1890-91.] TWENTY-THIRD MEETING. 41 



capital on the industrial and commercial conditions of society ; its aim 

 is to enquire how such^fortunes have been accumulated, and, assuming 

 that a more equable distribution of wealth would be an improvement, to 

 point out how this can be effected. " Capital," using the term in the 

 sense assigned to it above, is the result of the operation of some general 

 principle or law in economics. There is nothing like unanimity 

 amongst economists as to either its origin or its nature. The older 

 economists generally concurred in attributing its existence to " abstin- 

 ence" or " saving," This was the view of Smith, Senior, and Mill. To 

 some extent it accounts for the existence of " capital," but it does not 

 account for the massing of it in large quantities in few hands. Men 

 like Jay Gould, Vanderbilt, Huntington, or Rockefeller do not " save " 

 to any appreciable extent. They spend on themselves as much as they 

 can personally consume, and indulge in luxuries of the most costly kind, 

 and yet their wealth goes on increasing with enormous rapidity. As 

 that wealth is employed in production it is practically all capital, for 

 each of these men is an active producer. Something more than mere 

 abstinence is necessary to explain the accumulations of capital. Karl 

 Marx endeavours to explain the phenomenon by what is called the 

 " surplus-value" theory. Every commodity when produced has either 

 use-value or exchange-value, or both. Use-value depends on the value 

 of the raw material and the value of the labour expended on it, and the 

 commodity ought to equal in value the sum of these two values. But it 

 ordinarily exchanges for more than this, and this additional amount is 

 called "surplus value" (German '' Mehriverih"). The conditions of 

 capitalist production, with which all are familiar, enable the capitalist to 

 appropriate this surplus value without sharing it with the labourer, who 

 is reduced by the iron law of competition in wages to working for bare 

 life. Without going into the ingenious analysis of Marx in detail, it is 

 sufficient to admit here that it has shed valuable light on the source 

 from which masses of capital are drawn and the processes by which they 

 are collected. All this, however, does not yet explain the phenomenon 

 of the enormous fortunes made by individuals in our own day, so much 

 more frequently than they were made a few years or a generation ago. 

 It is alleged of some great capitalists that they make money by 

 dishonest devices, such, e. g., as depreciating the shares of a railway, 

 buying them up, and then appreciating them — restoring to them their 

 original value or more. This practice may, probably does, explain some 

 of the cases, but not all. The enormous accumulations spoken of seem 

 to be due chiefly to two causes : (i). Monopoly of opportunity, and (2),. 

 the law of inheritance. Given a limited range of opportunity to produce 

 some article that is in general demand, with the control of this oppor- 



