Essentials of economic theory, as applied to modern problems of industry and public policy . roductive; and itis highly productive where land and tools are plenti-ful. There is no doubt that crowding the world fullof people, without providing the world with capitalin a proportionate way, would impoverish everybodywhose income depends on labor. The Law of Wages. — Even though labor createsthe amount ABDE, itis not yet perfectlyclear that it will be ableto get that aught we now knowthe entrepreneur maykeep some of it, and foraught we know he maykeep some of the quan-tity BCD which is
Essentials of economic theory, as applied to modern problems of industry and public policy . roductive; and itis highly productive where land and tools are plenti-ful. There is no doubt that crowding the world fullof people, without providing the world with capitalin a proportionate way, would impoverish everybodywhose income depends on labor. The Law of Wages. — Even though labor createsthe amount ABDE, itis not yet perfectlyclear that it will be ableto get that aught we now knowthe entrepreneur maykeep some of it, and foraught we know he maykeep some of the quan-tity BCD which is dis-tinctly the product ofcapital. Let us see whether he can in reality with-hold any part of ABDE, which is the product oflabor. Wages under Perfect Competition. — In the staticstate that we have assumed, competition works with-out let or hindrance. It does not work thus in theactual world, and we shall in due time take accountof the obstacles it encounters-; but what we are nowstudying is the standards to which such competitionas there is — and it is in reality very active — is. 144 ESSENTIALS OF ECONOMIC THEOP:Y tending to make wages conform. We want to knowwhat would happen in case this competition encoun-tered no hindrance at all. This would require thata workman should be able to set employers biddingagainst each other for his services just as activelyas an employer can make laborers bid against eachother in selling their services. If this were the case,every unit of labor could get what it produces, nomore and no less. Even a single man, offering him-self to one employer after another, would virtuallycarry in his hands a potential product for sale. Hiscoming to any mans mill would mean more goodsturned out in a year by the mill; and if one employerwould not pay him for them at their market value,another one would. The final unit of social laborcan get, under perfectly free competition, the value ofwhatever things that labor, considered apart fromcapital, brings i
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