336 ECONOMIC ESSAYS IN HONOR OF JOHN BATES CLARK 
Attention is here called to the exception. The ownership of 
durable “artificial” production goods is not viewed by the writer * 
as an essential element in the function of the entrepreneur. The 
usance as distinguished from the ownership of such goods is alone 
necessary, and this can be secured like that of land by lease. 
The differential that the marginal productivity principle allots 
to the exceptional opportunities for capital which “artificial” 
instruments offer, belongs economically to the owner of the 
instruments. The differential in this case as clearly constitutes 
the functional income of the owner as does the differential of 
land constitute the functional income of the owner of land. The 
ownership of all durable production goods, of which land is 
typical, is regarded by the writer as a distinctive economic fune- 
fion, and the functional income attaching to it is economic rent. 
By way of summary, it appears from our analysis that eco- 
nomic profit exists in static industry as the distinctive functional 
income of the entrepreneur. It seemingly comprises two distinct 
differential elements, namely, first, the product of the supra- 
marginal (exceptional) opportunities inherent in the nature of the 
business unit for the employment of equal “units of labor,” and 
second, the product of supra-marginal (exceptional) opportunities 
inherent in the nature of the business unit for the productive use 
of equal “units of capital.” The business unit is here char- 
acterized as a complex of opportunities of varied quality for 
equal “units of labor” and for equal “units of capital.” To the 
entrepreneur as owner of the business unit these differential ele- 
ments belong. They contain no admixture of wages or of interest, 
and therefore constitute the entrepreneur’s functional share. It 
is the prize which lures men in static industry to assume the func- 
tion of business ownership. The conclusion is reached that the 
law of marginal productivity, which was first applied by the 
Ricardians to separate as a differential the rent of land (here 
viewed as typical of the rent of all durable production goods) 
serves likewise to determine, directly, economic wages and eco- 
nomic interest, and at the same time to separately identify, as a 
clear differential, economic profit as the functional income of the 
entrepreneur. 
! “The Function of the Entrepreneur,” American Economic Review. 
Vol. XVII, pp. 17-18.