Ifindustrywereinfacttheirrational，unjustandutterlyinhumananarchyitissometimesrepresentedtobe，itwouldnotholdtogetherfortwenty-fourhours。Notmerelyistheindividualbusinessinitsnormalstateafinelyadjusted，accurately-workingcomplexofhumanskill，industryandcooperativegood-will，butthelargerandlesscentralisedstructures，whichwecalltradesandmarkets，showawonderfulintricacyoforderintheirformandworking。TofeedthethousandsofmillsandworkshopsofEnglandwithafairlyregularsupplyofcountlessmaterialsdrawnfromthewideworld，tofeedthemillionsofmouthsofourpeoplewiththeirregularsupplyofdailyfood，arenotableachievementsofindustrialorder。
Inconcentrating，aswemust，ourchiefthoughtuponthedisorderofthesystem，theplaceswhereitfails，andthedamageofsuchfailure，wegainnothingbyexaggeratingtheindustrialmaladiesandtheirsocialinjuries。
Theproportionsoforderanddisorder，healthanddisease，humancostandhumanutility，intheworkingofourindustrialsystemarebestascertainedbyturningoncemoretoourconcretemassofwealth，ourincome，andenquiringintothequantitativemethodofitsdistribution。
Inexaminingthehumancostsinvolvedinagivenoutputoflabour-powerandofotherproductiveenergywerecognisedthatverymuchdependedupontheconditionsofthatoutput，andparticularlyuponthelengthandintensityoftheworking-dayandworking-week。
Similarly，inexaminingthehumanutilitygotfromtheconsumptionofagivenquantityofgoods，werecognisedthatitwilldependuponthesortandthenumberofpersonswhoreceiveitforconsumption。
SofrombothsidesofthequestionweapproachthecentralissueofthedistributionofWealth。
Ifthe£；2，000，000，000ofgoodswerefoundtobesodistributedinthemodesoftheirproductionastoinvolvenoburdenoftoilandnoinjuryupontheproducers，whiletheyweresodistributedinincomeastoinvolvenowasteordamageinconsumption，thehumanutilityitrepresentedwouldreachamaximumandcostwouldbezero。
If，ontheotherhand，thesamegoodswerelargelyproducedbyill-nourishedlabourers，workinglonghoursunderbadhygienicconditions，andusingcapitallargelyfurnishedbythepainfulandinjurioussavingofthepoor，whilethedistributionofthegoodswassuchastoassignthebulkofthemtoasmallaffluentclass，themasseslivingonabaresubsistencelevel，thehumanutilityofsuchasystemwouldbeverysmall，itshumancostverygreat。Judgedindeedfromanyrightstandardofcivilisation，anindustrialsocietyofthelattersortmightrepresentaminusquantityofhumanwelfare。
Theremightevenbetwonationsofequalpopulationandeconomicincome，equallyprosperousfromthestandpointofstatisticsofcommerce，whichnevertheless，byreasonofthedifferentapportionmentofworkandincome，stoodpolesasunderineverytruecountofhumanprosperity。
§；3。NowtheHumanLawofDistribution，initsapplicationtoindustry，aims，aswehaveseen，todistributeWealth，inrelationtoitsproductionontheonehandanditsconsumptionontheother，soastosecuretheminimumofHumanCostsandthemaximumofHumanUtility。Nobareruleofabsoluteequality，baseduponthedoctrineofequalrights，equalpowersorequalneeds，willconducetothisresult。Thenotionthattheclaimsofjusticeorhumanitywouldbemetbyrequiringfromallpersonsanequalcontributiontothegeneraloutputofproductiveenergyismanifestlyfoolishandimpracticable。
Torequirethesameoutputofenergyfromastrongasfromaweakman，fromanoldasfromayoung，fromawomanasfromaman，toignorethoseactualdifferencesofage，sex，health，strengthandskill，wouldberejectedatonceasapreposterousapplicationofhumanequality。
Ifsuchanequaloutputwererequired，itcouldonlybeobtainedbyanaveragetaskwhichwouldundulytaxthepowersoftheweak，andwouldwastemuchofthepowersofthestrong。Asimilarhumaneconomyholdsoftheprovisionofcapitalthroughsaving。Toimposesavinguponworkingfolkwhoseincomebarelymaintainsthefamilyefficiency，whenotherfolkpossesssurplus-incomesoutofwhichthesociallynecessarycapitalcanbeprovided，isamanifestlywastefulpolicy。Thosewhohavenotruepowertosaveshouldnotbecalledupontoundergothis'cost':allsavingshouldcomeproportionatelyoutofhigherincomeswhereitinvolvesnohumansacrifice。Alike，asregardslabourandcapital，thetruesocialeconomyisexpressedintheprinciplethateachshouldcontributeinaccordancewithhisability。
Itshouldbesimilarlyevidentthatexactequalityofincomesinmoneyoringoodsforallpersonsisnotlesswasteful，orlesssociallyinjurious。
Icannotprofesstounderstandbywhatreasoningsomeso-calledSocialistsdefendanidealorderinwhicheverymemberofsociety，man，womanandchild，shouldhaveanabsolutelyequalshareofthegeneralincome。Theneedsofpeople，theircapacitytogetutilityoutofincomesbyconsumingit，arenomoreequalthantheirpowersofproduction。Neitherinrespectoffood，orclothing，orthegeneralmaterialstandardofcomfort，cananysuchequalityofneedsbealleged。Tosaythatabigstrongman，givingoutacorrespondinglylargeoutputofenergy，needsexactlythesamesupplyoffoodasasmallweaklyman，whoseoutputisathirdasgreat，wouldbeasridiculousastopretendthatafifty-horsepowerengineneedednomorefuelthanaten-horsepowerone。
