Spencer Heath Archive

Item 2775

Pencil notes on two kinds of pad paper, marked July 7, evidently taken by Heath’s daughter Beatrice O’Connell attending a lecture by Heath

1934 or 1935?

 

 

 

 

Free Capitalism versus Slave Collectivism

 

People who want a drastic social change don’t want any capitalism  — free or otherwise. Define capitalism.

 

Social Science — Political Economy

     Production ends only when article is in hands of consumer — H.G.

 

Exchange is greatest part of production. Raw materials at point of first exchange are only a small fraction of value of finished products. Begins with such activities as contemplate an exchange. Between these two points every operation is social with dependence or reliance on others — vast cooperative phenomena.

 

Competition — an arbiter of values

enables easy and precise exchanges — we know when the exchange is finished.

 

Substance of a commodity is essentially valueless because the accumulated services of many people are what gives it its value. Every commodity in course of exchange from time of plan of production to receipt by consumer.

 

This is capital:

     Goods in course of exchange

     Wealth used to create more wealth

     Fixed capital (some commodity not to be consumed but to

be used in other commodities

 

Capital: materials that labor uses and the facilities used by labor to produce commodities.

 

Money is credit

why is money called capital? It is not.

 

Money represents commodities or services you are going to receive.

 

Capitalism is use of capital.

 

Story of landowners deciding to pay the policeman.

 

Free capitalism is use of capital without coercion.

 

 

/Different pad paper following — different occasion?/

 

I Introduction

     Seeking of beauty

         To ameliorate condition — negative.

         To act creatively —

    

Applicable to society

     Usually considered in terms of

deficiencies and maladjustments

Reformers comparable to doctors of middle ages

(“chase out devils”) etc.

 

II Society compared to human organism

     Possesses all the attributes of lower forms,

plus composed of higher types of units

     Whole is greater than sum of its parts

         New functions due to relationships

     Fundamental process is exchange

 

III Universal phenomena is transfer of transformed energy

1. Physiological

Anabolism

     Structures built up and depleted

by transfer of energy

2. Sociological

1. Exchange of services

which creates division of labor

3. 1. Greater quantity
   2.   “     variety
   3.   “    difference in time

 

IV Economic Relationships

1. Exchange on a measured basis
2. Separate from family relationship

 

 

Function of banking

1. Free exchange — not “keeping money”
2. Gathering small savings (uncompleted exchange of  services) and lending to competent borrowers for greater interest.

 

Capital

1. Fixed
2. Circulating

Distribution only a factor in production

That which deals with raw materials

until it reaches consumer

Administration — of capital

Supervision — of personnel

Exchange not only between individuals but between     organizations, i.e. business unit with an administrator

1. gathers other people’s services (raw materials)
2. attaches to them the labor of the workers in the business
3. gathers in exchange all the gross profits

for all the labor performed in the production

Administrator pays all expenses, wages of raw material, labor, capital, and what is left is his wage — or profit. That is just what he earns, according to his efficiency unless there is outside interference.