The lazy men squandered their substance whilst the diligent saved theirs’ – thus Capital was born from thrift”. This fairy tale has about as much real application to the origins of Capital as Adam’s Rib has to the origin of women. The important point is: how are private fortunes created and how do they grow?

We know that prior to the capitalist system of production the producers owned their means of production, and the primitive accumulation of capital is nothing less than the process of divorcing the producers from their means of production and turning them into capital. When this process is completed historically we arrive at the situation which exists today, where the producers are totally alienated from the social means of production. They are property-less wage-workers selling their life-activity to their employers, with enough to live on and sometimes not even that.

Capital has not existed from all time. It commenced in Europe out of the ruins of the old Feudal society around the fifteenth and sixteenth centuries. It is a social relation of production, and came into existence with the production of commodities and their circulation. The circulation of commodities means the development of an exchange system which finds its ultimate expression in the introduction of a monetary system. Any stated sum of money is representative of any stated quantity of commodities or value. Money is the final product of the circulation of commodities, and capital appears in the first instance in that form. But capital can also appear in the form of the sum of commodities (values); raw materials, instruments of labour, in fact, any sum of exchange values. What distinguishes the commodities comprising capital from any other group of commodities is the way in which they are used. The object behind their use must always be to produce a greater value than that existing. Capital functions solely to produce a surplus-value greater than the sum originally advanced, either in the monetary form or in the commodity form, or both.

It is important to differentiate between capital trading transactions and share or stock dealings carried out mainly on the world’s stock exchanges between rival shareholders and investors, each trying to improve his financial opposition individually, or in a group. These represent transfers of capital between various people and institutions. They do not add to the total wealth, but change the ownership of existing wealth (value), much as in the same way as you can move furniture from one room to the other within the same house. You finish up with the same furniture but in different rooms. One man’s loss is another man’s gain.

The function of capital production is to increase existing wealth. The production of wealth cannot, therefore, depend upon trading transactions; neither can it depend on nature or heaven, despite “the lord’s bounty”. When the parson gives thanks every harvest festival “when all is safely gathered in”, it should never be forgotten that every day is harvest day for the capitalist, sowing capital and reaping surplus value.

Raw materials, and even the most sophisticated machinery, or gold bars, do not possess magical powers, and cannot increase their own value merely by being placed together in any sphere of production. Being inanimate objects they are dependent on men, either to produce them in the first instance, or to maintain or supervise their operation. Living labour is vital to the whole function of capital. If the machine or the materials cannot change their value, and if there is an additional or surplus value created, then it could only have come from living labour, there being no other possible source. The legendary brilliance of the capitalist, his organizing ability, and other associated fables, have little to do with the social production of wealth and its accumulation. Some are clever, some are industrious, most are ignorant of the source of their wealth, inefficient and self-indulgent. Were they all in the first category it would make no difference, because the fact remains that capital is a social relation of production working independently from personalities clever, stupid, or mediocre.

The social capital mainly consists of the means of production and distribution; factories, industrial complexes, oil wells, mineral workings, means to transport, ships, aeroplanes, railways and road transport systems, agricultural land, plantations, etc. Most of these have been created gradually by workers long since dead. This is the accumulated labour (value0 of the past which provides the basis of the living labourers’ productive capacity in the present. The employer (capitalist0 allows the worker access to this existing social capital, created by the worker’s predecessors, for the sole and specific purpose of adding a greater value than that previously existing. This marriage between living labour and capital (past labour) is a necessary condition for the social extraction of surplus-value. But, as has been stated, the element of surplus-value or profit cannot come from a fixed quantity of accumulated wealth. If anything, without the fertilization of living labour the accumulated wealth of the past which exists in the objects of social labour – factories, machinery, road systems, industrial centres, shipyards, cultivated land, etc. – would deteriorate and eventually become wasted assets. Living labour serving capital therefore performs two functions: first it produces a surplus value working together with the accumulated labour of the past; and second, and by virtue of its productive activity, it preserves the means of production from decay. Every act of production is, in effect, also an act of reproduction, and it’s through this act of reproduction that the means of production remain intact, and are preserved for the capitalist.

