Economic essays

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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

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Document type:: Monograph

Structure type:: Chapter

Title:: A functional theory of economic profit / Charles A. Tuttle

Collection:: Economics Books

326 ECONOMIC ESSAYS IN HONOR OF JOHN BATES CLARK they produce,” and “that this is done within the forms of law, and by the natural working of competition.” In the preface of his Distribution of Wealth he says:* It is the purpose of this work to show that the distribution of the income of society is controlled by a natural law, and that this law, if it worked without friction, would give to every agent of production the amount of wealth which that agent creates. Yet the residuary principle as applied by Professor Clark in determining the entrepreneur’s share is by no means in harmony with his general principle of distribution,—the marginal produc- tivity principle; but it appears to be, rather, in Professor Hol- lander’s phrase, “a nominal but illogical exception to it.” This will appear upon a critical examination of Professor Clark’s theory. Distribution, as Professor Clark conceives it, is “primarily functional rather than personal.” Accordingly, a person’s income from socialized industry “depends on the incomes attaching to the functions he performs.” A separation of economic functions, therefore, is regarded as essential in the analysis of distribution; and a separate study of each of the functions and of the income attaching to it is represented as important, and not the less so because of the fact “that one man usually performs more than one of them.” It may be noted here that Professor Clark recognizes but three distinctive economic functions. His triad of functions comprises that of the laborer, that of the capitalist, and the function of the entrepreneur. The function of landownership, which the classical economists had differentiated from that of capitalist, appears to be merged in the latter function; while the entrepreneur-function is differentiated from that of the capitalist with which the classical economists had confounded it. Had Professor Clark clearly differentiated capital as a fund of productive wealth, expressible in terms of money, from the production goods (“capital goods”) in which capital is invested, he must have agreed with the writer of this paper, that the ownership of dur- able production goods, of which land is typical, constitutes a dis- tinctive economic function which entitles the one who performs it to a distinctive functional share,—economic rent. In his view, ' The Distribution of Wealth, 1899, Preface, p. v.

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