Norwillthedifferencesinonesetofneedsbecloselycompensatedinanother。Mankindisnotequalinthesensethatallpersonshavethesamenumberoffacultiesdeveloped，orcapableofdevelopment，tothesameextent，anddemandingthesameaggregateamountofnutriment。Tomaintaincertainordersofproductiveefficiencywilldemandamuchlargerconsumptionthantomaintainothers。Becausedifferencesofincomeandexpenditureexistatpresentwhicharemanifestlyunjustandinjurious，thatisnoreasonforinsistingthatalldifferencesareunwarrantable。Equalityofopportunitydoesnotimplyequalitybutsomeinequalityofincomes。Foropportunitydoesnotconsistinthemerepresenceofsomethingwhichamancanuse，irrespectiveofhisowndesiresandcapacities。Abanquetdoesnotpresentthesameamountofopportunitytoafullmanastoahungryman，toaninvalidastoarobustdigestion。
£；1，000，spentinlibraryequipmentforuniversitystudents，representsfarmoreeffectiveopportunitythanthesamesumspentonlibraryequipmentinacommunitywherefewcanreadorcaretoreadanybookworthreading。
Equalityofopportunityinvolvesthedistributionofincomeaccordingtocapacitytouseit，andtoassumeanabsoluteequalityofsuchcapacityisabsurd。
Itmaynodoubtbeurgedthatitisdifficulttomeasureindividualneedsandcapacitiessoastoapplythetrueorganicmodeofdistribution。
Thisistrueandanypracticalrulesforadjustingincome，orfordistributionoftheproduct，accordingtoneeds，willbelikelytoinvolvesomewaste。
Butthatisnoreasonforadoptingaprincipleofdistributionwhichmustinvolvegreatwaste。Howeverdifficultitmaybetodiscoverandestimatedifferencesofneedsinindividualsorclassesofmen，toignorealldifferencesinsuresamaximumofwaste。For，assuming，asitdoes，asingleaverageorstandardman，towhichtypenoactualmanconforms，itinvolvesanecessarywasteineachparticularcase。Everyone，inaword，wouldunderthismechanicalinterpretationofequalitypossesseitheralargerorasmallerincomethanhecoulduse。Suchadoctrine，thoughsometimespreachedbypersonswhocallthemselvessocialists，isreallyasurvivaloftheeighteenth-centurydoctrineofindividualrights，graftedontoatheoryoftheuniformityofhumannaturethatiscontradictedbytheentiretrendofscience。
Thislevellingdoctrineonlyservestobuttresstheexistingformsofinequality，bypresentingintheguiseofreformaspuriousequality，thefollyandthewasteofwhichareobviouseventotheleastreflectingofmankind。
§；4。Distributionofincomeaccordingtoneeds，orabilitytouseit，doesnot，indeed，dependforitspracticalvalidityupontheapplicationofexactanddirectmeasurementsofneeds。Thelimitsofanysortofdirectmeasurementevenofmaterialneedsappearinanydiscussionofthescienceofdietetics。Butinexactthoughsuchscienceis，itcanfurnishcertainvalidreasonsfordifferentstandardsoffoodindifferentoccupations，andforotherdiscriminationsrelatingtorace，age，sexandvigour。Whatholdsoffoodwillalsoholdofhousing，leisure，modesofrecreationandintellectualconsumption。Normustitbeforgottenthat，forexpenditure，thefamilyisthetrueunit。Thesizeandageofthefamilyiscertainlyarelevantfactorinestimatingneeds，andinanydistributiononaneedsbasismustbetakenintoaccount。
Publicbodies，andlesscommonlyprivateforms，infixingsalariesandwages，areconsciouslyguidedbysuchconsiderations。Theideaistoascertainthesumwhichwillmaintainaworker，withorwithoutafamily，inaccordancewitheconomicefficiency，andhavingregardtotheacceptedconventionsoftheclassfromwhichhewillbedrawn。Havingdeterminedthis'proper'salaryorwage，theyseektogetthebestmanforthework。
Itistruethattheconventionalfactorloomssobiginthisprocessasoftentoobscurethenaturaleconomy。WhenitisdeterminedbyamunicipalitythatitsTownClerkoughtothave£；1500ayearanditsdustman22s。
aweek，itappearsapalpablestrainingoflanguagetosuggestthatdifferencesof'needs'correspondtothisdescrepancyofpay。For，thoughitistruethatintheexistingstateofthemarketforlegalabilityandexperiencethetownmaynotbeabletogetareallygoodtownclerkforless，thatstateofthelegalmarketisitselftheresultofartificialrestrictionsinopportunityofeducationandofcompetition，whichhavenonaturalbasisandwhichasocietyversedinsoundsocialeconomywillalter。Butthefactthattheexistinginterpretationofneedsisfrequentlyartificialandexaggeratedmustnotleadustoignoretheelementoftruthembodiedinit。Thewagesofpolicemen，therealwagesofsoldiersandsailors，aredeterminedwithconsciousrelationtotheneedsofable-bodiedmenengagedinhardphysicalwork，andwithsomeregardtotheexistenceofawifeandfamily。ButIneednotlabourthepointofthedifferencebetweenthesalaryandthe'commodity'viewoflabour。Theacceptanceamongallthoughtfulemployersof'theeconomyofhighwages'appliedwithinreasonablelimitsisitselftheplainesttestimonytotheactualityofthe'needs'
basisofincome。Thatunlessyoupayamanenoughtosatisfyhisneeds，youcannotgetfromhimhisfullpowerofwork，isapropositionwhichwouldmeetwithuniversalacceptance。
Butitwillcommonlybeaddedthatthesafestwayofmeasuringneedsisbymeansofoutput。Thisoutput，measuredbywork-time，orbypiece，orbyacombinationofthetwo，stillremainsthegeneralbasisofpayment。
Howfaristhisconformabletoourtheoryofhumandistribution，accordingtoneeds？Thatthereissomeconformitywill，Ithink，beeasilyperceived。
Ifonedockerunloadstwiceasmuchgrainortimberasanotherdockerinthesametime，orifonehewerworkingunderthesameconditions'gets'
twiceasmuchcoalasanother，thereisareasonablepresumptionthatthelargeractualquantityoflabourhastakenagooddealmore'outofhim'。
