The Word Foundation


Harold W. Percival



These two words, capital and labor, have increasingly agitated and bewildered the head-laborers and the hand-laborers until they have disturbed governments and are dangerously unsettling the social structure of human life. The two words are often made to stigmatize and to drive human beings into opposing groups; to anger them and to set them against each other as enemies. The two words breed hatred and bitterness; they stir up strife and would cause each group to use any means in its power to disrupt and subdue the other.

That is not democracy. That leads to the downfall of democracy. The people do not want that to happen.

When “Capital” and “Labor” really understand the facts as they are, by thinking and by each putting itself in the other’s place and then feeling the situation as it is, they will not continue to hoodwink and delude themselves. Instead of being enemies, they will, from necessity, and naturally, become co-workers for the common good of human life.

Human beings cannot be independent of each other. To have a family and a civilization, human beings must depend on each other. Capital cannot do without Labor any more than Labor can do without Capital. The social structure has been built up by and depends on Capital and Labor. The two must learn to work together in harmony for their own common good. But then each must be what it is and do its own work; it should not try to be the other, nor to do the work of the other. One is as necessary in its own place and doing its own work as the other is in its place and doing its work. These are simple truths, facts which everyone should understand. The understanding of the facts will prevent strife. Therefore it will be well to inquire about capital and labor and to see how they are related.

What is capital? Capital is the harmonious working of the four essentials by which all things that can be conceived can be produced. The four essentials are: head-capital, hand-capital, time-capital, and intelligence-capital. What is labor? Labor is muscular or mental toil, effort, work to be performed for any given purpose by any worker.

What is a capitalist? A capitalist is any worker who uses his time-capital and intelligence-capital as a head-capitalist or as a hand-capitalist, according to his capacity and ability.

What is a head-capitalist? A head-capitalist is a worker who provides and organizes the means and material for the work which a hand-capitalist engages himself and agrees to perform for certain compensation.

What is a hand-capitalist? A hand-capitalist is a worker who engages himself and for certain compensation agrees to perform the work for which he is engaged by a head-capitalist.

What is time-capital? Time-capital is that essential to all kinds of work and which all workers have alike; no one worker having more or less than any other worker, to do with as he sees fit and chooses.

What is intelligence-capital? Intelligence-capital is that essential to every kind of organized work which each worker has in some degree, but of which no two workers have in the same degree; each worker having it in more or less degree than others, and varying in degree according to the work in which that worker is engaged.

With this understanding, no one can fail to see that capital means and is head, the head or chief part of a body, such as of one’s own body, or the head of a body of workers. As a generalization, capital is whatever is necessary for the accomplishment of organized work. In an industrial or business sense, capital means value, property or wealth of any kind.

Concerning work: One kind of work is done by the head, head or brain work; the other kind of work is done by the hands, hand or brawn work. So there are two kinds of workers, head or brain workers and hand or brawn workers. Each worker must use his head and his hands in whatever he does as work, but the head worker uses his brain in a greater degree than his hands, and the hand worker generally uses his brawn in a greater degree than his head. The head plans for and directs the hands, and the hands do what the head plans or directs, in whatever work is done, as an individual or as an organization.

Concerning the time essential: Time-capital is equally distributed among all human beings. One person has no more and no less time-capital than any other one. Time is just as much at the service of any one worker as it is at the service of any other worker. And each one may or may not use his time-capital, as he pleases. Each worker may be just as much of a time-capitalist as any other worker. Time is a means of making or of developing and accumulating all other kinds of capital. It asks nothing of anyone and it lets everyone do with it as that one wills. Time is so universally free that it is not considered to be capital, and it is wasted most by those who least know the uses and value of capital.

Concerning the intelligence essential: Intelligence-capital is that in every worker which the worker must use while thinking. Intelligence shows any worker what he can do with his head and his hands, his brain and his brawn. And the worker shows, by the way he manages his work, the degree of intelligence that that worker has and uses in his work. Intelligence shows the head worker how to plan his work, how to get the material and the means for accomplishing the work planned. Intelligence, like time, allows the worker to use it as that one wills; but, unlike time, intelligence guides him in the use of his time in the accomplishing of his work and the attainment of his purpose, be that purpose for good or for ill. Intelligence shows the hand worker how best to plan his time in the doing of his work, how to skill himself in the use of his hands in the performance of his work, whether the work be the digging of a ditch, the ploughing of a furrow, the making of delicate instruments, the use of pen or brush, the cutting of precious stones, the playing of musical instruments, or the sculpturing of marble. The continued use of his intelligence will increase the value of the head worker and of the hand worker in his capacity and ability to think in organizing his head-capital and his hand-capital and his time-capital for the best and the greatest production of the work in which that worker is engaged.

