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a pair of oxen to pay his servant his wages, told his servant he could keep him no longer, not knowing how to pay him the next year. The servant ^answered him that he would serve him for more of his cattle. But how shall I do (saith the master), when all my cattle are gone? The servant replied, you shall then serve me> a?id so you may have your cattle again" y Surely, if a man becomes an employer in industry, only because he is a capitalist, and as he is a capitalist, the servant in this story was not more of a wag than of a political economist.

No, in a state of imperfect competition, the employer is not the laborer's guardian, or the trustee of his earnings. The workman's legitimate wages are a great deal better in his own pocket, or standing in his own name on the books of the savings bank, than paid into the hands of the employer as extra profits. The reasoning to the contrary, on the assumption of a vital harmony of interests, cannot fail to remind one of the economical plea, .with which it is point by point identical, once so widely urged, that the owner's interest would abundantly protect the slave against physical abuse or privation. It is also closely analogous with the political plea by which the privileged classes have always sought to show that it really didn't matter how much political power was entrusted to them; that the interests of rich and poor, high and low were indissolubly bound up together, so that if one suffered, all must suffer with it; and that, therefore, the class most intelligent, most apt for government, having most leisure for public affairs, with, moreover, the largest stake in society, might safely be trusted to make and execute all laws, their own true and permanent interests prohibiting them from any and every course prejudicial to the lower classes, who

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1 History of New England, II. 219-20.

could not, it was urged, be in any way oppressed but that social and industrial disorders would afford immediate retribution for the neglect of duty or abuse of power on the part of their self-constituted guardians.

The argument is a very pretty one, but alas! and alas! what a dreary and sickening tale is that of the exactions and oppressions of the Old Regime! There is no class fit to determine its own rights and prescribe the duties of others. Inevitably will tyranny be engendered, whenever there is weakness or helplessness on the one side. Noblesse oblige; and the sentiments of compassion and charity go far to mitigate the natural severity of legislation and administration; but, after all, there is only one way in which the rights of any body of men can be secured, and that is by being placed in their own keeping.

CHAPTER XIV.

THE EMPLOYING CLASS I THE ENTREPRENEUR FUNCTION": THE PROFITS OF BUSINESS.

We have seen (Chapter I.) that much confusion has been introduced into the theory of wages by the economists carrying the classification which results from their analysis of functions in production over into the distribution of wealth, assuming, it would seem, that industrial functions must needs characterize distinct industrial classes. We have seen that, in fact, the laborer and the capitalist are largely the same person; and that no division of the product into shares, representing the claims of different parties, in such cases takes place. We have now to note a further source of error in the almost universal neglect by the text-book writers to make account of an industrial function which, while, the world over and history through, it characterizes a class no more1 than labor or capital, does yet, in the most highly organized forms of industry, especially in these modern times, characterize a distinct and a most important class. This class comprises the modern employers of labor, men of business, " captains of industry." It is much to be regretted that we have not a single English word which exactly fits the person who performs this office in modern industry. The word "undertaker," the man who undertakes, at one time had very much this extent; but it has long since been so exclusively devoted to funereal uses as to become an impossible term in political economy. The word "adventurer," the man who makes ventures, also had this sense; but in modern parlance it has acquired a wholly sinister meaning. The French word " entrepreneur" has very nearly the desired significance; and it may be that the exigencies of politicoeconomical reasoning will yet lead to its being naturalized among us.

1 Thus the peasant proprietor takes all the responsibilities of production, determines its courses and its methods, and acts, so to speak, as the entrepreneur in respect to his own little affairs, at the same time owning the capital employed and performing all the labor.

This function, then, of the man of business, middleman, undertaker, adventurer, entrepreneur, employer, requires to be carefully discriminated.

The economists, almost without exception, have regarded capital and labor as together sufficient unto production, the capitalist being the employer, the laborer being the employed. It may fairly be presumed that the failure to recognize a third party to production, the middleman, has been due in part to the fact that these writers have been accustomed to take their illustrations of the offices of labor and capital from the savage state, or at least from a very primitive condition of industry. The bow, the spear, the canoe, are the favorite subjects when it is to be shown how it is that the results of labor may pass into the form of capital; how it is that capital may assist current labor; and how it is that a reward can be given to capital out of the product of industry without any wrong being done to the laborer. And it is true that when the forms of production are few and simple, and when the producer and the consumer are either the same person, or are found in close proximity, the possession of capital is the one sufficient qualification for the employment of labor ; and, on the other hand, a supply of food and of tools and materials is all that labor needs to institute production.

But when, in the development of industry, the forms of production become almost infinitely numerous and complicated; when many persons of all degrees of skill and strength must be joined in labor, each in his place contributing to a result which he very imperfectly, if at all, comprehends; when the materials to be used are brought from distant fields, and the products are in turn to be scattered by the agencies of commerce over vast regions, the consumers constituting an ill-defined or an undefined body, personally unknown to the producer or any immediate agent of his ; then a reason for an employer exists which is wTholly in addition to that which exists in a primitive condition of industry. The mere possession of capital no longer constitutes the one qualification for employing labor; and, on the other hand, the laborer no longer looks to the employer to furnish merely food and the materials and tools of the trade; but to furnish also technical skill, commercial, knowledge, and powers of administration; to assume responsibilities and provide against contingencies; to shape and direct production, and to organize and control the industrial machinery. And, moreover, so much more important and difficult are the last specified duties of the employer; so much rarer are the abilities they require, that he who can perform these will find it easy to perform those; if he be the man to conduct business, capital to purchase food, tools, and materials will not, under our modern system of credit, long be wanting to him. On the other hand, without these higher qualifications, the capitalist will employ labor at the risk, or almost the certainty, of total or partial loss. The employer thus rises to be master of the situation. It is no longer true that a man becomes an employer because he is a capitalist. Men command capital because they have the qualifications to profitably employ labor. To these, captains of industry, despots of industry, if one pleases to call them so, capital and labor alike resort for the opportunity to perform their several functions. I do not mean that the employer is not in any case, or to any extent, a capitalist; but that he is

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