Labor

Most of us, when we hear the word "labor" think of "organized labor." That isn't the reference here. Labor refers to all of us who supply our effort to a project. Labor is one of the three factors of production (the other two are land and capital.)

The return to labor is wages, and most of us are concerned that wages do not keep pace with the cost of living for the vast majority of Americans. This is not a new phenomenon: Henry George called attention to it in 1879 in Progress & Poverty. See also his 1891 letter called The Condition of Labor, which lays out George's ideas very clearly.

Henry George: Progress & Poverty: Wages & Capital: The Meaning of the Terms (Book I, Chapter 2)

Land, labor, and capital are the three factors of production. If we remember that capital is thus a term used in contradistinction to land and labor, we at once see that nothing properly included under either one of these terms can be properly classed as capital. The term land necessarily includes, not merely the surface of the earth as distinguished from the water and the air, but the whole material universe outside of man himself, for it is only by having access to land, from which his very body is drawn, that man can come in contact with or use nature. The term land embraces, in short, all natural materials, forces, and opportunities, and, therefore, nothing that is freely supplied by nature can be properly classed as capital. A fertile field, a rich vein of ore, a falling stream which supplies power, may give to the possessor advantages equivalent to the possession of capital, but to class such things as capital would be to put an end to the distinction between land and capital, and, so far as they relate to each other, to make the two terms meaningless. The term labor, in like manner, includes all human exertion, and hence human powers whether natural or acquired can never properly be classed as capital. In common parlance we often speak of a man's knowledge, skill, or industry as constituting his capital; but this is evidently a metaphorical use of language that must be eschewed in reasoning that aims at exactness. Superiority in such qualities may augment the income of an individual just as capital would, and an increase in the knowledge, skill, or industry of a community may have the same effect in increasing its production as would an increase of capital; but this effect is due to the increased power of labor and not to capital. Increased velocity may give to the impact of a cannon ball the same effect as increased weight, yet, nevertheless, weight is one thing and velocity another.

[26] Thus we must exclude from the category of capital everything that may be included either as land or labor. Doing so, there remain only things which are neither land nor labor, but which have resulted from the union of these two original factors of production. Nothing can be properly capital that does not consist of these that is to say, nothing can be capital that is not wealth. ... read the entire chapter

H.G. Brown: Significant Paragraphs from Henry George's Progress & Poverty, Chapter 5: The Basic Cause of Poverty (in the unabridged: Book V: The Problem Solved)

For land is the habitation of man, the storehouse upon which he must draw for all his needs, the material to which his labor must be applied for the supply of all his desires; for even the products of the sea cannot be taken, the light of the sun enjoyed, or any of the forces of nature utilized, without the use of land or its products. On the land we are born, from it we live, to it we return again — children of the soil as truly as is the blade of grass or the flower of the field. Take away from man all that belongs to land, and he is but a disembodied spirit. Material progress cannot rid us of our dependence upon land; it can but add to the power of producing wealth from land; and hence, when land is monopolized, it might go on to infinity without increasing wages or improving the condition of those who have but their labor. It can but add to the value of land and the power which its possession gives. Everywhere, in all times, among all peoples, the possession of land is the base of aristocracy, the foundation of great fortunes, the source of power. ... read the whole chapter

H.G. Brown: Significant Paragraphs from Henry George's Progress & Poverty, Chapter 8: Why a Land-Value Tax is Better than an Equal Tax on All Property (in the unabridged P&P: Book VIII: Application of the Remedy — Chapter 3: The proposition tried by the canons of taxation)

The ground upon which the equal taxation of all species of property is commonly insisted upon is that it is equally protected by the state. The basis of this idea is evidently that the enjoyment of property is made possible by the state — that there is a value created and maintained by the community, which is justly called upon to meet community expenses. Now, of what values is this true? Only of the value of land. This is a value that does not arise until a community is formed, and that, unlike other values, grows with the growth of the community. It exists only as the community exists. Scatter again the largest community, and land, now so valuable, would have no value at all. With every increase of population the value of land rises; with every decrease it falls. This is true of nothing else save of things which, like the ownership of land, are in their nature monopolies.

The tax upon land values is, therefore, the most just and equal of all taxes.

• It falls only upon those who receive from society a peculiar and valuable benefit, and upon them in proportion to the benefit they receive.
• It is the taking by the community, for the use of the community, of that value which is the creation of the community.
• It is the application of the common property to common uses.

