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Savings invested in production is an act of charity Savings invested in production is an act of charity
Both fact and logic seem to me to support the view that savings invested in privately owned economic tools of production amount to an act of charity. And further, I believe it to be — as a type — the greatest economic charity of all.
By economic tools of production I mean, of course, things with exchange value — trucks, factories, railroads, stores — which assist human effort in the production of other items of economic worth.
Does saving and investment in these tools qualify as charity? Does it meet the three tests of an act of charity?
The first test is whether there has been a transfer of privately owned things having economic worth. It is true that when one saves and invests in a tool which he uses in production, although he retains title to the tool, most of the extra production which the tool makes possible passes on to others, as we shall see. For that reason the first requisite of an act of charity seems to be met as a certain consequence of saving and investment in tools. It is this feature of the creation of privately owned capital which is its charitable aspect.
The second test of charity is that the transfer of economic benefits shall be voluntary. Did anybody steal anything? Was anybody coerced? So long as the tools are privately owned and their use functions in a free market, the process has to be voluntary for everybody involved. But state ownership or control of tools, as is common in Russia, violates this requirement.
The third test of charity is anonymity. The charitable feature of savings and tools arises from the extra production that flows from it as a consequence and which goes in large degree to others than the one who saved and invested in the tool — to others than the owner of the tool. It is anonymous because the beneficiaries do not know its source. Most of them do not even know how they are benefiting from it at all. They do not know this because they have been victimized by a thorough saturation with the surplus value theory. They even think of themselves as being victimized by these capitalists who own the tools they are using.
One can easily test from his own experience the anonymity of the charity that flows from savings and investment in tools. If one will list all the economic items he consumes or enjoys in a day, the test is to try in each instance to name specifically all the persons whose savings and investment made the item possible. Most of us, I dare say, could not name even one person responsible for an item we use and enjoy. This illustrates the anonymity of the millions of unknown persons responsible for the things we enjoy.
So savings and the tools of production meet all three tests of charity, and thus qualify as charity. How many of the things we commonly call “charities” can equally qualify by these three tests?
A large part of the high level of economic living we now enjoy in the United States arises from the use of tools.
The average person in the United States has available for consumption upwards of ten times that of persons in the less prosperous half of the world. The reason for their poverty is a lack of savings invested in tools of production. In all their history over the ages they have accumulated little beyond the most primitive and simple tools, such as crude plows and hoes.
Harder work by us is not the reason why we can enjoy ten times as much economic welfare as they do. Persons in the United States work no harder, if as hard, as do the poorer half of the world’s population. Even including mental work along with sheer muscular effort, both of which contribute to output, I doubt if we work any harder — overall.
Nor does innate intelligence seem to explain the difference. We probably have no more geniuses per thousand population than they do.
Lacking any of our accumulation of tools, our output per worker probably would be even lower than that of the poorer half of the world at the present time; even their production is aided considerably by their simple tools. Comparison of their output with ours suggests that without any tools whatsoever our output would be reduced to perhaps one-twentieth of what it now is. To say it another way, perhaps 95 percent of our present output in the United States is made possible by the presence of our tools. These tools are available because in the past some wise people saved and invested in tools.
The next question is, Who gets this great increase in production? Evidence shows that a large part of it goes to others than those who did the saving and who hold the titles of ownership to the tools. It goes mostly to those who use the tools.
It has been estimated that only about 15 percent of the national income in the United States goes to the owners of capital as current income. 1 This is the amount of dividends, interest, rents, and royalties together with their equivalents in owner-operated businesses. The other 85 percent of the national income is paid currently for work, as distinguished from pay to owners for savings they have invested in tools. This figure for current work includes both wages paid to employees and its equivalent to those self-employed.
The question at once arises as to why so small a proportion of the product goes for capital, when capital is so highly productive? If we were to assume that those who save and invest in tools are entitled to the full increase in output that comes from the use of these tools as an aid to manual labor, it would appear from the evidence already given that justice would decree a division about like this: 95 percent for the owners and 5 percent for the users.
And so we may summarize:
Presuming these figures to be accurate, one must conclude that the saver-investor is receiving less than one-sixth of the return which his saving and investing has made possible — 15 received from the 95 produced. The other five-sixths of the increase goes to the users of the tools, enhancing their pay seventeen times — 85 received and 5 produced.
A person is lucky if by chance he happens to have been born in the United States where he can share directly in the bounty tools create. By having been born here he is enabled to work with tools that are now available because others have saved in the past. His income from current effort will, by these figures, be enhanced 17 times (85 versus 5) because of these tools. Had he been born where no tools had been accumulated whatsoever but would have to work as hard or even harder than in the United States, he would be getting only 1/17th as much for his labors.
This bounty to the users of tools is what I call the greatest economic charity.
These facts are significant in appraising Marx’s surplus value theory. Marx said, in effect, that the 15 percent which goes to the owners of the tools is surplus value because the user of the tool — according to Marx — deserves the full 100 percent.
It is from the productive power of tools as aids to the manual efforts of man that something which might be called a surplus value arises. This surplus, as has been indicated, has raised US production from a level of 5 to a level of 100.

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