Puttingthecomparisononitsbarestphysicalbasis，therehasbeenalargerexpenditureoftissueandofenergy，whichmustbereplacedbyalargerconsumptionoffood。Astrongmandoingmuchworkmaynotbeexertinghimselfmorethanaweakmandoinglittlework。Butallthesamethereissomeproportionbetweentherespectivevaluesoftheiroutputofphysicalenergyandtheirintakeoffood。This，ofcourse，isapurelyPhysiologicalapplicationofourlawofhumandistribution。Itappliesbothtosortsofworkandtoindividualcasesinthesamesortofwork，andconstitutesan'organic'basisfordifferenceof'class'wagesandindividualwages。
Weurgethatitisapplicabletootherfactorsofconsumptionthanfood，andthroughoutthewholeareaofproductionandconsumption。Butappliedasapracticalprinciplefordeterminingdistinctionsofclassorgradepayment，andstillmoreforindividualpaymentwithinaclass，ithasaverylimitedvalidity。Rigorouslyapplieditisthepure'commodity'viewoflabour，theantithesisofthe'salary'viewwhichbestexpressesthe'needs'economy。But，thoughoutputcannotbetakenasanaccuratemeasureof'needs'forthepurposeofremuneration，itclearlyoughttobetakenintoaccount。Thepracticalreformerwillindeedrightlyinsistthatitmustbetakenintoaccount。Forhewillpointoutthatoutputisaquestionnotmerelyofphysiologicalbutstillmoreofmoralstimulus。
Astrongmanwillnotputoutmoreproductiveenergythanhisweakerfellowunlessheknowsheistogetmorepay；askilfulmancannotbereliedupontousehisfullskillunlesshepersonallygainsbydoingso。Ifthesenseofsocialservicewerestrongerthanitis，abonusforextrastrengthorskillmightbeunnecessary。Butashumannatureactuallystands，thisstimulustodoa'best'thatisbetterthantheaverage，mustberegardedasamoral'need'tobecountedforpurposesofremunerationalongwiththephysiologicalneeds。Toomuchneednotbemadeofthisdistinctivelyselfishfactor。Inmanysortsofwork，indeed，itmaynotbelargeenoughtoclaimrecognitioninremuneration。Butwhereitisimportant，theapplicationofourneedseconomyofdistributionmustprovideforit。Thisadmissiondoesnotintheleastinvalidateourorganiclaw。Forthemoralnatureofamanisas'natural'ashisphysicalnature。Bothareamenabletoeducation，andwitheducationwillcomechangeswhichwillhavetheirjustreactionsuponthepolicyofremuneration。
§；5。Theorganiclawofdistributioninregardingneedswill，therefore，takeasfullanaccountasitcanbothoftheunityandthediversityofhumannature。Therecognitionof'common'humanitywillcarryanadequateprovisionoffood，shelter，health，educationandotherprimenecessariesoflife，soastoyieldequalsatisfactionofsuchrequirementstoallmembersofthecommunity。Thisminimumstandardoflifewillbesubstantiallythesameforalladultpersons，andforallfamiliesofequalsizeandage。Uponthisstandardofhumanuniformitywillbeerectedcertaindifferencesofdistribution，adjustedtothespecificneedsofanyclassorgroupwhoseworkorphysicalconditionsmarksitoutasdifferentfromothers。Thepresentinequalitiesofincome，solargelybaseduponconventionalortraditionalclaims，wouldfindlittleornosupportunderthisapplicationoftheorganiclaw。Indeed，itseemsunlikelythatanyspecificrequirementsofindustrialorprofessionallifewouldbulksolargelyininterpretinghumanneedsastowarrantanywidediscriminationofincomes。Thereseemsnoreasontomaintainthatalawyer'soradoctor'sfamilywouldrequire，orcouldadvantageouslyspend，alargerincomethanabricklayer's，inasocietywhereequalityofeducationalandotheropportunitiesobtained。
But，iftherewereanysortsofworkwhich，byreasonofthespecialcallstheymadeuponhumanfaculties，orofthespecialconditionstheyimposed，requiredanexpenditureoutofthecommon，theorganiclawofdistributionaccordingtoneedswouldmakeprovisionforthesameasanadditiontothestandardminimum。Solikewisethehoursoflabourwouldbevariedfromastandardworking-daytomeetthecaseofworkunusuallyintenseorwearinginitsincidence。Towhatextentsocietywouldfinditnecessarytorecogniseindividualdifferencesofefficiencywithineachgradeasagroundforparticularremuneration——andhowfarsuchclaimswouldrepresent，notpaymentaccordingtotrueneedsbutpowertoextortapersonalrent——
isaquestionwhichcanonlybeansweredbyexperience。Itmay，however，beregardedascertainthatthehighindividualrentswhichprevailatpresentinskilledmanualandmenialwork，couldnotbemaintained。Forthesehighratesdependuponconditionsofsupplyandofdemandwhichwouldnotthenexist。Theenormousfeeswhichspecialistsofreputeinthelawormedicinecanobtaindepend，partly，upontheinequalityofeducationalandsocialopportunitiesthatlimitsthesupplyofablemenintheseprofessions；
partly，uponotherinequalitiesofincomethatenablecertainpersonstoaffordtopaysuchfees。Equalityofopportunityandevenanapproximateequalisationofincomewoulddestroyboththesesourcesofhighrentsofability。Whatappliesintheprofessionswouldapplyineverytrade。Individual'rents'ofabilitymightsurvive，buttheymustbebroughtwithinanarrowcompass。
While，then，theselfishnessofindividualmanmightgiveaslighttwisttotheapplicationofthesocialpolicyofdistributionaccordingtoneeds，itwouldnotimpairitssubstantialvalidityandpracticability。
