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 city was granted in the grounds of Groote Schuur; £500,000 towards buildings and endowment being provided mainly from bequests by Sir Julius Wernher and Mr. Alfred Beit. In 1912 a Rhodes memorial was unveiled at Groote Schuur by Earl Grey (a former director of the Chartered Company). In front of the memorial, a granite temple in the Doric style approached by a flight of steps, is the equestrian statue of “Physical Energy” by G. F. Watts. In the temple is a bust of Rhodes. Not far from Rondebosch, at Kirstenbosch, are the National Botanical Gardens, established 1913. In Oct. 1918 Cape Town suffered from a great epidemic of influenza, 7,000 deaths occurring in three weeks. In the autumn of 1919 influenza, but in a milder form, again ravaged the city. Cape Town has since 1913 ranked second in importance to Durban among South African seaports, but it is first for passenger traffic. The shortage of shipping did not greatly affect Cape Town until 1918. In that year the total tonnage of cargo landed, shipped and transhipped at Table Bay was 1,070,000, the average for the three previous years being over 1,440,000 tons. In 1918 the net tonnage of shipping entering Cape Town was 2,347,000—British, 1,662,224; foreign, 684,776. In 1919 British shipping had increased to 2,253,000 net tons, while foreign shipping fell to 424,000 net tons. In 1918 the ratable valuation of Cape Town was £21,258,000, municipal revenue £778,000 and indebtedness £4,893,000. In 1919 the ratable valuation was £23,343,000.

Direct communication with the railways of the S.W. Protectorate (ex-German S.W. Africa) was opened in 1915 and in 1918 the railway going north had reached Lualaba (Upper Congo) at Bukama, a distance of 2,598 m. from Cape Town without break of gauge. An aerodrome on the trans-Africa air route was laid out at Young Field, Wynberg, in 1919, and the first airmen to cross the length of Africa, Lieut.-Col. Sir H. A. Van Ryneveld and Flight-Lieut. Sir C.J.Q. Brand, arrived at Wynberg on March 20 1920. A wireless station at Slang Kop, 18 m. S. of Table Bay, was opened in 1911. It has a normal range of 450 m. by day and 1,500 by night.

CAPITALISM.—The meaning of “capital,” in economics, is analyzed in the earlier article under that heading (5.278). But the working of “capitalism” or the “capitalistic system,” as such, had by 1921 become so highly controversial a question as to require here more detailed examination.

The term “capitalism” is generally applied to the system under which the instruments of production are the property of private owners, who usually employ managers and manual workers to carry out production by their means. By production we must include, if this definition is to be correct, the whole of the process by which raw materials are brought to the place of manufacture and worked up into manufactured goods, and the manufactured goods are then distributed to the places where they are wanted and sold to the final consumer through the hands of retailers. The instruments of production thus include not only the land, factories, tools and machinery, and other equipment used in actual manufacture, but the railways, ships and other means of transport, and the warehouses and shops through which the goods finally pass to the consumer.

Private Ownership.—Private ownership of the instruments of production has not been universal in man's economic history, but it has been generally adopted by progressive communities. When “Adam delved and Eve span,” they were “capitalists” in the sense of owning a spade and spinning-wheel and using them for purposes of production; but they used these tools themselves and for the purposes of supplying their own needs. And at a very primitive stage of society, this simply individualistic system by which the capitalist used his own tools and worked for his own needs may be presumed to have been common. When, however, by the development of a wider society the division of labour and the exchange of goods between one member and another of the community began to be practised, the new feature arose by which the producer made and grew goods not only for his own use, but to be exchanged for goods grown or produced by others; and consequently he had to produce something which somebody else wanted if he wished to provide for his own needs to his own satisfaction. Thus we find in the Middle Ages artificers and craftsmen owning their own tools, that is to say, their own capital equipment, and working to produce articles such as armour, farming implements and clothes which they exchanged in return for the food produced by the farmers who would only take the goods produced by the artificers if they were of a kind which pleased their fancy. It is important to note at the outset that the capitalist, whether he works with his capital or sets others to work with it, must invariably direct the work done so as to suit the wishes of a buyer which may or may not be expressed before the making of the article is begun. Capitalism, in the sense of a private ownership of tools and equipment, thus dates from the earliest organization of human economic activity. As soon as a savage had given time and labour to fashioning a weapon with which he could more easily kill or catch animals that he hunted for food or clothing, he had become a capitalist; he had made something which would help him to provide for his own needs and those of his dependents more easily, or by which he could more easily acquire commodities which he could exchange against those owned by other members of his tribe. But capitalism in the modern sense, and as defined above, is usually said to date from the last quarter of the i8th century, when what is called the “Industrial Revolution” began, and by the inventions of machinery and the use of steam industry was reorganized on a new basis.

Capitalist and Worker.—Owing to these developments it was no longer possible for the workman using his own tools and working in his own home to compete with workmen who were assembled in a great factory and worked with machinery which it would not have been possible for their collective resources to buy. Thus arose the distinction between the worker and the capitalist, which had in effect already made considerable progress before the introduction of machinery, but was so rapidly developed after it that modern capitalism is usually so dated. By this system the worker, by which is generally meant the manual worker, is said to have been divorced from the ownership of his tools. The scale of industrial organization became so great that it was only possible for men of great means, or for a collection of people of considerable means, to provide the necessary land, factories and equipment for its working, and also to buy the large quantities of raw material required, to pay the wages of the multitude of workers and managers, and to finance the other expenses during the process of production and up till the time of payment by the final purchaser.

Originally it was usual for the owners of these factories, whether individuals or small bodies working in partnership, to act as managers of the whole concern. The capitalist was at once owner of the factory and machinery, provided the money needed for the financing of the industrial process, and managed and organized the whole enterprise. He was responsible for buying raw materials, paying wages and selling the product to the greatest possible advantage to the other capitalists, merchants and middle-men, who passed it on until it reached the final consumer; he, singly or in partnership, took all the risk of loss involved if the product failed to suit the caprices of the buying public, and took all the profit, if any, that was earned from the enterprise. This profit thus included interest on his money invested, the payment of his salary as organizer and manager, and any extra bonus which his skill might enable him to earn as compensation for the risks run.

Joint Stock System.—As industry developed on a still greater scale it was not possible for this comparatively simple organization to be maintained. When it became a question of building railways, requiring hundreds of millions to finance them, no individual or partnership could supply the necessary funds, and so the joint stock system, which had already been developed on a small scale in mediaeval times, was extended so successfully to industry that the greater part of our industrial activity is now carried on by means of joint stock companies, the extension of which was enormously facilitated by the introduction of the principle of limited liability. Thus the position of the capitalist has become still further defined and differentiated. It is certainly probable that the managers of most of our great industrial concerns hold a certain number of shares in the business which they conduct, and to that extent may be described as capitalists, but the two functions are now quite distinct. The capitalist pure and simple lends money to industry or invests it in industry, using industry in the widest sense of the word to include transport and commerce. The actual management is carried on by officials appointed specially for this purpose under the supervision 