ECONOMIC PHILOSOPHY Suppose I build a factory costing, say, one hundred thousand dollars, and enter an untried field of manufacture. I pay out two hundred thousand dollars in wages and make a net profit of fifty thousand dollars. These figures are unimportant except as an illustration. I have made fifty per cent on my investment and the world says it is too much. It is too much, notwithstanding the fact that I take all the risk, make the experiment and demonstrate the possibilities of a new industry. I also pay a wage at which my employees are glad to work. Not one of them risks a day’s toil. But, because my profits are large, if for no other reason, I am certain to have competition next year. What shall I do with my fifty thousand dollars net profit? I can eat no more than I have eaten, and I cannot wear more than one suit of clothes at a time. I challenge anyone to tell me how I can keep my profit away from labor except by converting it into cash and locking it in a safe deposit box. Suppose I give my daughter a big wedding and spend much money for cut flowers. Cut flowers are nature’s sunshine plus management and labor. So management and labor get that. But management is compelled to spend its share as I spend mine, and thus it all goes directly or indirectly to labor. I build for my daughter a home and fill it with furniture, china, glass and silver. Both the house and its furnishings consist of lumber in the forest, ore in the ground, clay in the pit, white sand in the bank, and other raw materials, plus management, labor and transportation—and transportation is labor. Thus labor gets all except the portion which goes to management and capital, and management and capital are compelled to turn their respective shares into labor. Here the theoretical socialist and the scientist—I mean the man who recognizes that nothing is scientific except what stands the test of experience—part company. The socialist admits that cut flowers are sunshine plus labor and as sunshine receives no portion he demands that labor shall have it all. He forgets or refuses to recognize that without directing energy there would be no greenhouse, water system, heating plant or other essential of production. Labor and sunshine never produced anything better than a wild flower. Of course labor may and frequently does furnish the management. All the necessary equipment for the production of the various articles I have mentioned is the result of a directing genius which we call management.