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.