Essays of Benjamin Franklin

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Monograph

Identifikator:: 1752429486

URN:: urn:nbn:de:zbw-retromon-127700

Document type:: Monograph

Author:: Franklin, Benjamin http://d-nb.info/gnd/118534912

Title:: Essays of Benjamin Franklin

Place of publication:: New York

Publisher:: G. P. Putnam's Sons

Year of publication:: 1927

Scope:: xi, 273 Seiten

Digitisation:: 2021

Collection:: Economics Books

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Document type:: Monograph

Structure type:: Chapter

Title:: XXVI. To Count de Vergennes

Collection:: Economics Books

ELASTICITY OF SUPPLY AS A DETERMINANT OF DISTRIBUTION 79 would also be little or no increase in the supply of labor price. The increased wage would lead to a higher standard of living and hence to a decrease in the birth-rate. This being so, the workers could improve their position at the expense of the capitalists and relative bargaining strength alone determined the amounts which each would secure. Other bargain theorists, such as Davidson, Ira Steward, George Gunton,” and others either made similar assumption or blithely took for granted that the supplies would not be altered. The modern residual theories of distribution, notably those of Taussig and Kleene, postulate almost infinitely elastic supply curves of one factor but tend to regard the supply of the other as unconnected with the return to it. Thus to Taussig ® the joint product of labor and of capital has deducted from it the rate of interest, with the result that the residual goes to labor. This rate of interest Taussig imagines has been historically steady through time, although as a matter of fact it seems to have varied greatly from decade to decade, and this to him seems to be proof that there is a “broad margin of savings.” If the rate of interest rises through technical progress or from some other cause, there will be such an outpouring of savings as will bring the rate back to the point where the broad margin is located. If the rate of interest should fall, then the supply of capital would fall off so greatly that its relative scarcity would cause its price to rise again and ultimately find its way back to its original figure. There is thus an “effective rate of accumulation” and the joint product is discounted at an approxi- mately constant rate, with the residue going in wages. Kleene * has a somewhat similar theory, although with him the rate of wages is the constant and not the rate of interest. He rejects the broad margin of savings but postulates a broad margin of population growth in the non-capitalistic areas of the world where he believes the principle of Malthusianism still holds. Through migration within and emigration from these countries, this rate of procreation establishes the wages of unskilled labor in capitalistic countries and upon these in turn, with appropriate differentials. the rates for skilled labor are based. An increase * John Davidson, The Bargain Theory of Wages. * Gunton, Wealth and Progress. rn *F. W. Taussig, “Outlines of a Theory of Wages,” Publications of the American Economic Association, 3rd series (1910), Vol. II, pp. 136-50; Principles of Economics, Vol. II. 2 GG. A. Kleene. Profits and Waaes.

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