When all rent is taken by taxation for the needs of the community, then will the equality ordained by Nature be attained. No citizen will have an advantage over any other citizen save as is given by his industry, skill, and intelligence; and each will obtain what he fairly earns. Then, but not till then, will labor get its full reward, and capital its natural return. ... read the whole chapter

Henry George: The Condition of Labor — An Open Letter to Pope Leo XIII in response to Rerum Novarum (1891)

You assume that the labor question is a question between wage-workers and their employers. But working for wages is not the primary or exclusive occupation of labor. Primarily men work for themselves without the intervention of an employer. And the primary source of wages is in the earnings of labor, the man who works for himself and consumes his own products receiving his wages in the fruits of his labor. Are not fishermen, boatmen, cab-drivers, peddlers, working farmers — all, in short, of the many workers who get their wages directly by the sale of their services or products without the medium of an employer, as much laborers as those who work for the specific wages of an employer? In your consideration of remedies you do not seem even to have thought of them. Yet in reality the laborers who work for themselves are the first to be considered, since what men will be willing to accept from employers depends manifestly on what they can get by working for themselves.

You assume that all employers are rich men, who might raise wages much higher were they not so grasping. But is it not the fact that the great majority of employers are in reality as much pressed by competition as their workmen, many of them constantly on the verge of failure? Such employers could not possibly raise the wages they pay, however they might wish to, unless all others were compelled to do so.

You assume that there are in the natural order two classes, the rich and the poor, and that laborers naturally belong to the poor.

It is true as you say that there are differences in capacity, in diligence, in health and in strength, that may produce differences in fortune. These, however, are not the differences that divide men into rich and poor. The natural differences in powers and aptitudes are certainly not greater than are natural differences in stature. But while it is only by selecting giants and dwarfs that we can find men twice as tall as others, yet in the difference between rich and poor that exists today we find some men richer than other men by the thousandfold and the millionfold.

Nowhere do these differences between wealth and poverty coincide with differences in individual powers and aptitudes. The real difference between rich and poor is the difference between those who hold the tollgates and those who pay toll; between tribute-receivers and tribute-yielders. ...

It seems to us that your Holiness misses its real significance in intimating that Christ, in becoming the son of a carpenter and himself working as a carpenter, showed merely that “there is nothing to be ashamed of in seeking one’s bread by labor.” To say that is almost like saying that by not robbing people he showed that there is nothing to be ashamed of in honesty. If you will consider how true in any large view is the classification of all men into working-men, beggar-men and thieves, you will see that it was morally impossible that Christ during his stay on earth should have been anything else than a working-man, since he who came to fulfil the law must by deed as well as word obey God’s law of labor.

See how fully and how beautifully Christ’s life on earth illustrated this law. Entering our earthly life in the weakness of infancy, as it is appointed that all should enter it, he lovingly took what in the natural order is lovingly rendered, the sustenance, secured by labor, that one generation owes to its immediate successors. Arrived at maturity, he earned his own subsistence by that common labor in which the majority of men must and do earn it. Then passing to a higher — to the very highest — sphere of labor, he earned his subsistence by the teaching of moral and spiritual truths, receiving its material wages in the love-offerings of grateful hearers, and not refusing the costly spikenard with which Mary anointed his feet. So, when he chose his disciples, he did not go to landowners or other monopolists who live on the labor of others, but to common laboring-men. And when he called them to a higher sphere of labor and sent them out to teach moral and spiritual truths, he told them to take, without condescension on the one hand or sense of degradation on the other, the loving return for such labor, saying to them that “the laborer is worthy of his hire,” thus showing, what we hold, that all labor does not consist in what is called manual labor, but that whoever helps to add to the material, intellectual, moral or spiritual fullness of life is also a laborer.*

* Nor should it be forgotten that the investigator, the philosopher, the teacher, the artist, the poet, the priest, though not engaged in the production of wealth, are not only engaged in the production of utilities and satisfactions to which the production of wealth is only a means, but by acquiring and diffusing knowledge, stimulating mental powers and elevating the moral sense, may greatly increase the ability to produce wealth. For man does not live by bread alone. . . . He who by any exertion of mind or body adds to the aggregate of enjoyable wealth, increases the sum of human knowledge, or gives to human life higher elevation or greater fullness — he is, in the large meaning of the words, a “producer,” a “working-man,” a “laborer,” and is honestly earning honest wages. But he who without doing aught to make mankind richer, wiser, better, happier, lives on the toil of others — he, no matter by what name of honor he may be called, or how lustily the priests of Mammon may swing their censers before him, is in the last analysis but a beggar-man or a thief. — Protection or Free Trade, pp. 74-75.

