Principles of Political Economy, Vol. 2Roscher, Wilhelm
General
Principles of Political Economy, Vol. 2
Roscher, Wilhelm
Economics
As the net national income, following the three great factors of all
economic production, is divided into three great branches, rent, wages
and interest on capital, the net income from any private business may be
reduced to one or more of these branches.[148-2] The three great
branches of income may be considered with advantage from a great many
different points of view. We may inquire in the case of each of them:
concerning its absolute magnitude, its relation to the aggregate
national income, to the magnitude of the factor of production, of which
it constitutes the remuneration; by what number of men it is shared, and
what number of wants it satisfies.[148-3] Lastly, the difference between
the amount stipulated for, and the original amount of both rent and
wages, as well as the interest of capital, is of special importance. The
former consists in the price paid by the borrower for the use of the
factor of production to the owner; the latter in the immediate products
which the employment of the same productive power brings on one's own
account. Evidently, the original amount is, in the long run, the chief
element in the determination of the stipulated amount. While the former
depends more on the deeper and more durably effective elements of price,
especially the cost of production, the value in use and the paying
capacity of purchasers; the latter is conditioned more by the
superficial variations of supply and demand, and even by custom. For our
purposes, the former is by far the more important, but, at the same
time, by far the more difficult to perceive.
[Footnote 148-1: This is possible between labor and capital,
at least in so far as a comparison can be instituted between
the sacrifice of human rest there is in labor and the
sacrifice of enjoyment in the building up of capital. But
the person who introduces an entirely unimproved piece of
land into the service of production, stands to the laborer
as well as to the capitalist in a relation which is entirely
incomparable with any other. (See § 156.) The doctrine of
former agriculturists, that one-half of the harvest was to
be ascribed to the soil and the other to the manure, would
not suffice here, even if it were correct. Compare _Fraas_,
Gesch. der Landbau- und Forstwissenschaft, 257. But in the
production of a calf, the coöperation of a bull and cow are
necessary. Yet no one is in condition to determine what
portion of the calf is to be accounted as belonging to
either. If the bull and cow belong to different owners, the
relation of supply and demand, and the deeper causes that
determine them, decide in what proportion the value of the
calf is to be divided among them.]
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