Thusweseethislawofdistribution，operativeasapurelyphysicaleconomyintheapportionmentofenergyformechanicalwork，operativeasabiologicaleconomythroughthewholerangeoforganiclife，isstrictlyapplicableasaprincipleofsocialeconomy。Itsproperapplicationtosocialindustrywouldenablethatsystemtofunctioneconomically，soastoproducethemaximumofhumanutilitywiththeminimumofhumancost。
§；6。Ifwecangetanindustrialorder，inwhicheverypersonisinducedtodiscoverandapplytotheserviceofsocietyhisbestabilitiesofbodyandmind，whilehereceivesfromsocietywhatisrequiredtosustainandtodevelopthoseabilities，andsotolivethebestandfullestlifeofwhichheiscapable，wehaveevidentlyreachedaformallysoundsolutionofthesocialproblemonitseconomicside。Wearenowinapositiontoapproachtheactualprocessesofeconomicdistributionthatprevailto-day，soastoconsiderhowfartheyconformtothissoundprincipleofhumanindustry。
Wearenotjustifiedattheoutsetinassumingthatanywidediscrepancywillbeadmitted。Onthecontrary，inmanyquarterstheresurvivesafirmconvictionthatouractualsystemofindustrydoesworkinsubstantialconformitywiththehumanlawofdistribution。
Theso-calledlaissez-fairetheoryofindustrialismbaseditsclaimstoutilityandequityuponanassertionofthevirtualidentityoftheeconomicandthehumandistribution。Ifeveryownerofcapitalorlabouroranyotherfactorofproductionwerefreetoapplyhisfactorinanyindustryandanyplacehechose，hewouldchoosethatindustryandthatplacewherethehighestremunerationforitsemploymentwasattainable。
Butsinceallremunerationforthefactorsofproductionisderivedfromtheproductitself，whichisdistributedamongtheownersoftheseveralfactors，itfollowsthatthehighestremunerationmustalwaysimplythemostproductiveuse。Thus，bysecuringcompletemobilityofcapitalandlabour，weensurebothamaximumproductionandanequitabledistribution。
'Ledasbyaninvisiblehand'，everyownerofcapital，labourorotherproductivepower，disposedofhisfactorinamanneratoncemostserviceabletotheproductionofthegeneralbodyofwealthandmostprofitabletohimself。Theapplicationofthistheory，ofcourse，assumedthateverybodykneworcouldgettoknowwhatemploymenthewouldbelikelytofindmostprofitableforhiscapitalorlabour，andwouldusethatknowledge。Itwas，moreover，heldthattheactualconditionsofindustryandcommercedidandmustsubstantiallyconformtothishypothesisofmobility。Anycircumstances，indeed，whichcontraveneditbyobstructingthemobilityandlibertyofemploymentweretreatedasexceptional。
Suchexceptionsweremonopolies，theexclusiveownersofwhichforbadefreedomofentryorofcompetitiontooutsidecapitalandlabour，andsecuredhigherratesofprofitthanprevailedinotherbusinesses。Theharmonyofperfectindividualismdemandedthatallsuchmonopolies，togetherwithprotectivedutiesandotherbarrierstocompletelibertyofcommerceandofindustry，shouldberemoved。Allproductivepowerwouldthenflowlikewaterthroughthevariousindustrialchannels，maintainingauniformlevelofefficientemployment，theproductbeingdistributedinaccordancewiththeseveralcostsofitsproductionandbeingabsorbedintheprocessesofproductiveconsumptionthatwererequiredtomaintainthecurrentvolumeofproductivepowerortoenhanceit。
Therewasalittledifficultyinthecaseofrentsofland。Thoughdifferentialrents，measuringthesuperiorproductivityofvariousgradesoflandascomparedwiththeleastproductivelandinuse，werenecessarypaymentstolandowners，theycouldnotrankascostsandcouldnotbeproductivelyconsumed。Solikewisewiththescarcityrents，paidevenfortheleastproductivelandswherethesupplyforcertainuseswasrestricted。Bothscarcityanddifferentialrentswereclassedassurplus。Butthoughthemagnitudeofthisexceptionalelementmightseemtohavebeenafatalflawintheindividualistharmony，acharacteristicmodeofescapewasfoundinthedoctrineofparsimonywhichprevailed。
Thougheconomicrentscouldnotbeproductivelyconsumedbytheirrecipients，theyfurnishedanaturalfundofsavings，soprovidingthegrowingvolumeofnewcapitalwhichwasnecessarytosetlabourtoproductivework。So，byasomewhatliberalinterpretation，itwascontendedthat'thesimplesystemofnaturalliberty'，evenoperatingonabasisofprivateownershipofland，drewfromeachmanthebestandfullestuseofhisproductivepowers，andpaidhimwhatwaseconomicallynecessarytomaintainandtoevokethosepowers。Earlycriticsofthistheory，ofcourse，pointedoutthattheinterpretationofdistribution'accordingtoneeds'wasdefectivefromthestandpointofhumanity，sincetheonlyneedstakenintoaccountwereefficiencyforproductivework，thenourishmentandstimulustoproducealargerquantityofmarketablegoods，nottheattainmentofthehigheststandardofhumanwell-being。
Buttomosteconomistsofthatdaysuchacriticismseemedunmeaning，sodominantintheirmindswastheconceptionofeconomicwealthastheindexandtheinstrumentofhumanwelfare。
§；7。Itiscommonlyassertedandassumedthatthislaissez-fairetheoryisdead，andthattheattainmentofaharmonyofsocialwelfare，bythefreeintelligentplayofindividualself-interestinthedirectionofeconomicforces，hasbeendisplacedbysometheoryofconsciouscooperativeorcorporatedirectioninwhichtheStatetakesaleadingpart。Butatthisverytime，whenthepolicyofeverycivilisednationisengagedmoreandmoreincheckingmonopoliesandindustrialprivilegesupontheonehand，andinplacingrestraintsuponthehavocofunfetteredcompetitionontheother，adistinctandpowerfulrevivalofaneconomictheoryofproductionanddistributionundistinguishableinitsessentialsfromthecrude18thcenturylaissez-fairehassetin。Largelyinfluencedbythedesiretoapplymathematics，soastosecureaplaceforeconomicsasan'exact'science，manyEnglishandAmericaneconomistshavecommittedthemselvestoa'marginalist'doctrine，whichforitsefficiencyrestsuponassumptionsofinfinitedivisibilityofthefactorsofproduction，andfrictionlessmobilityoftheirflowintoallthechannelsofindustryandcommerce。