In assuming that laborers, even ordinary manual laborers, are naturally poor, you ignore the fact that labor is the producer of wealth, and attribute to the natural law of the Creator an injustice that comes from man’s impious violation of his benevolent intention. In the rudest stage of the arts it is possible, where justice prevails, for all well men to earn a living. With the labor-saving appliances of our time, it should be possible for all to earn much more. And so, in saying that poverty is no disgrace, you convey an unreasonable implication. For poverty ought to be a disgrace, since in a condition of social justice, it would, where unsought from religious motives or unimposed by unavoidable misfortune, imply recklessness or laziness. ... read the whole letter

Rev. A. C. Auchmuty: Gems from George, a themed collection of excerpts from the writings of Henry George (with links to sources)

THE term Labor includes all human exertion in the production of wealth, whatever its mode. In common parlance we often speak of brain labor and hand labor as though they were entirely distinct kinds of exertion, and labor is often spoken of as though it involved only muscular exertion. But in reality any form of labor, that is to say, any form of human exertion in the production of wealth above that which cattle may be applied to doing, requires the human brain as truly as the human hand, and would be impossible without the exercise of mental faculties on the part of the laborer. Labor in fact is only physical in external form. In its origin it is mental or on strict analysis spiritual. — The Science of Political Economy unabridged: Book III, Chapter 16: The Production of Wealth, The Second Factor of Production — Labor • abridged: Part III, Chapter 10: Order of the Three Factors of Production

IT seems to us that your Holiness misses its real significance in intimating that Christ in becoming the son of a carpenter and Himself working as a carpenter showed merely that "there is nothing to be ashamed of in seeking one's bread by labor." To say that is almost like saying that by not robbing people He showed that there is nothing to be ashamed of in honesty. If you will consider how true in any large view is the classification of all men into working-men, beggar-men and thieves, you will see that it was morally impossible that Christ during His stay on earth should have been anything else than a working-man, since He who came to fulfill the law must by deed as well as word obey God's law of labor.
 
See how fully and how beautifully Christ's life on earth illustrated this law. Entering our earthly life in the weakness of infancy, as it is appointed that all should enter it, He lovingly took what in the natural order is lovingly rendered, the sustenance, secured by labor, that one generation owes to its immediate successors. Arrived at maturity, He earned His own subsistence by that common labor in which the majority of men must and do earn it. Then passing to a higher — to the very highest-sphere of labor. He earned His subsistence by the teaching of moral and spiritual truths, receiving its material wages in the love offerings of grateful hearers, and not refusing the costly spikenard with which Mary anointed his feet. So, when He chose His disciples, He did not go to land-owners or other monopolists who live on the labor of others but to common laboring men. And when He called them to a higher sphere of labor and sent them out to teach moral and spiritual truths He told them to take, without condescension on the one hand, or sense of degradation on the other, the loving return for such labor, saying to them that the "laborer is worthy of his hire," thus showing, what we hold, that all labor does not consist in what is called manual labor, but that whoever helps to add to the material, intellectual, moral, or spiritual fulness of life is also a laborer. - The Condition of Labor

NOR should it be forgotten that the investigator, the philosopher, the teacher, the artist, the poet, the priest, though not engaged in the production of wealth, are not only engaged in the production of utilities and satisfactions to which the production of wealth is only a means, but by acquiring and diffusing knowledge, stimulating mental powers and elevating the moral sense, may greatly increase the ability to produce wealth. For man does not live by bread alone. He is not an engine, in which so much fuel gives so much power. On a capstan bar or a topsail halyard a good song tells like muscle, and a "Marseillaise" or a "Battle Hymn of the Republic" counts for bayonets. A hearty laugh, a noble thought, a perception of harmony, may add to the power of dealing even with material things.

He who by any exertion of mind or body adds to the aggregate of enjoyable wealth, increases the sum of human knowledge or gives to human life higher elevation or greater fulness — he is, in the large meaning of the words, a "producer," a "working-man," a "laborer," and is honestly earning honest wages. But he who without doing aught to make mankind richer, wiser, better, happier, lives on the toil of others — he, no matter by what name of honor he may be I called, or how lustily the priests of Mammon may swing their censers before him, is in the last analysis but a beggarman or a thief. — Protection or Free Trade, Chapter 7 econlib ...

