Economic Principles

Book may have numerous typos, missing text, images, or index. Purchasers can download a free scanned copy of the original book (without typos) from the publisher. 1918. Not illustrated. Excerpt: ... CHAPTER 26 ENTERPRISE 1. Factors of production must be combined. 2. Non-contractual and contractual incomes. 3. From small shop to large factory. $ 4. The residifal share. 5. The typical owner-manager. 0. Empirical methods of estimating and apportioning the residual share. 7. Utmost possible degree of separation of investment and management. 8. Corporations and their control. 9. Single investment function of minority stockholders. 1. Factors of production must be combined. Every separate thing that enters into the making of goods is called an economic agent; as in agriculture, the seeds, plows, fields, fences, barns, cattle, and labor; in manufacture, the buildings, machines, material, labor, etc. But these numerous agents fall into two great groups called factors of production, variously named as man and nature, labor and material agents, or humanity and wealth. We have studied separately the processes by which value is attributed to these agents, yet we have borne in mind always that they are complementary agents and complementary factors. (See Chapter 18, section 10, and Chapter 19, section 14.) Labor in a void and wealth without labor would be equally useless. The process of valuing uses of goods and services of labor goes on while all of these goods help make up the situation in which the desires exist. The stock of economic goods of whatever sort is limited, while the upspringing desires are practically unlimited. To increase goods, labor is applied to material objects. Man's part in production is almost passive when goods come into existence without his effort. One can imagine the indolent savage of the tropics, lying under the banana-tree, letting the fruit drop into his mouth. But at least he mu...