188

POLITICAL  ECONOMY

output  of  the  industry  will  increase,  inasmuch
as  the  same  amount  of  labour  and  capital
at  least  will  be  employed  in  the  industry,
while  more  effective  use  will  be  made  of  them
in  view  of  the  larger  number  of  employers.
We  must  also  allow  for  the  fact  that  an
alteration  in  the  number  of  employers  through
its  effect,  for  instance,  on  the  specialism  of
businesses,  might  in  itself  render  the  industry
more  or  less  productive.  A  new  position  of
equilibrium  will  eventually  be  reached  at
which  the  surplus  left  in  each  business  for  the
employer  is  less.  This  movement  will  continue ­
  until  the  surplus  remaining  for  employers
is  just  sufficient  to  induce  the  continued
functioning  in  the  industry  of  as  many
employers  as  there  are.
Were  the  surplus  too  small  instead  of  too
large,  some  employers  would  be  working  at  a
rate  of  pay  at  which  it  was  not  worth  their
while  to  continue  working.  Gradually,
therefore,  employers  would  begin  to  desert
the  industry,  and  no  others  would  take  their
place,  since  it  has  been  supposed  that  the
earnings  are  insufficient  to  attract  any  fresh
organising  talent  into  the  industry.  Consequently, ­
  for  reasons  already  explained,
businesses  would  expand  in  size,  and  the
surplus  left  for  employers  would  become