WHEN we speak of a community increasing in wealth we do not mean to say that there is more land, or that the natural powers of the land are greater, or that there are more people (for when we wish to express that idea we speak of increase of population) or that the debts or dues owing by some of these people to others of their number have increased; but we mean that there is an increase of certain tangible things, having an actual and not merely a relative value — such as buildings, cattle, tools, machinery, agricultural and mineral products, manufactured goods, ships, wagons, furniture and the like. . . . The common character of these things is that they consist of natural substances or products which have been adapted by human labor to human use or gratification, their value depending on the amount of labor which upon the average would be required to produce things of like kind.— Progress & Poverty — Book I, Chapter 2: Wages and Capital: The Meaning of the Terms

WEALTH is not the sole object of labor, for labor is also expended in ministering directly to desire; but it is the object and result of what we call productive labor — that is, labor which gives value to material things. Nothing which nature supplies to man without his labor is wealth, nor yet does the expenditure of labor result in wealth unless there is a tangible product which has and retains the power of ministering to desire. — Progress & Poverty — Book I, Chapter 2: Wages and Capital: The Meaning of the Terms

IT will be well for a moment to consider this idea of accumulated wealth. The truth is, that wealth can be accumulated but to a slight degree, and that communities really live, as the vast majority of individuals live, from hand to mouth. Wealth will not bear much accumulation; except in a few unimportant forms it will not keep. The matter of the universe, which, when worked up by labor into desirable forms, constitutes wealth, is constantly tending back to its original state. Some forms of wealth will last for a few hours, some for a few days, some for a few months, some for a few years; and there are very few forms of wealth that can be passed from one generation to another. Take wealth in some of its most useful and permanent forms — ships, houses, railways, machinery. Unless labor is constantly exerted in preserving and renewing them, they will almost immediately become useless. Stop labor in any community, and wealth would vanish almost as the jet of a fountain vanishes when the flow of water is shut off. Let labor again exert itself, and wealth will almost as immediately reappear. Accumulated wealth seems to play just about such a part in relation to the social organism as accumulated nutriment does to the physical organism. Some accumulated wealth is necessary, and to a certain extent it may be drawn upon in exigencies; but the wealth produced by past generations can no more account for the consumption of the present than the dinners he ate last year can supply a man with present strength. — Progress & Poverty — Book II, Chapter 4: Population and Subsistence: Disproof of the Malthusian Theory

THE term Labor includes all human exertion in the production of wealth, whatever its mode. In common parlance we often speak of brain labor and hand labor as though they were entirely distinct kinds of exertion, and labor is often spoken of as though it involved only muscular exertion. But in reality any form of labor, that is to say, any form of human exertion in the production of wealth above that which cattle may be applied to doing, requires the human brain as truly as the human hand, and would be impossible without the exercise of mental faculties on the part of the laborer. Labor in fact is only physical in external form. In its origin it is mental or on strict analysis spiritual. — The Science of Political Economy unabridged: Book III, Chapter 16: The Production of Wealth, The Second Factor of Production — Labor • abridged: Part III, Chapter 10: Order of the Three Factors of Production

IT seems to us that your Holiness misses its real significance in intimating that Christ in becoming the son of a carpenter and Himself working as a carpenter showed merely that "there is nothing to be ashamed of in seeking one's bread by labor." To say that is almost like saying that by not robbing people He showed that there is nothing to be ashamed of in honesty. If you will consider how true in any large view is the classification of all men into working-men, beggar-men and thieves, you will see that it was morally impossible that Christ during His stay on earth should have been anything else than a working-man, since He who came to fulfill the law must by deed as well as word obey God's law of labor.
 
