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POLITICAL ECONOMY 
cheaper for the poor—and transparently 
more can be produced for the poor when their 
demand has to compete to a less extent 
with rich people’s demand for consumers’ 
goods. 
It has been counterclaimed above, as against 
the pessimists who dread lest wages should 
fall as more machinery is used, that the 
effect of using capital in production is to 
intensify the demand for labour, so that a 
bigger real wage will be paid when much 
capital is used than when little capital is 
used. The ground on which this counter 
claim rests is that the productivity of labour 
is enhanced with every additional accession 
of suitable appliances : and labour is remuner 
ated, if our theory is correct, in proportion 
to its productivity. The rate of interest 
may be very high, and the proportion of 
the national income absorbed by capitalists 
may be very large, but nevertheless t he capital 
must have added to the national product 
under normal conditions a larger amount than 
is paid for it. Another way of proving this 
conclusion is to derive it from the doctrine of 
consumers’ surplus ; for capital as well as 
labour is paid only its marginal worth, and the 
initial returns to capital are very much higher 
than the later returns. Hence there is a