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And this is a rule which works both ways. In a community where land is extensively cultivated, it is presumably because extensive cultivation produces the best results from the standpoint of the landowner. Any one of the following conditions may induce him to change to intensive cultivation : (1) a fall in the price of labor; (2) a fall in the price of the products of extensive cultivation; (3) a rise in the price of the products of intensive cultivation. There lies the opportunity for the protectionist. By some discrimination which will tend to increase the profitableness of the intensive product, or decrease, relatively at least, the profitableness of the extensive product, an absolutely larger and more valuable product might be created. This would support a larger number of people, or support them better. They would have a larger number of products either for consumption or for international trade. Labor and capital would have been attracted from the less productive to the more productive industry. Since a protective tariff is one means by which the relative profitableness of different industries may be changed, it follows that a protective tariff may be a means of increasing the total product of the industry of the community.

PART FOUR

THE DISTRIBUTION OF WEALTH

Which has to do with the shares into which the products of industry are divided and the awarding of these shares to different groups and classes

CHAPTER XXX

THE LAW OF VARIABLE PROPORTIONS

The problem of the distribution of wealth is the problem of dividing the products of the industry of the community among the various classes. The claim of each class to a share of the wealth is usually based upon the claim that each has contributed something to its production. The contribution may be labor, either mental or physical; it may be capital, or the results of foresight or investing; or it may be land which the owner has appropriated or otherwise come into possession of.

The market value of services. The market value of what each has to offer determines his share in the product.) If the market value of labor is high, the laborer gets a large share; if it is low, he gets a small share. The same is true of that which each has to offer. Our first problem must be, therefore, to study the market value of each factor, or agent, of production in order to find out why the seller of each factor gets a large, or a small, share.

The income of each class, however, is a flow rather than a fund or a lump sum. The laborer sells not himself but the flow of productive energy which he can exert during a given period of time. The capitalist sells not his capital but the flow of utilities which come from his capital during a given period of time. If the laborer were a slave, he might be sold bodily, and in that case he would bring a price. The capitalist and the landlord may sell their capital or their land. This involves a question of exchange and market price. When they sell the flow of utilities which their properties yield, we have interest and rent, which are questions of distribution. The following outline will indicate the relation of these various problems to

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