See how fully and how beautifully Christ's life on earth illustrated this law. Entering our earthly life in the weakness of infancy, as it is appointed that all should enter it, He lovingly took what in the natural order is lovingly rendered, the sustenance, secured by labor, that one generation owes to its immediate successors. Arrived at maturity, He earned His own subsistence by that common labor in which the majority of men must and do earn it. Then passing to a higher — to the very highest-sphere of labor. He earned His subsistence by the teaching of moral and spiritual truths, receiving its material wages in the love offerings of grateful hearers, and not refusing the costly spikenard with which Mary anointed his feet. So, when He chose His disciples, He did not go to land-owners or other monopolists who live on the labor of others but to common laboring men. And when He called them to a higher sphere of labor and sent them out to teach moral and spiritual truths He told them to take, without condescension on the one hand, or sense of degradation on the other, the loving return for such labor, saying to them that the "laborer is worthy of his hire," thus showing, what we hold, that all labor does not consist in what is called manual labor, but that whoever helps to add to the material, intellectual, moral, or spiritual fulness of life is also a laborer. - The Condition of Labor

NOR should it be forgotten that the investigator, the philosopher, the teacher, the artist, the poet, the priest, though not engaged in the production of wealth, are not only engaged in the production of utilities and satisfactions to which the production of wealth is only a means, but by acquiring and diffusing knowledge, stimulating mental powers and elevating the moral sense, may greatly increase the ability to produce wealth. For man does not live by bread alone. He is not an engine, in which so much fuel gives so much power. On a capstan bar or a topsail halyard a good song tells like muscle, and a "Marseillaise" or a "Battle Hymn of the Republic" counts for bayonets. A hearty laugh, a noble thought, a perception of harmony, may add to the power of dealing even with material things.

He who by any exertion of mind or body adds to the aggregate of enjoyable wealth, increases the sum of human knowledge or gives to human life higher elevation or greater fulness — he is, in the large meaning of the words, a "producer," a "working-man," a "laborer," and is honestly earning honest wages. But he who without doing aught to make mankind richer, wiser, better, happier, lives on the toil of others — he, no matter by what name of honor he may be I called, or how lustily the priests of Mammon may swing their censers before him, is in the last analysis but a beggarman or a thief. — Protection or Free Trade, Chapter 7 econlib

WE talk about the supply of labor, and the demand for labor, but, evidently, these are only relative terms. The supply of labor is everywhere the same — two hands always come into the world with one mouth, twenty-one boys to every twenty girls; and the demand for labor must always exist as long as men want things which labor alone can procure. We talk about the "want of work," but, evidently it is not work that is short while want continues; evidently, the supply of labor cannot be too great, nor the demand for labor too small, when people suffer for the lack of things that labor produces. The real trouble must be that the supply is somehow prevented from satisfying demand, that somewhere there is an obstacle which prevents labor from producing the things that laborers want.

Take the case of anyone of these vast masses of unemployed men, to whom, though he never heard of Malthus, it today seems that there are too many people in the world. In his own wants, in the needs of his anxious wife, in the demands for his half cared for, perhaps even hungry and shivering, children, there is demand enough for labor, Heaven knows! In his own willing hands is the supply. Put him on a solitary island, and though cut off from all the enormous advantages which the co-operation, combination, and machinery of a civilized community give to the productive powers of man, yet his two hands can fill the mouths and keep warm the backs that depend upon them. Yet where productive power is at its highest development, he cannot. Why? Is it not because in the one case he has access to the material and forces of nature, and in the other this access is denied? — Progress & Poverty Book V, Chapter 1, The Problem Solved: The primary cause of recurring paroxysms of industrial depression

... go to "Gems from George"

Louis Post: Outlines of Louis F. Post's Lectures, with Illustrative Notes and Charts (1894)

d. Dependence of Labor upon Land

We have now seen that division of labor and trade, the distinguishing characteristics of civilization, not only increase labor power, but grow out of a law of human nature which tends, by maintaining a perpetual revolution of the circle of trade, to cause opportunities for mutual employment to correspond to desire for wealth. Surely there could be no lack of employment if the circle flowed freely in accordance with the principle here illustrated; work would abound until want was satisfied. There must therefore be some obstruction. That indirect taxes hamper trade, we have already seen;78 but there is a more fundamental obstruction. As we learned at the outset, all the material wants of men are satisfied by Labor from Land. Even personal services cannot be rendered without the use of appropriate land.79 Let us then introduce into the preceding chart, in addition to the different classes of Labor, the corresponding classes of Land-owning interests, indicating them by black balls:

78. See ante, pp. 9, 6 and 16.

79. Demand for food is not only demand for all kinds and grades of Food-makers, but also for as many different kinds of land as there are different kinds of labor set at work. So a demand for clothing is not only a demand for Clothing-makers, a demand for shelter is not only one for Shelter-makers, a demand for luxuries is not only one for Luxury-makers, a demand for services is not only one for Personal Servants, but those demands are also demands for appropriate land — pasture land for wool, cotton land for cotton, factory land, water fronts and rights of way, store sites, residence sites, office sites, theater sites, and so on to the end of an almost endless catalogue.