Theseassumptionsgranted，capitalandlabourflowintoallemploymentsuntilthelastdropineachisequallyproductive，theproductsofthe'marginal'orfinaldropsexchangingonabasisofabsoluteequalityandearningfortheirownersanequalpayment。AmongEnglisheconomistsMr。
Wicksteedhassetoutthisdoctrineinallitseconomicapplicationsmostfully。Heshowshowbyadelicatebalanceofpreferences'atthemargins'
i。e。，inreferencetothelastportionofeachsupplyofordemandforanythingthatisboughtorsold，theremustbebroughtaboutanexactequivalenceofutility，ofworth，andofremuneration，forthemarginalincrementsinallemployment。'Sofarastheeconomicforcesworkwithoutfriction，theysecuretoeveryonetheequivalentofhisindustrialsignificanceatthepartoftheindustrialorganismatwhichheisplaced。'2Elsewhere3
heasseveratesthat，asregardstheworkersinanyemployment，thismeansthat'theyarealreadygettingasmuchastheirworkisworth，'andthatiftheyaretogetmore，this'more'canonlybegoteitheroutof'communalfunds，'orbymakingtheirworkworthmore。ThesameapplicationofthemarginalistdoctrineismadebyProfessorChapman。'Thetheory，then，merelydeclaresthateachpersonwilltendtoreceiveashiswagehisvalue——
thatis，thevalueofthismarginalproduct-nomoreandnoless。Inordertogetmorethanheactuallydoesget，hemustbecomemorevaluable，——
workharder，forinstance——thatis，hemustaddmoretotheproductinwhichheparticipated。'4Thisispreciselytheold'laissez-faire，laissez-aller'
teaching，fortifiedbytheconceptionthatsomespecialvirtueattachestotheequalisingprocesswhichgoeson'atthemargin'ofeachemploymentofthefactorsofproduction。
The'lawofdistribution'whichemergesisthateveryownerofanyfactorofproduction'tendstoreceiveasremuneration'exactlywhatitis'worth'。Nowthis'law'isdoublydefective。Itsfirstdefectarisesfromthefactthateconomicscienceassignsnoothermeaningtothe'worth'
or'value'ofanythingthanwhatitactuallygetsinthemarket。Tosay，therefore，thatanybody'getswhatheisworth'，ismerelyanidenticalproposition，andconveysnoknowledge。Theseconddefectistherelianceupona'tendency'whichfalselyrepresentsthenormalfactsandforces。
Itisfalseinthreerespects。Itassumesinthefirstplaceaninfinitedivisibilityoftheseveralfactors，necessarytosecuretheaccuratebalanceof'preferences'atthemargins。Itnextassumesperfectmobilityorfreedomofaccessforallcapitalandlabourintoallavenuesofemployment。Finally，itassumesastaticalconditionofindustry，sothattheadjustmentofthefactorsonabasisofequalproductivityandequalremunerationatthemarginsmayremainundisturbed。Allthreeassumptionsareunwarranted。
Veryfewsortsofrealcapitalorlabourapproachtheidealofinfinitedivisibilitywhichmarginalismrequires。Anindividualworker，sometimesagroup，isusuallytheminimal'drop'oflabour，andcapitalisonlyinfinitelydivisiblewhenitisexpressedintermsofmoney，insteadofplants，machinesorotherconcreteunits。Stilllessisitthecasethatcapitalorlabourflowsor'tends'toflowwithperfectaccuracyandlibertyofmovementintoeverychannelofemploymentwhereitisrequired，soastoaffordequalityofremunerationattheseveralmargins。Lastly，inmostindustrialsocietiestheconstantchangestakingplace，involumeandinmethodsofindustry，entailacorrespondingdiversityintheproductivityandtheremunerationofthecapitalandlabouremployedinthevariousindustries'atthemargin。'5
§；8。Thisslightlytechnicaldisquisitionisrenderednecessarybythewideacceptancewhich'marginalism'haswoninacademiccircles。
Itsexpositorsareabletodeducefromitpracticalpreceptsveryacceptabletothosepoliticiansandbusinessmenwhowishtoshowtheinjustice，thedamageandthefinalfutilityofallattemptsofthelabouringclasses，bytheorganisedpressureoftradeunionismorbypolitics，togethigherwagesorotherexpensiveimprovementsoftheconditionsoftheiremployment。
Forif'marginalism'canprovethat，asProfessorChapmanholds，'inordertogetmorethanheactuallydoesget，hemustbecomemorevaluable-workharder，forexample，'ithasevidentlyre-createdthedefencesagainsttheattacksoftheworkersuponthefortressesofcapitalwhichwereformerlysuppliedbythewage-fundtheoryinitsmostrigorousform。
Ifwagescanonlyriseonconditionoftheworkersworkingharderorbetter，nodivergenceofinterestsexistsbetweencapitalandlabour，noinjusticeisdonetoanyclassoflabour，howeverlowits'worth'maybe，andnoremedyexistsforpovertyexceptthroughimprovedefficiencyoftheworkers。Ifourpoliticaleconomistscanbringthisgospelofmarginalismhometotheheartsandheadsoftheworking-classes，theywillsetasidealltheirfoolishattempttogethigherwagesoutofrentsandpropertyandwillsetthemselvestoproducingbyharder，moreskilfulandmorecarefullabouranenlargedproduct，thewholeorpartofwhichmaycometothembytheinevitableoperationoftheeconomiclawofequaldistributionatthemargin!
