The area _BCD_ of the first figure is, under static conditions, exactly equal to the area _A'B'D'E'_ of the second figure, because _ACDE_ represents the whole product, _BCD_ in the first figure represents all that is left of it after wages, measured by _ABDE_, are paid; and we know by evidence both theoretical and practical that the capitalist, whose share is directly expressed by _A'B'D'E'_ of the second figure, can claim and get the whole of this amount. _Wages as a Residuum._--It is clear that the same reasoning applies to wages. In the second figure they are represented as a residuum. The area _B'C'D'_ represents what the _entrepreneur_ has left after paying interest, and nobody can get this amount but the wage earner. The reason, however, why the wage earner can get it is that free competition will give him the amount _ABDE_ of the first figure, and this, under perfectly static conditions, must equal _B'C'D'_ of the second. Under perfect competition the _entrepreneur_ cannot have any of the amount _B'C'D'_ left in his hands after meeting the claims that the wage earner makes on him. On the other hand, he must have enough left to pay interest, since otherwise he would be incurring a loss, and that could not fail to force him and others who are in the same situation to contract their operations or go out of business. If the output of goods is reduced, either by the retirement of some employers or the curtailment of product by all, the price of what continues to be sold will be raised to the point at which wages and interest can be paid. _Wages and Interest both adjusted at Social Margins of Production._--It is to be noted that wages and interest are fixed at the social margin of production, which means that they equal what labor and capital respectively can produce by adding themselves to the forces already at work in the general field of employment. In making the supposition that, owing to some disturbing fact, a particular _entrepreneur_ has not enough after paying wages to pay interest, we assume that the rate of interest is fixed, in this way, in the general field and not merely in his establishment. If _B'C'D'_ were larger than _ABDE_, the _entrepreneur_ would be selling goods for more than cost and realizing a net profit, which he cannot do in a static state; but a pure profit is not only possible but actual in a dynamic state.