_Values at a Static Level only when Entrepreneurs' Gains are Nil._--Any net profit on an _entrepreneur's_ part means that his product is selling for more than the elements of it have cost him. But this is a condition which, if labor and capital are as mobile as the static hypothesis requires that they should be, will cause this _entrepreneur_ and others to move labor and capital into his industry, thus increasing its output and lowering the selling price of its product. If there is no such action going on, it shows that the _entrepreneurs_ have no incentive for taking it. _Values at a Static Level only when the Gains of Labor in the Different Industries are Equalized._--If labor is creating more in one subgroup than in others, as it often is in a dynamic condition, that fact means that some _entrepreneurs_ are making a profit, and, according to the principle stated in the preceding paragraph, this means that values are not at their static or "natural" level. If, owing to new methods or to some other cause, a given amount of labor[2] in the subgroup that produced the A''' of our table creates an amount of that product which sells for more than the B''' or the C''' which labor of like quantity makes, then the manufacturers of A''' would obviously get a margin of profit. They would not be obliged to pay for labor any more than the market rate, and that, as we shall see, cannot exceed what labor produces in the groups B''' and C'''. In A''' the labor creates more and the employer pockets the difference. In saying this we assume one fact which we undertake later to prove; namely, that there is a definite amount of each product which can be attributed to labor alone as its producer. Capital and labor work together, but each is, in effect, the creator of a certain fraction of their joint product. [2] In measuring labor we, of course, take account of the quality of the men who perform it, and the work of a skillful man is counted as more units of labor than that of an unskillful one. _Values Static only when the Gains of Capital in Different Industries are Equalized._--If capital is creating more in one industry than in another, there is a margin of profit for the _entrepreneurs_ in the exceptionally productive industry. They pay as interest on the capital they use only the market rate, which is what equal amounts of capital can produce and get elsewhere. If they produce more in the one group, the _entrepreneurs_ there can pocket the excess as they did in the case of the product of labor. We assume that there is everywhere a definite product that can be attributed to capital alone.