Ferdinand Lassalle on the Wages of Abstinence

In his 1864 book “Capital and Labor,” Ferdinand Lassalle wrote on the description of capital income as “wages of abstinence,” i.e. payment for abstaining from consumption. What he had to say is one of the funniest things ever written on the topic:

The profit of capital is the ‘wage of abstinence.’ Happy, even priceless expression! The ascetic millionaires of Europe! Like Indian penitents or pillar saints they stand on one leg, each on his column, with straining arms and pendulous body and pallid looks, holding a plate towards the people to collect the wages of their abstinence. In their midst, towering up above all his fellows, as head penitent and ascetic, the Baron Rothschild! This is the condition of Society! How could I ever so much misunderstand it!

  • TheBrett

    Every wealthy family started with abstinence from immediate consumption somewhere, be in the current generation or a previous one. Some also shifted to it after a prior business failed, like the Krupps:

    Alfred Krupp (born Alfried Felix Alwyn Krupp), son of Friedrich Carl, was born in Essen in 1812. His father’s death forced him to leave school at the age of fourteen and take on responsibility for the steel works. Prospects were daunting: his father had spent a considerable fortune in the attempt to cast steel in large ingots, and to keep the works going the widow and family lived in extreme frugality. The young director laboured alongside the workmen by day and carried on his father’s experiments at night, when not touring Europe trying to make sales. It was during a stay in England that young Alfried became enamored of the country and adopted the English spelling of his name.

  • Mark

    lol. Worked his way up from nothing but an inherited steel works. Gosh, if only his workmen had been so frugal, they’d have become industrial tycoons as well!

  • TheBrett

    The point was about abstinence from consumption, which they did for years -as the excerpt points out, they lived very frugally and worked alongside the workers to keep the plant. Why not just sell the plant, buy a farm (or set up a different, easier business), and then live comfortably with a higher level of consumption?

  • Mark

    Ah no, I think you’re missing the point. This is in the context of a quote from “Capital and Labor” — a work which I haven’t read, but presumably is mocking the idea that the differing returns to capital and labor come solely from capitalists’ greater frugality. Which is completely absurd. Frugality plus capital (like a steel works) gets you a lot farther than frugality alone, else Krupp’s workers could’ve become as wealthy as he did. And of course, the frugality isn’t even necessary — an Alfred Krupp is the exception rather than the rule, since the wealth of capitalists often stems entirely from their access to capital.

    Perhaps it’s cliché to quote Marx on primitive accumulation here, but the myth that every wealthy family started with abstinence from consumption is exactly what these guys were trying to criticize back in the 1860s:

    “This primitive accumulation plays in Political Economy about the same part as original sin in theology. Adam bit the apple, and thereupon sin fell on the human race. Its origin is supposed to be explained when it is told as an anecdote of the past. In times long gone by there were two sorts of people; one, the diligent, intelligent, and, above all, frugal elite; the other, lazy rascals, spending their substance, and more, in riotous living. The legend of theological original sin tells us certainly how man came to be condemned to eat his bread in the sweat of his brow; but the history of economic original sin reveals to us that there are people to whom this is by no means essential. Never mind! Thus it came to pass that the former sort accumulated wealth, and the latter sort had at last nothing to sell except their own skins. And from this original sin dates the poverty of the great majority that, despite all its labour, has up to now nothing to sell but itself, and the wealth of the few that increases constantly although they have long ceased to work. Such insipid childishness is every day preached to us in the defence of property. M. Thiers, e.g., had the assurance to repeat it with all the solemnity of a statesman to the French people, once so spirituel. But as soon as the question of property crops up, it becomes a sacred duty to proclaim the intellectual food of the infant as the one thing fit for all ages and for all stages of development. In actual history it is notorious that conquest, enslavement, robbery, murder, briefly force, play the great part.”

    Rather than capital as a remnant of historical abstinence, they were arguing that many capitalists’ fortunes came from expropriation, slavery, and oppression. For every Krupp (who still inherited a steel works) there were other capitalists who never had to be frugal because they achieved all their wealth on the backs of others.

  • Michael Cleaves

    OK, so there’s abstinence from consumption somewhere along the line. That still doesn’t answer the question of what level of reward the person is entitled to. These arguments aren’t any better than the “it was labor!” or “it was reward for risk!” arguments: there’s never a precise index between investment and return, so they don’t really justify anything unless you’re already convinced it was just.

  • Frank Bolton

    Every wealthy family started with abstinence from immediate consumption somewhere, be in the current generation or a previous one.

    Well, no shit. If I refrain from lighting a billion-dollar pile of bills to indulge my pyromania, my future heirs are only wealthy by virtue of my abstinence from immediate consumption. But then again, if I only set half of that pile of money on fire, my supreme act of instant gratification wastefulness to the tune of 500 million dollars still allows a grotesque accumulation of capitalism. Le sigh.

    Thanks for completely failing to set the parameters of the term ‘abstinence’ and ‘immediate consumption’ and especially ‘somewhere’, thus redefining the terms of the debate into uselessness.

  • zebbart

    The wages of abstinence could justify interest income on a debt investment but not dividends on an equity investment. It is indeed worth something if your neighbor will decline to consume his just deserts so that you can use them – and it costs him something too, so it is fine that he be paid some preset and finite wage for it. But an ownership interest that accumulates in perpetuity with no annual limit is not the wages of abstinence.