Itisrighttoaddthatanattemptissometimesmadetobringmarginalismintoameasureofconformitywiththenotoriousfactthatlargediscrepanciesexistintheratesofremunerationforcapitalorlabourorbothinvariousindustries，bytreatingtheseinequalitiesasbrieftemporaryexpedientsforpromotingthe'freeflows'ofproductivepowerfromlesssociallyproductiveintomoresociallyproductivechannels，andforstimulatingimprovementsintheartsofindustry。Abnormalgains，ofthenatureofprizesorbonuses，arethusobtainablebyindividualemployment，orbygroupsofemployers，whoarepioneersinsomenewindustryorintheintroductionofsomenewinventionorothereconomy。Buttheserewardsofspecialmerit，itisargued，arenotlasting，butdisappearsosoonastheyhaveperformedtheirsociallyserviceablefunctionofdrawingintothefavouredemploymentstheincreasedquantityofnewproductivepowerwhichwillrestoretheequalityofproductivityandremuneration'atthemargins'。
Now，evenwereitpossibletoacceptthisrehabilitationoflaissez-fairetheory，acceptingthisequalising'tendency'aspredominantandnormal，andclassifyingallopposingtendenciesasmerefriction，itwouldnotsupplyalawofdistributionthatwouldsatisfytheconditionsofour'human'
law。Itwouldaffordnosecurityofdistributionaccordingto'needs'，orhumancapacityofutilisingwealthforthepromotionofthehigheststandardofindividualandsocialwelfare。Itwouldremainanideallygooddistributiononlyinthesensethatitwouldsoapportiontheproductastofurnishtoallproducersastimuluswhichwouldevoketheirbestproductivepowers，socontributingtomaximisetheaggregateproductionofmarketablegoods。Onlysofarasmanwasregardedasaneconomicbeing，concernedmerelyinthenourishmentandimprovementofhismarketablewealth-producingfaculties，woulditbeasoundeconomy。
Justasinthecaseoftheolder，cruder'freedomofcompetition'，itrestsuponthefundamentalassumptionthatalltheproduct，therealincomeofthecommunity，willbeabsorbedin'productiveconsumption'，defrayingthebare'costs'ofmaintainingandimprovingtheproductivepowersofcapital，labourandability，forthefurtherproductionofobjectiveeconomicgoodsandservices。Itwouldremainopentotheobjectionthatitassumedanidentityofeconomicwealthandhumanwelfarewhichisinadmissible，andthatitrefusedtoprovidethatsubordinationofeconomicproductionandconsumptiontothelargerconceptionofhumanwelfarewhichsoundprinciplesofhumanityrequire。Thoughallworkmightbemostproductivelyapplied，itmightstillcontainexcessiveelementsofhumancost，andthoughallproductswereproductivelyconsumedmanyofthefinerneedsofindividualmenandofsocietymightstillremainwithoutsatisfaction。
§；9。Butthefulldivergencebetweentheoperationoftheactualeconomiclawofdistributionandthehumanlawcanbestbediscoveredbyunmaskingthefundamentalfalsehoodofallformsofthelaissez-faireorcompetitiveeconomy，viz。，theassumptionthatthenationalincometendstobedistributedinajusteconomyofcosts。Isthereinfactanyoperativelawwhichdistributesor'tends'todistributethe£；2，000，000，000
worthofgoodsthatformourincome，sothatall，orevenmostofit，actsasanecessarYfoodandstimulustoevokethefullandbestproductiveworkofthosewhoreceiveit？Or，iftherearefailuresinthiseconomicaldistribution，aretheysofew，sosmall，andsoephemeral，thattheymayreasonablybetreatedas'friction'，orasthatadmixtureoferrororwastewhichisunavoidableinallhumanarrangements？
Nowitisofcoursetruethatthenationalincomemustcontinuallyprovideforthesubsistenceofthelabour，abilityandcapital，requiredtomaintaintheexistingstructureofindustryandthecurrentoutputofgoodsandservices。Thebrain-workersandthehand-workersofeverysortandgrade，fromartistandinventortoroutinelabourer，mustbecontinuouslysuppliedwiththematerialandnon-materialconsumablessufficienttoenablethemtoreplaceintheirownpersons，orthroughtheiroffspring，thephysicalandpsychicalwearandtearinvolvedintheirwork。Thefertilityofthesoil，therawmaterials，fuel，buildings，toolsandmachines，requisiteinthevariousproductiveprocesses，mustsimilarlybemaintainedoutofthecurrentoutput。Thesebarecostsofsubsistence，thewages，salariesanddepreciationfundsnecessarytoreplacethewearandtearofthehumanandmaterialagentsofproduction，areafirstchargeuponthenationaldividend。Torefusethepaymentswhichprovidethissubsistencewouldbesuicidalonthepartoftheadministratorsoftheincome。Theyrank，fromthestandpointofsociety6ascostsofproduction。Iftheproductwhichresultsfromtheproductiveuseofthesefactorsexceedswhatisnecessarytodefraythesecosts，thesurplusmaybeemployedineitheroftwoways。
