This section is from the "The Science Of Wealth" book, by Amasa Walker.
Labor enters into production, or the creation of values, in two ways: —
First, As the labor of the present.
Second, As the labor of the past.
"We call the first " labor " simply; the second, " capital," which is accumulated labor. In their nature, these are identical. They have assumed different forms, have acquired independent rights, and each obeys certain laws peculiar to itself. These two forms of labor may be, and often are, owned by different persons. One man has present labor at his command. This must be his own. Another has accumulated labor. This may be his own, or that of others, of which he has come into possession.
In practice, the two forms of labor must come together and help each other, if they would effect the barest subsistence of mankind. Even the naked savage goes hungry till he gets his bow and his fishing-hook by the labor of his hands. As society goes forward to plenty, comfort, luxury, civilization, the union and mutuality of the two become more intimate and vital. By such a connection alone is wealth produced.
The growth of capital, and the steps by which it comes to its proper position in the creation of values, may be best shown by a familiar illustration. An able-bodied workman presents himself to you, having the full disposal of his own powers, fully representing the labor of the present, and that only. We will, however, compromise so far with his necessities as to allow him to be clothed; though each article he wears has come from the labor of the past, and, in this supposition, is capital. He has no tools; and, if you have no work that can be done without -tools, you must deny him employment. His chances, then, of labor, are hardly as one to a hundred without tools. In the other ninety-nine, he starves for want of capital. But, by chance, you find work requiring no help from accumulated labor. You set him to clearing a field by throwing the stones into heaps. He has secured subsistence for the day without capital. It was uncertain whether he would obtain it. It is certain the employment cannot last long, since need of such assistance closes, perhaps, with the first evening; and you send him away helpless in the midst of civilization. His livelihood to-morrow is still more precarious. But no: he carries away his earnings for the day. He chooses to lay them out in an axe, rather than on any object of comfort or pleasure. He has practised a self-denial. He appears the next morning with his axe. He has enlarged the sphere of his activity, perhaps, fifty-fold. He has now fifty chances of employment. He has secured work for fifty days. Before the close of this period, he can, by thrift, provide for his immediate bodily wants; pay for his clothes, for which we gave him credit more in charity than logic ; and become the possessor of a pick and shovel, scythe and rake. He is now a full farm-laborer, able to do any part of the strictly necessary work of agriculture with such tools as he has, and may rightfully expect employment every day of the year. So it is, in the grand field of the world's industry, that capital — the accumulation of labor — helps the labor of the present, not only to its immediate sustenance, but to permanent occupation, to increase, and to the highest economic civilization.