Economic essays

Bibliographic data

Monograph

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

Usage license:: Get license information via the feedback formular.

Chapter

Document type:: Monograph

Structure type:: Chapter

Title:: The enterpreneur and the supply of capital / George E. Barnett

Collection:: Economics Books

THE ENTREPRENEUR AND THE SUPPLY OF CAPITAL 17 A new theory of profits—the labor management theory—was the outcome. This theory was based not so much on a historical analysis of the changes in the capital market as on observation of existing facts. But there are some passages in Walker and Marshall which indicate that they were not unconscious of these changes and of their significance. Walker says: English and American economists, in general, have chosen to regard the capitalist as the employer of labor, that is, as employing labor merely because of the possession of capital and to the extent only to which he possesses capital. . . . In the later stages of industrial devel- opment the possession of capital no longer constitutes the sole or even the main qualification for employing labor. . .. So important and difficult are these duties, so rare are the abilities they demand, that he who can discharge these will generally find the capital required. If he be the man to conduct business, food, tools, and materials will not, under our modern system of credit, long be wanting to him. . . . It is no longer true that a man becomes the employer of labor because he is a capitalist. Men command capital because they have the qualifications to employ labor. To men so endowed, capital and labor alike resort. . . . By this is not meant that the employer is not in any case or to any extent a capitalist, but that he is not an employer to the extent only to which he is a capitalist nor is he an employer at all because he is a capitalist.® It is interesting to observe the gradual development of Mar- shall’s view of profits. In the Economics of Industry (1886 ed.) a very large part of the discussion of earnings of management deals with the relative advantages of trading on borrowed capital and on owned capital. He came to the conclusion that “men trading with borrowed capital seem likely to displace to a great extent those trading with their own.” This view was based on the opinion that the man who owns little capital will be content with lower earnings of management.® In the Principles, how- ever, the emphasis is laid primarily on ability to obtain capital as the necessary condition for business power to receive profits. Thus, in spite of vicissitudes, the able business man generally finds that in the long run the capital at his command grows in proportion to his ability.® Meanwhile . . . he who with small ability is in command of a large capital speedily loses it. ... These two sets of forces, the one increasing the capital at the command of able men and the other destroying the capital that is in the hands of weaker men bring about * Walker, F. A., Political Economy, 3rd ed., pp. 233-234. P. 136. * 3rd edition, p. 390

Access restriction

Copyright

fullscreen: Economic essays

Monograph

Chapter

Table of contents

Download

Monograph

Chapter

This page

Image fragment

Citation links

Citation recommendation