The elements of political economy, with some applications to questions of the day . l operate. Itmakes a great difference whether these principles operateon the high level of a great quantity of product or on thelow level of a small quantity of product. If the share oflabor varies, as compared with the share of capital, in thetwo cases it will vary on different levels. The height ofthe line A might represent the productiveness of an in-dustry in theUnited States,and that of Bthe relativeprod uctive-ness of thesame industryin Europe. IfA and B aredivided in thesame propor-tion (say one tenth fo
The elements of political economy, with some applications to questions of the day . l operate. Itmakes a great difference whether these principles operateon the high level of a great quantity of product or on thelow level of a small quantity of product. If the share oflabor varies, as compared with the share of capital, in thetwo cases it will vary on different levels. The height ofthe line A might represent the productiveness of an in-dustry in theUnited States,and that of Bthe relativeprod uctive-ness of thesame industryin Europe. IfA and B aredivided in thesame propor-tion (say one tenth for interest and nine tenths for wages),the share for capital, I, and the share for wages, W, willbe much greater in the case of A than of B, In the firstcase, the point of division will be on the level of X, and in * This will be true also between parts of the same country, differ-ently favored by Nature, so long as competition between them is notfree. If labor and capital will not move freely between them, the ratesof wages and interest may be higher in one part than in l8o DISTRIBUTION. the second case on the level of Y, Now, if there are vari-ations in the shares of wages and interest relatively to eachother (while the total product remains the same), the pointof division will move up and down about the level of X forA, as indicated by the curved line, and for B up and downabout the lower level of Y. We have not yet found out,of course, where to draw the point of division betweenwages and interest (that is, the places X in A and Y inB); that is our problem in Book III. But, when we doarrive at this principle, we must remember that it makes avast difference whether it applies to a large or small divi-dend, to A or to B. If a father dies leaving his propertyto his two children in equal shares, it makes a great differ-ence, so far as the share of each child is concerned, whethereach receives one half of a large or one half of a small fort-une. 166. It is also to be rem
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Keywords: ., bookcentury1800, bookdecade18, booksubjecteconomics, bookyear1887