Every class of Labor has now its own parasite.

The arrows which run from one kind of Labor to another, indicating an out-flow of service, are respectively offset by arrows that indicate a corresponding in-flow of service; but the arrows that flow from the various classes of Labor to the various Land-owning interests are offset by nothing to indicate a corresponding return. What possible return could those interests make?

• They do not produce the land which they charge laborers for using; nature provides that.
• They do not give value to it; Labor as a whole does that.
• They do not protect the community through the police, the courts, or the army, nor assist it through schools and post offices; organized society does that to the extent to which it is done, and the Land-owning interests contribute nothing toward it other than a part of what they exact from Labor.80

As between Labor interests and Land-owning interests the arrows can be made to run only in the one direction.

80 See ante, pp. 12, 13, and 14.

Now, suppose that as productive methods improve, the exactions of the Land-owning interests so expand — so enlarge the drain from Labor — as to make it increasingly difficult for any of the workers to obtain the Land they need in order to satisfy the demands made upon them for the kind of Wealth they produce. Would it then be much of a problem to determine the cause of poverty or to explain hard times? Assuredly not. It would be plain that poverty and hard times are due to obstacles placed by Land-owning interests in the way of Labor's access to Land.

We thus see that in the civilized state as well as in the primitive, the fundamental cause of poverty is the divorce of Labor from Land. 81 But the manner in which that divorce is accomplished in the civilized state remains to be explained.

... read the book

Nic Tideman: Basic Tenets of the Incentive Taxation Philosophy

• The contributions of human abilities to productive efforts are called "labor," the return to labor is called "wages," and the appropriate recipients of wages are those whose labor contributes to productive activities.
• The contributions of past human products to productive efforts are called "capital," the return to capital is called "interest," and the appropriate recipients of interest are those who past saving made the creation of capital possible.
• The contributions of government-assigned opportunities to the productive process are called "land," the return to land is called "rent," and the appropriate recipient of rent is the public treasury.

• Those who contribute labor to productive processes should be allowed to keep the wages that result from their labor.
• Those whose saving makes the creation of capital possible should be allowed to keep the interest that accrues from the use of capital.
• But there is no one who has a corresponding claim to the return to land. This is the reason that fees for the use of land and other opportunities assigned by government ought to be the primary source of government revenue.

Mason Gaffney:  George's Economics of Abundance: Replacing dismal choices with practical resolutions and synergies

Georgist policy removes the many big tax wedges between worker and employer, and employer and customer, and worker and consumable goods. Thus labor can cost the employer less, while the worker gets more disposable income after-tax. Many economists inveigh against the minimum wage, claiming it overprices labor. It is a matter of suspicion that they are then silent on the deadly effects of the payroll tax, which affects workers at all levels. Sales taxes, too, cut into real wages, yet many of these same economists would raise sales taxes and introduce VAT. President and Mrs. Clinton now speak seriously of raising payroll taxes even more, to finance the new health plan.

There is a high elasticity of demand for labor. This may be observed in farming, for example, where landowners have avoided union wage rates simply by shifting their land from fresh fruits and vegetables to labor-sparing uses like small grains or cotton. Conversely, removing the payroll tax burden will move owners to shift land back into labor-using enterprises.   Read the whole article

• The term "Land" refers to the whole material universe, exclusive of people and their products. Not the creation of human labor, yet essential to labor, it is the raw material from which all wealth is fashioned. It includes not only soil and minerals, but water, air, natural vegetation and wildlife, and all natural opportunities -- even those yet to be discovered. It is a passive factor of production, yielding wealth only when labor is applied to it.
• Labor includes all human powers, mental and physical, used directly or indirectly to produce goods or to render service in exchange. Labor is often thought of as work that is done for hire, at fixed wages, mainly excluded from the risk-taking and decision-making that is normally classed under the heading of "entrepreneurship". Yet labor, properly understood, includes all human exertion in production -- including mental exertion. The payment to labor is called Wages. And it is important to remember that the payment, or return, to labor does not include any returns that are the result of monopoly.
• Capital is the economic term that is most profoundly misunderstood and confused. For the term to make sense in any systematic analysis of wealth distribution, we must define capital in its classical sense as "wealth which is used to aid in further production, instead of being directly consumed." Since production is not completed until the product is in the hands of the consumer, products on their way to market, or "wealth in the course of exchange," are also considered capital.

