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 ideal conditions. The main point to grasp, however, is obvious, whichever of these presentments is thought preferable. Capital, under our present industrial system, is the result of unpaid labor—a matter to be further considered later in this essay. But it must be remembered that, as a matter of fact, the profit made by the capitalist is not a fixed quantity, as is the "surplus value" of Marx; but that the capitalist not only preys on the worker, but also on the necessities of the consumer, his profit rising and falling with the changes of demand and supply. The phrase "surplus value" is, as I have said, a convenient one, but it might well be extended to cover the whole difference between the price paid to labor for the commodities it produces, and the price obtained for those commodities by the capitalist employer of labor. It is in this wide sense that the phrase is used in the following pages, not in the metaphysical sense of Marx.

We are now in a position to understand how large fortunes are made, and why Capital and Labor are ever at war.

Before the commencement of the Industrial Period—which may be fairly dated from the invention of the Spinning Jenny in 1764—it was not possible to accumulate great wealth by the employment of hired labor. By handwork, or by the use of the very simple machines available prior to that date, a single operative was not able to produce sufficient to at once support himself and to largely enrich others. "Masters and men" consequently formed a community of workers, without the sharp divisions that now exist between capitalist and "hands"; and the employer would have been as much ashamed of not working deftly at his trade, as the son of a Lancashire cotton-lord would be if he were suspected of throwing a shuttle in one of his father's looms. Under these conditions there was very little surplus-value to be absorbed, and there were consequently no great aggregations of purely industrial classes. The introduction of machinery multiplied enormously the productive power of the operative, while it did not increase the wage he received. A man receiving 3s. for a day of twelve hours, produced, we will say for the sake of illustration, surplus-value to the amount of 1s.; after the introduction of machinery he received the same wage and produced an enormously increased surplus-value.