# Principles of Political Economy (J.S. Mill, 1871), vol. 1/Book II, Chapter III

CHAPTER III.
OF THE CLASSES AMONG WHOM THE PRODUCE IS DISTRIBUTED.
§ 1. Private property being assumed as a fact, we have next to enumerate the different classes of persons to whom it gives rise; whose concurrence, or at least whose permission, is necessary to production, and who are therefore able to stipulate for a share of the produce. We have to inquire, according to what laws the produce distributes itself among these classes, by the spontaneous action of the interests of those concerned: after which, a further question will be, what effects are or might be produced by laws, institutions, and measures of government, in superseding or modifying that spontaneous distribution.
The three requisites of production, as has been so often repeated, are labour, capital, and land: understanding by capital, the means and appliances which are the accumulated results of previous labour, and by land, the materials and instruments supplied by nature, whether contained in the interior of the earth, or constituting its surface. Since each of these elements of production may be separately appropriated, the industrial community may be considered as divided into landowners, capitalists, and productive labourers. Each of these classes, as such, obtains a share of the produce: no other person or class obtains anything, except by concession from them. The remainder of the community is, in fact, supported at their expense, giving, if any equivalent, one consisting of unproductive services. These three classes, therefore, are considered in political economy as making up the whole community.
§ 2. But although these three sometimes exist as separate classes, dividing the produce among them, they do not necessarily or always so exist. The fact is so much otherwise, that there are only one or two communities in which the complete separation of these classes is the general rule. England and Scotland, with parts of Belgium and Holland, are almost the only countries in the world, where the land, capital, and labour employed in agriculture, are generally the property of separate owners. The ordinary case is, that the same person owns either two of these requisites, or all three.
The case in which the same person owns all three, embraces the two extremes of existing society, in respect to the independence and dignity of the labouring class. First, when the labourer himself is the proprietor. This is the commonest case in the Northern States of the American Union; one of the commonest in France, Switzerland, the three Scandinavian kingdoms, and parts of Germany; and a common ​case in parts of Italy and in Belgium. In all these countries there are, no doubt, large landed properties, and a still greater number which, without being large, require the occasional or constant aid of hired labourers. Much, however, of the land is owned in portions too small to require any other labour than that of the peasant and his family, or fully to occupy even that. The capital employed is not always that of the peasant proprietor, many of these small properties being mortgaged to obtain the means of cultivating; but the capital is invested at the peasant's risk, and though he pays interest for it, it gives to no one any right of interference, except, perhaps, eventually to take possession of the land, if the interest ceases to be paid.
The other case in which the land, labour, and capital, belong to the same person, is the case of slave countries, in which the labourers themselves are owned by the landowner. Our West India colonies before emancipation, and the sugar colonies of the nations by whom a similar act of justice is still unperformed, are examples of large establishments for agricultural and manufacturing labour (the production of sugar and rum is a combination of both) in which the land, the factories (if they may be so called), the machinery, and the degraded labourers, are all the property of a capitalist. In this case, as well as in its extreme opposite, the case of the peasant proprietor, there is no division of the produce.
§ 3. When the three requisites are not all owned by the same person, it often happens that two of them are so. Sometimes the same person owns the capital and the land, but not the labour. The landlord makes his engagement directly with the labourer, and supplies the whole or part of the stock necessary for cultivation. This system is the usual one in those parts of Continental Europe, in which the labourers are neither serfs on the one hand, nor proprietors on the other. It was very common in France before the Revolution, and is still much practised in some parts of ​that country, when the land is not the property of the cultivator. It prevails generally in the level districts of Italy, except those principally pastoral, such as the Maremma of Tuscany and the Campagna of Rome. On this system the division of the produce is between two classes, the landowner and the labourer.
In other cases again the labourer does not own the land, but owns the little stock employed on it, the landlord not being in the habit of supplying any. This system generally prevails in Ireland. It is nearly universal in India, and in most countries of the East; whether the government retains, as it generally does, the ownership of the soil, or allows portions to become, either absolutely or in a qualified sense, the property of individuals. In India, however, things are so far better than in Ireland, that the owner of land is in the habit of making advances to the cultivators, if they cannot cultivate without them. For these advances the native landed proprietor usually demands high interest; but the principal landowner, the government, makes them gratuitously, recovering the advance after the harvest, together with the rent. The produce is here divided as before, between the same two classes, the landowner and the labourer.
These are the principal variations in the classification of those among whom the produce of agricultural labour is distributed. In the case of manufacturing industry there never are more than two classes, the labourers and the capitalists. The original artisans in all countries were either slaves, or the women of the family. In the manufacturing establishments of the ancients, whether on a large or on a small scale, the labourers were usually the property of the capitalist. In general, if any manual labour was thought compatible with the dignity of a freeman, it was only agricultural labour. The converse system, in which the capital was owned by the labourer, was coeval with free labour, and under it the first great advances of manufacturing industry were achieved. The artisan owned the loom or the few tools he ​used, and worked on his own account; or at least ended by doing so, though he usually worked for another, first as apprentice and next as journeyman, for a certain number of years before he could be admitted a master. But the status of a permanent journeyman, all his life a hired labourer and nothing more, had no place in the crafts and guilds of the middle ages. In country villages, where a carpenter or a blacksmith cannot live and support hired labourers on the returns of his business, he is even now his own workman; and shopkeepers in similar circumstances are their own shopmen, or shopwomen. But wherever the extent of the market admits of it, the distinction is now fully established between the class of capitalists, or employers of labour, and the class of labourers; the capitalists, in general, contributing no other labour than that of direction and superintendence.