Thus it is clear that the four essentials of capital and labor are possessed by each individual worker; that by each worker possessing the four essentials he capitalizes himself or engages himself to be capitalized as a head-capitalist or as a hand-capitalist; that by his combination and management of his head-capital and hand-capital and time-capital and intelligence-capital, the value of each worker is rated according to the work that he does. It is therefore reasonable and just that in every organized business, each worker should receive compensation based on the rating of the value of the work he does in whatever department of that business in which he is engaged.

Capital that cannot be used is worthless; it produces nothing; in time it ceases to be capital. Wrong use makes waste of capital. The right use of brain and brawn and time, when properly organized and directed by intelligence, will result in wealth, in any accomplishment desired. Time is the essential in accomplishment when used by brain and brawn. Little is accomplished with much time when brawn directs brain. Much is accomplished in little time when brain with intelligence directs brawn. And the essence of time is in accomplishment.

Capital as the working head or brain capital, should provide the ways and the means for the working of hand or brawn capital. That is, the body of men called “Capital” or “Capitalists” provides the place and conditions for work, and the plan or system by which the work is done, and for the disposition of the products of the work.

Concerning the compensation or profits resulting from the work of Capital and of Labor, if Capital does not give due consideration to the interests of Labor, and if Labor will not give due consideration to the interests of Capital, there will be no agreement. There will be waste of Capital and waste of Labor, and both will suffer loss. Let there be clear understanding that each is complementary and necessary to the other; that each will take an interest in and work for the other’s interest. Then, instead of conflict there will be agreement, and better work will be accomplished. Then Capital and Labor will each get its just share of profit from the work done and will take pleasure in the work. This is no airy day-dream. One will be willfully blind if he will not see and profit from these facts. These will be the solid work-a-day facts of business life—as soon as Capital and Labor will, by thinking, remove the blinders of stupid selfishness from their eyes. This will be the common good sense and practical and business-like way for the working together of Capital and Labor—to create a real commonwealth, the wealth of Capital and the wealth of Labor.

But in the consideration of capital, where does money come in, what part does it play, as capital? Money as coined metal or printed paper is only one of the innumerable products which are manufactured or grown, such as wire, wigs, or waistcoats, or as cattle, corn or cotton. But money cannot truly be considered to be capital, as is brain and brawn and time and intelligence. These are the essentials as capital. They are not grown or manufactured products. Capital and Labor have allowed money to play the abnormal, false and unfair part of capital. Money is allowed to be the medium of exchange, as buttons or cloth or corn might be allowed to be. Brain and brawn and time and intelligence are the actual capital that create the actual products which are generalized by the term wealth. Wealth is usually estimated in terms of money, although money is only one of the numerous constituents or contributions to wealth, such as houses and lands and pots and pans. It is well to allow money to remain as the medium of exchange, the go-between in buying and selling, but it is not well to have it so conspicuously prominent in the mental vision that all other kinds of wealth must by it be measured in diminishing values. Wealth is not Capital or Labor; it is one of the resultant products of Capital and Labor. While money continues to be the medium of exchange in trade, it should be divided by Capital and Labor in due proportion to their invested interests, and for their common good.

All honest work is honorable if it serves a useful purpose. But, there are necessarily different kinds of work. The world would indeed be a dreary place if all the people were alike and thought and felt alike and did the same kind of work alike. Some workers can do many kinds of work. Others are limited as to the certain kinds of work they can do. And the tools must be different for the different kinds of work. A pen cannot do the work of a pick, nor can a pick do the work of a pen. Likewise there is a difference in the use of the tools. Shakespeare could not have used a pick with the skill of an experienced ditch digger. Nor could the ditch digger have written a line of Shakespeare with Shakespeare’s pen. It would have been harder for Phidias to have quarried the marble for the pediment of the Parthenon than it was for any one of the quarrymen. But no quarryman could have chiselled out of the marble quarried one of the heads of the horses—and with the strength and feeling put into it by Phidias.

It is quite as important for every employer as it is for everyone employed, quite as important for everyone who is rich as for everyone who is poor and for all kinds of politicians, to give careful consideration to the simple truths, while there is still time to change what is called democracy into a Real Democracy. Else the time will come when the seething and rising tides of feeling and desire and the maddened winds of thought cannot be abated. When once they begin to destroy and to sweep away what there is of civilization, they leave only vestiges and desolation in its stead.