The employers, as a class, who own the social capital, buy social labour-power, giving wages in return.

On the other hand, if a capitalist spends £10 million in wages and £1 million on raw materials, fuel, machinery, etc. and shows a profit of £1 million, the rate of exploitation would be 10 per cent.

The rate of exploitation is measured against the amount paid out in the form of wages, and not the total capital. The constant capital vested in machinery, raw materials, fuel, buildings, etc, is constantly replaced, or constantly reproduced by the capitalist adding the value of these elements to the commodities which he produces. Constant capital cannot add any additional value to the products, other than that contained within itself. In fact, it is only through the agency of human labour power during the productive process that dead capital (accumulated capital) gives birth to new additional value.

Capitalism is basically a system of accumulation, and that portion of surplus-value which is not consumed by the capitalists on luxury living, is remitted to the fund of accumulated labour, where it can serve as fresh capital to exploit workers again and again, increasing with every phase of circulation. It is indeed the dead hand of the past weighing heavily like an Alp on the living. The greater the fund of accumulated capital, the greater the pressure on the workers to serve that capital, to augment it ad infintum.

It is often stated by supporters of capitalism that capital has opened up new horizons, and that men have access to things and technological discoveries previously undreamed of. But it should be remembered that men, together with their fellow men, live in society and create their own environment. That environment is anti-social; because men’s creative ability is stifled as they do not own or control the means of production. It is hardly an argument to suggest that man is adequately compensated for this social loss by their ownership of TV’s, motor cards and central heating. As Marx stated: “Whether his wages be high or low, or whether the chains that bind him be made of gold, the worker is as firmly riveted to capital as was Prometheus to the rock”.

Capital appears to have a separate existence outside the control of man. As a social relation, it Frankenstein’s monster-like, dominates all forms of human behaviour, where everything is related to the money principle. The measure of a man is his wealth not his intellect or culture. The ability of a man is determined by his financial power. The big spender has inherited the earth – that is why he is a big spender. Capitalism has created a phoney culture, and has debased man’s intellect to the level of a commodity. Happily we have not all succumbed to its pernicious influence, and we know, and are optimistic enough to believe, that society can be turned the right way up – which means that civilisation can survive and prosper without capital.

Jim D’Arcy, SOCIALIST STANDARD, no. 837 May 1974.

Comrade D’Arcy was expelled along with other sound socialists for taking political action in the name of the Socialist Party of Great Britain.

Back to top

Object and Declaration of Principles


The establishment of a system of society based upon the common ownership and democratic control of the means and instruments for producing and distributing wealth by and in the interest of the whole community.

Declaration of Principles


1. That society as at present constituted is based upon the ownership of the means of living (ie land, factories, railways, etc.) by the capitalist or master class, and the consequent enslavement of the working class, by whose labour alone wealth is produced.

2. That in society, therefore, there is an antagonism of interests, manifesting itself as a class struggle, between those who possess but do not produce and those who produce but do not possess.

3.That this antagonism can be abolished only by the emancipation of the working class from the domination of the master class, by the conversion into common property of society of the means of production and distribution, and their democratic control by the whole people.

4. That as in the order of social evolution the working class is the last class to achieve its freedom, the emancipation of the working class will involve the emancipation of all mankind without distinction of race or sex.

5. That this emancipation must be the work of the working class itself.

6. That as the machinery of government, including the armed forces of the nation, exists only to conserve the monopoly by the capitalist class of the wealth taken from the workers, the working class must organise consciously and politically for the conquest of the powers of government, national and local, in order that this machinery, including these forces, may be converted from an instrument of oppression into the agent of emancipation and the overthrow of privilege, aristocratic and plutocratic.

7. That as all political parties are but the expression of class interests, and as the interest of the working class is diametrically opposed to the interests of all sections of the master class, the party seeking working class emancipation must be hostile to every other party.

8. The Socialist Party of Great Britain, therefore, enters the field of political action determined to wage war against all other political parties, whether alleged labour or avowedly capitalist, and calls upon the members of the working class of this country to muster under its banner to the end that a speedy termination may be wrought to the system which deprives them of the fruits of their labour, and that poverty may give place to comfort, privilege to equality, and slavery to freedom.