"Capital is a result of labor, and is used by labor to assist it in further production. Labor is the active and initial force, and labor is therefore the employer of capital"

Henry George articulates a foundational view of the relationship between labor and capital, emphasizing the primacy of labor in economic production. He asserts that capital, tools, machinery, infrastructure, and even accumulated wealth, is not a form of wealth that exists independently of people’s efforts, but rather the result of prior labor. All the instruments used for further production were themselves shaped, built, or developed through human exertion. Bridges, factories, machines, and inventories only come into being because labor first acted upon natural resources to create them.

From this standpoint, capital supports labor by enhancing productivity and enabling more complex or large-scale production, but it is labor that animates the economic process. Labor is the initiator, the creative force that transforms nature and shapes the wealth that societies enjoy. Without human effort, mental or physical, capital would neither exist nor be employed; a plow or a computer is inert until someone provides the skill and intention to use it toward productive ends.

George’s formulation turns common perceptions about the employer-employee relationship on their head. Instead of seeing capital as the employer and labor as its dependent, he reverses the logic: Labor employs capital. That is, individuals and workers draw upon the accumulated tools and resources created by previous generations of work to drive new enterprise and value. Even entrepreneurs, often regarded as capital’s champions, initiate their ventures through labor, by conceiving ideas, developing products, or building organizations.

Fundamentally, George’s perspective celebrates labor as the essential, dynamic force in any economy. Capital, valuable as it may be, is subordinate and instrumental, a set of means fashioned by labor to amplify its productive power. Understanding labor as the employer of capital challenges assumptions about economic power and dependency, encouraging a reevaluation of how wealth is created and to whom the fruits of production rightly belong.