Economic essays

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Identifikator:: 1753623200

URN:: urn:nbn:de:zbw-retromon-136107

Document type:: Monograph

Title:: Economic essays

Place of publication:: New York

Publisher:: Macmillan

Year of publication:: 1927

Scope:: viii, 368 S.; Ill., graph. Darst.

Digitisation:: 2021

Collection:: Economics Books

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Document type:: Monograph

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Title:: Elasticity of supply as a determinant of distribution / Paul H. Douglas

Collection:: Economics Books

16 ECONOMIC ESSAYS IN HONOR OF JOHN BATES CLARK i. | m - duction upon distribution. While personal distribution is, of ourse, not identical with functional distribution, since one man, uch as a farmer, may receive an income from land, labor and apital, nevertheless for the great masses of men the economic plavses tend to conform to the categories. Thus the wage-earners eceive but a small fraction of their income from the interest on heir capital holdings, while the possessors of large fortunes derive ost of their income from returns on their property. A change in the ratios received by factors will then alter the relative income f individuals. If a factor then increases its share of the national income, the uestion is important as to whether it will spend this increased ercentage upon goods in which there is much labor but little capital or waiting, or for articles or services in which there is elatively little labor and much capital or waiting.* Thus, let us uppose that labor were to receive a larger proportion of the total product than before, if it were to expend its gains upon rticles in which an extraordinarily large amount of waiting had gone, then the demand for capital and consequently its marginal roductivity would go up by far more than would be the case were labor to buy articles and services in which only a small quantity of capital was embodied. Conversely, if it were to buy rticles in which much labor was embodied, it, as a class, would profit still further from the increased demand and increased marginal product which would result. Hence the more labor pur- chases personal services, the more laborers will profit from the existing national income, while the more capitalists buy products in which a large amount of capital is contained the more capital ill profit. The suggestion presents itself from this that since the recipients f large amounts of interest spend a much larger fraction of their income upon personal services in the form of servants, enter- tainers, etc., and buy goods upon which a great deal of hand ork has been lavished, that an increase in return to the apitalists would be partially offset by the increased demand for labor which would result. The rise in demand for chauffeurs, utlers, custom tailors and violinists would increase the wages or teamsters, bakers, cutters and general labor. 1 am indebted to my friend and colleague, Jacob Viner, for calling m ttention to this set of influences. SEES

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