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

Collection:: Economics Books

A FUNCTIONAL THEORY OF ECONOMIC PROFIT 333 economic factors involved are owned respectively by the laborer, the capitalist, and the entrepreneur. Our immediate problem therefore is to “disentangle” this joint product into three func- tional shares, namely wages, interest and profit. It should be noted, before proceeding with our analysis, that organization, which capital at first made a possibility, and finally a necessity, appears to be the dominant factor. So essential has organization become that labor and capital, if they are to have a part in socialized production at all, must find places in organ- ized relationship to each other in some business unit. While these business units are organized and directed as going concerns by labor, they are owned by entrepreneurs. This becomes the central fact in our analysis; for it is the property right in the organiza- tion as such on which rests both the dominance of the entre- preneur in modern industry and his right to a distinctive func- tional share of the joint product. The business unit may now be characterized as a complex of socialized economic opportunities for portions of capital and for portions of labor. These organization opportunities may be designated, for lack of a better term, as “artificial,” in order to distinguish them from natural opportunities (those connected with land). These opportunities, whether for portions of labor or for portions of capital, are evidently varied in quality. Diversity in the quality of the organization opportunities in which separate “units of labor” and separate “units of capital” must be placed for effective team work is an attribute of the very nature of organization. There are “many members, but one body.” This diversity of opportunity may be brought into clearer per- spective by application of the principle of diminishing produc- tivity. At this point in our analysis it should be noted, for the sake of clearness, that the business unit, viewed as a complex of economic opportunities, comprises in static industry two distinct, though interrelated, groups of such opportunities. These may be desig- nated respectively as the labor-group and the capital-group. “Units of labor” introduced into the business unit would be placed in opportunities for labor, and correspondingly “units of capital” into those for capital. To proceed now with our analysis, if we assume, as does Pro- fessor Clark, that the capital at the disposal of the organizer of

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