Peter Barnes: Capitalism 3.0 — Chapter 10: What You Can Do (pages 155-166)

To build Capitalism 3.0, we each have unique roles to play. I therefore address the final pages of this book to a variety of people whose participation is critical. ...

WAGE EARNERS

You had it good for a while. Thanks to labor unions, you lifted yourselves into the middle class. You got paid vacations, forty-hour workweeks, time-and-half for overtime, health insurance, a pension, and most of all, job security. Even companies without unions paid well and offered lifetime employment if you wanted it. There was a social contract, if not a legal one, between employers, workers, and communities. This was America’s version of the welfare state, and if you were part of it, it wasn’t bad. But those days are dust.

In today’s global marketplace, capital moves at the speed of light, and you’re just a cost to be minimized. What management seeks — what capital demands — is more profit next quarter. Did you give the best years of your life to Acme Inc.? Too bad. Nothing boosts the bottom line faster than downsizing, outsourcing, or playing games with your pension fund. And forget about help from the union; it’s toothless now. We’re all on our own.

What can you do? Truthfully, not much. In the era of global capital, your form of income — wages — is at a serious competitive disadvantage. But over time, things can get better. The way out — for your kids, if not for you — is through a new version of capitalism that gives you (and everyone else) property income from a share of common wealth. That share is your birthright. It can’t be downsized or outsourced.

It pays some dividends in cash, and others in no-fuss health care, free Internet access, healthy food, clean air, and lots of places to go fishing. So claim your birthright, and your children’s. Claim it in living rooms, at church, in barbershops, and hair salons. This is how movements begin. ... read the whole chapter

Gems from George, a themed collection of excerpts from the writings of Henry George (with links to sources)

THE aggregate produce of the labor of a savage tribe is small, but each member is capable of an independent life. He can build his own habitation, hew out or stitch together his own canoe, make his own clothing, manufacture his own weapons, snares, tools and ornaments. He has all the knowledge of nature possessed by his tribe — knows what vegetable productions are fit for food, and where they maybe found; knows the habits and resorts of beasts, birds, fishes and insects; can pilot himself by the sun or the stars, by the turning of blossoms or the mosses on the trees; is, in short, capable of supplying all his wants. He may be cut off from his fellows and still live; and thus possesses an independent power which makes him a free contracting party in his relations to the community of which he is a member.

Compare with this savage the laborer in the lowest ranks of civilized society, whose life is spent in producing but one thing, or oftener but the infinitesimal part of one thing, out of the multiplicity of things that constitute the wealth of society and go to supply even the most primitive wants; who not only cannot make even the tools required for his work, but often works with tools that he does not own, and can never hope to own. Compelled to even closer and more continuous labor than the savage, and gaining by it no more than the savage gets — the mere necessaries of life — he loses the independence of the savage. He is not only unable to apply his own powers to the direct satisfaction of his own wants, but, without the concurrence of many others, he is unable to apply them indirectly to the satisfaction of his wants. He is a mere link in an enormous chain of producers and consumers, helpless to separate himself, and helpless to move, except as they move. The worse his position in society, the more dependent is he on society; the more utterly unable does he become to do anything for himself. The very power of exerting his labor for the satisfaction of his wants passes from his own control, and may be taken away or restored by the actions of others, or by general causes over which he has no more influence than he has over the motions of the solar system. The primeval curse comes to be looked upon as a boon, and men think, and talk, and clamor, and legislate as though monotonous manual labor in itself were a good and not an evil, an end and not a means. Under such circumstances, the man loses the essential quality of manhood — the godlike power of modifying and controlling conditions. He becomes a slave, a machine, a commodity — a thing, in some respects, lower than the animal.

