CHAPTER X

THE PROBLEM OF PROFITS

THE EMPLOYER'S SHARE IN DISTRIBUTION

TH profits of the employer of labour remain for consideration.
 Are these arbitrary or do definite
principles determine their amount? It is clear that mere
possession of a producing establishment will not suffice to
ensure an income to its possessor. Where one man realises
loss, another secures substantial profits. The capacity of
the management determines whether the one or the other
result is secured. In older discussions, the revenue of the
owner and manager of capital were hardly differentiated.
The capitalist-employer was the central figure demanding
consideration. He was undertaker of business management
and risks, and employer of labour, because, and to the
extent to which, he was a capitalist. Changes have come
over the organisation of business. The manager may be to
some extent a capitalist, but the quantity of capital he
controls is not limited to what he owns, or even to what he
tan borrow on his personal credit or on the security of his
property. The joint-stock form of business organisation
has enabled managing ability to be more readily associated
with opportunity for its profitable exercise. The possessor
of the managing power may be the possessor of capital
totally inadequate to enable him to use that power effectively.
The owner of capital may lack disposition or ability to
venture the capital in an enterprise under his own direction,
These circumstances have, however, much less power than
formerly to prevent the acquisition of control of capital by