72  POLITICAL  ECONOMY
to  decreasing  returns  would  pass  into
actuality
The  realistic  laws  of  increasing  and  decreasing ­
  returns  are  derived  from  observation
of  actual  economic  conditions  ;  in  short,  they
are  inductively  established  ;  but  at  the  same
time,  as  in  the  case  of  other  inductive  generalisations, ­
  for  their  complete  explanation  deduction ­
  must  be  enlisted.  The  realistic  law  of
increasing  returns  declares  that  an  enlargement ­
  of  a  manufacture  is  usually  accompanied ­
  by  increasing  returns.  The  law  holds
generally  because  manufacture  is  seldom
confronted  with  a  dearth  of  any  essential
agents  which  play  a  part  in  settling  the  cost
of  production.  The  new  labour,  the  new
machines,  the  new  employers  are  not  likely  to
prove  inferior  in  any  marked  degree  to  those
already  incorporated  in  the  industry.  Material
may  be  an  exception,  but  in  most  manufacturing ­
  the  cost  of  material  forms  a  small  part  of
the  cost  of  production.  It  is  not  probable,
therefore,  that  in  manufacture  the  economies
of  specialism  associated  with  expansion  will
meet  with  any  serious  counteracting  influences.
The  realistic  law  of  decreasing  returns  proclaims ­
  that  efforts  to  obtain  larger  supplies  of
natural  products  are  usually  accompanied  by
decreasing  returns.  Obviously,  in  the  deter-