I am no sentimental admirer of the savage state. I do not get my ideas of the untutored children of nature from Rousseau, or Chateaubriand, or Cooper. I am conscious of its material and mental poverty, and its low and narrow range. I believe that civilization is not only the natural destiny of man, but the enfranchisement, elevation, and refinement of all his powers, and think that it is only in such moods as may lead him to envy the cud-chewing cattle, that a man who is free to the advantages of civilization could look with regret upon the savage state. But, nevertheless, I think no one who will open his eyes to the facts, can resist the conclusion that there are in the heart of our civilization large classes with whom the veriest savage could not afford to exchange. It is my deliberate opinion that if, standing on the threshold of being, one were given the choice of entering life as a Terra del Fuegan, a black fellow of Australia, an Esquimaux in the Arctic Circle, or among the lowest classes in such a highly civilized country as Great Britain, he would make infinitely the better choice in selecting the lot of the savage. For those classes who in the midst of wealth are condemned to want, suffer all the privations of the savage, without his sense of personal freedom; they are condemned to more than his narrowness and littleness, without opportunity for the growth of his rude virtues; if their horizon is wider, it is but to reveal blessings that they cannot enjoy. — Progress & Poverty — Book V, Chapter 2: The Problem Solved: The Persistence of Poverty Amid Advancing Wealth

THE term Labor includes all human exertion in the production of wealth, whatever its mode. In common parlance we often speak of brain labor and hand labor as though they were entirely distinct kinds of exertion, and labor is often spoken of as though it involved only muscular exertion. But in reality any form of labor, that is to say, any form of human exertion in the production of wealth above that which cattle may be applied to doing, requires the human brain as truly as the human hand, and would be impossible without the exercise of mental faculties on the part of the laborer. Labor in fact is only physical in external form. In its origin it is mental or on strict analysis spiritual. — The Science of Political Economy unabridged: Book III, Chapter 16: The Production of Wealth, The Second Factor of Production — Labor • abridged: Part III, Chapter 10: Order of the Three Factors of Production

IT seems to us that your Holiness misses its real significance in intimating that Christ in becoming the son of a carpenter and Himself working as a carpenter showed merely that "there is nothing to be ashamed of in seeking one's bread by labor." To say that is almost like saying that by not robbing people He showed that there is nothing to be ashamed of in honesty. If you will consider how true in any large view is the classification of all men into working-men, beggar-men and thieves, you will see that it was morally impossible that Christ during His stay on earth should have been anything else than a working-man, since He who came to fulfill the law must by deed as well as word obey God's law of labor.

See how fully and how beautifully Christ's life on earth illustrated this law.. Entering our earthly life in the weakness of infancy, as it is appointed that all should enter it, He lovingly took what in the natural order is lovingly rendered, the sustenance, secured by labor, that one generation owes to its immediate successors. Arrived at maturity, He earned His own subsistence by that common labor in which the majority of men must and do earn it. Then passing to a higher — to the very highest-sphere of labor. He earned His subsistence by the teaching of moral and spiritual truths, receiving its material wages in the love offerings of grateful hearers, and not refusing the costly spikenard with which Mary anointed his feet. So, when He chose His disciples, He did not go to land-owners or other monopolists who live on the labor of others but to common laboring men. And when He called them to a higher sphere of labor and sent them out to teach moral and spiritual truths He told them to take, without condescension on the one hand, or sense of degradation on the other, the loving return for such labor, saying to them that the "laborer is worthy of his hire," thus showing, what we hold, that all labor does not consist in what is called manual labor, but that whoever helps to add to the material, intellectual, moral, or spiritual fulness of life is also a laborer. - The Condition of Labor

NOR should it be forgotten that the investigator, the philosopher, the teacher, the artist, the poet, the priest, though not engaged in the production of wealth, are not only engaged in the production of utilities and satisfactions to which the production of wealth is only a means, but by acquiring and diffusing knowledge, stimulating mental powers and elevating the moral sense, may greatly increase the ability to produce wealth. For man does not live by bread alone. He is not an engine, in which so much fuel gives so much power. On a capstan bar or a topsail halyard a good song tells like muscle, and a "Marseillaise" or a "Battle Hymn of the Republic" counts for bayonets. A hearty laugh, a noble thought, a perception of harmony, may add to the power of dealing even with material things.

He who by any exertion of mind or body adds to the aggregate of enjoyable wealth, increases the sum of human knowledge or gives to human life higher elevation or greater fulness — he is, in the large meaning of the words, a "producer," a "working-man," a "laborer," and is honestly earning honest wages. But he who without doing aught to make mankind richer, wiser, better, happier, lives on the toil of others — he, no matter by what name of honor he may be I called, or how lustily the priests of Mammon may swing their censers before him, is in the last analysis but a beggarman or a thief. — Protection or Free Trade, Chapter 7 econlib

... go to "Gems from George"