Itmaybedistributedamongtheproductiveclassesinextra-paymentssoastoevokebyasetofeconomically-adjustedstimulisuchenlargedorimprovedefficiencyaswillprovideforalargerorabetterproductinthefuture。Inasocietyofaprogressiveorderwherethenumbersorthewholesomeneeds，orboth，areontheincrease，nosurplus，howeverlarge，canbeexcessiveforsuchprovision。Asociallysoundandjustdistributionofthesurpluswouldbeonewhichabsorbeditentirelyinwhatmaybecalledthe'costsofgrowth'。This，however，doesnotbyanymeansimplythatthewholeofthesurplusmustadvantageouslybedistributeddirectlyamongtheindividualownersoflabour，abilityorsavingpower，inordertoevokefromthemthemaximumextensionoftheirseveralproductivepowers。
Agooddealofthesurplusmay，indeed，bethusappliedinhigherindividualincomesofproducers。ButtheState，politicallyorganisedsociety，mustlooktothe'surplus'foritscosts，notonlyofupkeepbutofprogress。ForwhateverpartwemayassigntotheStateinaidingindustrialproduction，allwillagreethatmuchofitswork，intheprotectionandimprovementoftheconditionsoflife，isessentialtothestabilityandprogressofindustry，andinvolves'costs'whichcanonlybemetbyaparticipationintheindustrialdividend。
ItmayevenbeurgedthattheclaimsoftheStatetomaintenanceandprogressareequaltotheclaimsofindividualsuponthesurplus。Foritisevidentthatindustrialprogressdemandsthatbothindividualandsocialstimuliandnutrimentofprogressmustbeprovidedfromthesurplusbysomeconsideredadjustmentoftheirseveralclaims。Asurplus，thusproperlyapportionedinextra-subsistencewagesandotherpaymentstoproducersandinpublicincome，wouldbeproductivelyexpendedandwouldthuscontributetothemaximumpromotionofhumanwelfare。7
§；10。Butthoughinsuchasocietyasoursacertainpartofthesurplusisthus'productively'applied，andisrepresentedinindustrialandhumanprogress，alargepartisnotsoexpendedin'costsofprogress'。
Alargequantityof'surplus'iseverywheredivertedintounproductivechannels。Theincomewhichshouldgotoraisetheefficiencyoflabour，toevokemoresaving，andtoimprovethepublicservices，islargelytakenbyprivateownersofsomefactorofproductionwhoareinapositiontoextortfromsocietyapaymentwhichevokesnoincreaseofproductiveefficacy，butissheerwaste。Thispowertoextortsuperfluousandunearnedincomeisattherootofeverysocial-economicmalady。Indeed，itoftengoesbeyondthediversionofsurplusfromproductiveintounproductivechannels。
Itoftenencroachesuponcostsofmaintenance。Forthevitalstatisticsoflargeclassesoflabourshowthatthefood，housingandotherelementsofrealwages，areinsufficientfortheupkeepofanormalworkinglifeandfortherearingofahealthyandefficientoffspring。Thismeansthatsurplusisactuallyeatinginto'costs'，inthatthecostsofmaintenance，whichsoundbusinessadministrationautomaticallysecuresforthecapitalemployed，arenotsecuredforthelabour。Thereasonwhythispolicy，whichfromthesocialstandpointissuicidal，canneverthelessbepractised，isobvious。Forthecapital'belongsto'thebusiness，inasenseinwhichthelabourdoesnot。Asweatingeconomywhich'letsdown'theinstrumentsofcapitalisofnecessityunprofitabletotheindividualfirms:asimilarsweatingeconomyappliedtotheinstrumentsoflabourneednotbeunprofitable。
Tothenationasawhole，indeed，regardedmerelyasagoods-producingbody，anysuchwithholdingofthetruecostsofmaintenancemustbeunprofitable。
Buttherearebusinesses，ortrades，where'sweated'labourmaybeprofitabletotheemployersortheownersofcapital。Therearemanymorewheresuchawage-policy，thoughnotreallyprofitable，appearsso，andisactuallypractisedas'soundbusiness'。Howlargeaproportionofthe14，000，000
wage-earnerswhoseincomesarepaidoutofour£；2，000，000，000comeunderthiscategoryof'sweated'workers，wecannothereprofitablydiscuss。
But，apartfromthegreatbulkofcasualworkersinalllessskilledtrades，therearelargestrataofskilledandtrainedadult-labourinthestapletradesofthecountrywhicharenotpaidafullsubsistencewage。Sucharethelargebodiesofwomenemployedinfactoriesandworkshopsandinretailtrade，atwagesvaryingbetweeneightandfourteenshillings。Indeed，itmaysafelybeassertedthattheaveragewageofanadultworking-womaninthiscountry，notindomesticservice，isasweatingwage，definitelybelowtrueeconomicmaintenance，andstillmorebelowthedecenthumanrequirementsoflife。ThesamestatementalsoholdsofthewageofagriculturallabourinmostdistrictsofthemiddleandsoutherncountiesofEngland。
Insuchemploymentsthetrueeconomic'costs'ofmaintenancearenotprovidedoutof
