition of the working class declines. In a word, the class of the proletariat swells.
At the same time that the present institutions of credit are intent upon converting the whole property of non-capitalists into capital, and to place it at the disposal of the capitalist class, they see to it that the capital of the capitalist class itself is better utilized than before. They become the reservoir for all the moneys which the Individual capitalist may, from time to time, have no occasion to use, and they make these sums, which otherwise would have lain “dead,” accessible to such other capitalists as may stand in need of them. Furthermore, they make it possible to convert merchandise into money before it is sold, and thereby to diminish the quantity of money capital that may be needed at a given time in a business undertaking.
Through all these means the quantity and the power of the capital at the disposal of the capitalist class is enormously increased. Hence it is that credit has now become one of the most powerful levers of the capitalist system of production. Next to the great development of machinery and the creation of the reserve army of unemployed labor, which the capitalist class conjures into existence for the purpose of keeping the employed in a manageable frame of mind, credit is the principal cause of the rapidity with which the present system of production is carried on, and which enables modern production – whether industrial or agricultural – to shoot up and develop mightily, responsive to the slightest pressure.
Credit is, however, much more sensitive than commerce to any disturbance. Every shock it receives is felt throughout the body economic.
Many an alleged political economist has looked upon credit as a means whereby people without any, or with little, property could be turned into capitalists. But as its name indicates, credit rests upon the confidence of him who gives in him who takes credit. The more the latter possesses, the greater is the security which he offers, and the greater is the credit which he enjoys. Consequently, credit is only a means whereby more money may be furnished to the capitalists than they possess, thereby increasing their preponderance, and drawing sharper the social antagonisms, instead of weakening or removing them.
To sum up, credit is not only a means to develop the capitalist system of production more quickly, and to enable it to turn to use every favorable opportunity; it is also a means to promote the downfall of small production and trade; but last (though not least) and significant enough, it is a means to render the springs of modern industry more and more complicated and liable to disturbance, to carry the feeling of uncertainty into the ranks of the capitalists themselves, and to make the ground upon which they move ever more shaky.
Last updated on 25.12.2003