184

POLITICAL  ECONOMY

it  would  be  as  well  not  to  apply  the  term
“  profit  ”  to  the  payment  of  the  employer
for  his  positive  activities  in  undertaking
and  organising  production,  apart  from  his
gains  as  a  capitalist  ;  but  unfortunately
there  is  no  suitable  short  term  to  indicate
what  we  have  in  mind.
The  appearance  of  a  theory  of  payment
for  employing  was  comparatively  late  in  the
history  of  political  economy  ;  the  reason  being,
no  doubt,  that  early  employers  were  largely
working  with  their  own  capital,  and  that  their
earnings  were  commonly  reckoned  as  a  percentage ­
  on  their  capital.  In  the  economic
writings  of  past  generations  we  invariably  find
more  or  less  confusion  between  payment  for
capital  and  payment  for  employing.
In  order  to  make  sure  of  avoiding  the
pitfalls  into  which  some  economists  have
fallen,  we  shall  take  the  seemingly  eccentric
course  of  arguing  on  the  false  assumption
that  every  employer  is  working  entirely  with
borrowed  means  ;  in  which  case  all  that  he
received  would  be  on  account  of  the  work
that  he  did,  including  his  enterprise.  We
shall  also  continue  provisionally  to  make  the
assumption  that  all  employers  are  equal  in
capacity,  application  and  character  generally.
Now  imagine,  to  begin  with,  that  in  a