thepresentdistributionofthenationalincome。Ofafarwiderrangeoflabourisittruethatthetruewagesofprogressiveefficiency，whichwehaveseenarevitaltotheeconomicprogressofthenation，arewithheld。Thoughthisdeprivationdoesnotformthewholecaseforlabourasstatedfromthe'human'standpoint，itconstitutestheheaviesteconomiccountagainstthecurrentdistributionofwealth。Thefullphysicalandspiritualnutriment，thematerialcomforts，theeducation，leisure，recreation，mobilityandbroadexperienceoflife，requisiteforanalert，resourceful，intelligent，responsible，progressiveworking-class，arenotprovidedeitherbythepresentwage-system，orbythegrowingsupplementswhichthecommunalactionoftheStateandthemunicipalityaremakingtotheindividualincomesoftheworkers。Outofthe£；2，000，000，000awhollyinsufficientsumisdistributedinwagesofprogressiveefficiencyforlabour。
Incertainotherrespectsalsothecurrent'costs'distributionisexceedinglydefective。Thesavingwhichgoestoprovidefortheenlargementofthecapitalstructureofindustryisverywastefullyprovided。Alargeproportionofsuchsavingsasarecontributedoutofworking-classincomesinvolvesanencroachmentupontheircostsofprogressiveefficiency，andrepresents，fromthestandpointbothoftheindividualfamilyandofsociety，badeconomy。Moreover，themethodsofcollectionandofapplicationofsuchcapitalaresowastefulandsoinsecureastorenderworking-classthriftabywordintheannalsofbusinessadministration。
§；11。Butthesedeficienciesintheeconomyof'costs'canonlybeunderstoodbyastudyofthatlargesectionofthenationalincomewhichinitsdistributionfurnishesnofoodorstimuluswhatevertoanyformofproductiveenergy。Evenintheidealistlaissez-faireeconomicswesawthatrentoflandwasdistinguishedfromthewages，interestandprofits，whichconstitutedthe'costsofproduction'，andwasdescribedas'surplus'。
Itwasrecognisedthat，wherelandwasrequiredforanyproductivepurpose，itsownerswouldreceiveinpaymentforitsuseanyportionoftheproduct，oritssellingvalue，whichremainedoverafterthecompetitivelydetermined'costs'ofcapitalandlabourhadbeendefrayed。Thepaymentwaseconomicallynecessarybecausesuitablelandformostindustrialuseswasscarce，andtheamountofthepaymentwoulddependuponhowmuchwasleftwhencapitalandlabourhadreceivedtheirshare。Forthelandlordwouldtakeallthesurplus。Therearethosewhostillinsistthattheownersoflandareeverywhereinthispositionofresiduarylegatees。Land，theythink，isalwaysrelativelyscarce，capitalandlabouralwaysandeverywhererelativelyabundant。Freecompetitionthenbetweentheownersoftherelativelyabundantfactorswill
keepdownthepriceforthemtobare'costs'，leavingamaximumamountofsurpluswhichtheso-calledland'monopolists'willreceiveasrent。
Thissurplusevokesnoproductivityfromthesoiloritsowners；itspaymentdoesnothingtostimulateanyartofindustry。But，ifthelandownerdidnottakeit，anditwaskeptbyfarmersasprofits，orbylabourersaswages，itwouldbejustaswastefulfromtheproductivestandpoint，asifitpassedasrent，for，uponthehypothesisofsucheconomists，thefullcompetitivewagesandprofitsaretheonlypaymententitledtocountascost，andnoadditiontosuchpaymentswouldincreasetheproductivityofcapitalorlabour。
§；12。Nowthoughtherehavebeentimesandcountriesinwhichrentoflandwastheonlyconsiderablesurplus，thisisnotthecaseinanydevelopedindustrialcommunitytoday。Otherfactorsofproduction，capital，ability，oreveninsomeinstanceslabour，sharewithlandthepowertoextortscarcityprices。
Thehypotheticalabundance，mobilityandfreedomofcompetition，whichshouldprevailamongallownersofcapital，abilityandlabour，keepingdownalltheirremunerationtoacommonminimum，areeverywherefalsifiedbyindustrialfacts。Atvariouspointsinindustrycapitalormanagerialabilityisfoundstronglyentrenchedagainstthecompetitionofoutsiders，andabletosetlimitsuponinternalcompetition。Whereverthisconditionisfound，theownersofthecapitalortheabilitysoadvantageouslyplacedareabletoobtaina'surplus'，which，initsoriginanditseconomicnatureandeffects，nowisediffersfromtheeconomicrentsofland。Thefluidityandcompletefreedomwhichappeartoattachtothetermcapital，solongaswetreatitinitsabstractfinancialcharacter，disappearassoonasforcapitalwesubstitutecertainskilfullymademachineryconstructedunderpatentrightsandoperatedbymoreorlesssecretprocesses，turningout，withtheassistanceofcarefullytrained。andorganisedlabour，goodswhichenjoyahalf-superstitiousfameandspecialfacilitiesofmarket。
Anexaminationofthecapitalistsystemwilldiscloseineveryfieldofindustrynumerousinstancesofbusinessesorgroupsofbusinesses，sometimesconstitutingwholetrades，whichbyreasonofsomeadvantageinobtainingrawmaterials，transportormarketingfacilities，publiccontracts，legalprivilegeorprotection，byusingsomesuperiorprocessofmanufacture，skillinadvertising，establishedreputation，financialbacking，orbysheermagnitudeofoperations，arescreenedfromthefullforceoffreecompetition，andareearninginterestandprofitsfarexceedingtheminimum。