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THE COTTON TRADE IN ENGLAND

Tlie cheapening of the production of a defined article refers to,as we saw, establishing as well as working costs. Included, in thelatter, again, are all single charges—raw materials, labour, workingexpenses, interest, profit, etc. Since, however, establishing costsand working costs resolve themselves into cost of labour, intereston capital, and employers’ profit of other trades, there remain, infact, excluding raw materials, only three of the elements named,which are liable to a continuous lowering.

We can here pass by raw materials after what we have said aboverespecting them. Also in their prices there are solely containedcost of labour, interest on capital, and employer’s profit, as far asa priority or ground rent does not exist upon it, the reason forwhich at present is not to be examined. Apart from the latter,therefore, the whole result of the labour of a nation’s, as of everyindividual’s production, is divided between labour and capital, inthat the so-called employer’s profit, as mentioned above, is of twokinds, and is to be reckoned partly to the one and partly to theother category. In that we shall refer to it later on, we provefirstly, *for the centralised industrial development, that within agiven product—for instance, one pound of yarn, one yard of cloth,or one ton of iron—the amount falling to labour as well as tocapital permanently decreases ; the cost of labour because this iscontinuously replaced by capital; the cost of capital because bytechnical progress the same capital ever becomes more productive,by the progress of national economy ever becomes cheaper. Theoperative, the poorer consumer, has the advantage; for him thischeapening of economical commodities has at once the effect of arise in wages.

But we must further ask, the amounts falling upon labourand capital decrease in the same ratio? Or does the centralisedindustrial development alter the ratio so that within a definedproduct the amounts coming on both items certainly absolutelydecrease, but the one compared with the other relatively increases.The answer to this question gives at once the following considera-tion : —A similar capital produces, by reason of technical progress,more at the present time than 50 years ago; in spite of this, if theinterest and profit expected by capital has remained the same, oreven gone down, the surplus must therefore have gone to labour.

A view into the reasons of this relation is afforded by thatreplacement of labour by capital in the cotton industry treated onabove.