No. 8, we get 72 bushels; that is, on Plot No. 6 one dose of nitrogen with one dose of land-plus-other-factors yields 24 bushels according to our tables. Three doses of 43 pounds of nitrogen added to three doses of land-plus-other-factors should give us three times as much, which makes 72 bushels.

Since three doses of nitrogen with one dose of land-plusother-factors yields 72, it follows that the adding of two doses of land-plus-other-factors added 35 bushels.

A larger number of experiments of the same kind needed. We have not plots enough to carry this analysis much farther, but it is probably clear enough by this time that wherever, by varying the ratios in which different factors are mixed in any productive combination, we get varying results, any economist who is not willing to consider the relation of the variation in the factors to the variation in the product is not much of an economist. It must also be apparent by this time that the relation between the variation in the quantity of any factor in the combination and the variation in the product must have a great deal to do with determining the value of the factor.

This method gives the key to all correct valuation. Earlier in the chapter the term marginal productivity was applied to the variation in the product which followed a minute variation in the quantity of any factor in the combination. In each of the Tables I, II, III the figures in the third column would be called the marginal product of nitrogen. Objection has occasionally been raised to the use of the word product in this sense. It is contended that even these increments of product are not in any sense the exclusive product of the 43 pounds of nitrogen which were added in order to get that increment, — that 43 pounds of nitrogen, alone and unrelated to the other factors, would not produce even the small increments of wheat indicated in the third columns. No one, of course, claims that they would or could. It is not worth while to discuss this or that possible meaning of the word product or productivity. The essential thing to consider is, How much could a farmer

afford to pay for a given quantity of nitrogen to be used in a given combination? It is obvious that this must depend on the way it would affect the crop. How much more wheat could he grow by using more nitrogen, or how much less would he grow by using less? There is no question more practical than that. It is, moreover, a question which must be raised with respect to each and every factor in that combination of factors called a farm, or in any other business establishment. It is in the answers to such questions that we must find the key to any clear understanding of the problem of the distribution of wealth, which is, as pointed out in the beginning of this chapter, the problem of the valuation of the factors of production.

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CHAPTER XXXI

THE GENERAL NATURE OF THE WAGE QUESTION

How intensely is a man's labor desired? The price of labor, like the price of commodities, depends upon how much it is desired in comparison with other things. ) It is important in discussing wages, as in discussing the price of commodities, that we remember that it is not labor in general, but specific units of labor, which are purchased. The question is not how intense is the need or desire for labor in general, nor how great would be the loss if all labor were wiped out of existence. The question is how intense is the need for a given number of units of a given kind of labor, or how great would be the loss if that given number of units were subtracted from the total supply. In the case of labor, as in the case of commodities, the practical, everyday question, on the part of the prospective purchaser, is, How much do I need this particular article or the labor of this particular man? How much better off shall I be with the advantage of his help than without it?

The need for more labor, rather than the absolute need for labor. It may be true that if there were no labor of a given class, say that of ditch diggers, the community would suffer terribly. Nevertheless, there may be so many ditch diggers that the addition of one to the total number would add very little to, and the subtraction of one would subtract very little from, the well-being of the community. When this is the case, the labor of any one of the total number will not be very much desired. Would-be employers will be somewhat indifferent to his offers to help and to his threats to stop working or to emigrate. The indispensable man, like the indispensable commodity,

commands the high price. The man who can be easily spared, like the superfluous commodity, brings the low price.

This may be called the functional theory of wages, and it forms a part of the functional theory of value which was outlined in a previous chapter. The function of a high price, in the economy of the nation, is to call into existence a larger supply of the thing for which it. is offered. The function of a low price is to discourage the production and reduce the supply of the thing for which it is offered. If a larger supply is desired or needed, a high price is the means of getting it. If a larger supply is not desired or needed, a low price is the means of checking, limiting, or reducing the supply. Find out, in any given case, how much better off a community would be, or thinks it would be, if it had more of a given thing than it now has, and you have a fair measure of the reward which it could afford, or thinks it could afford, to pay in order to get more.

Stated negatively, find out how much worse off the community would be, or thinks it would be, if it were to lose a unit or a few units of its existing supply of a given thing, and you have a measure of what it could afford, or thinks it could afford, to pay rather than to incur that loss. If it thinks it would make a great difference one way or the other, a high price will be offered. If it thinks it would make very little difference, a low price will be offered. This applies to the price of labor as well as to the price of commodities, and for the same reason.

In the case of labor, as in the case of commodities, the community may be sadly mistaken. It may fail to appreciate real merit, and it may greatly overrate certain qualities in either case. There is no going behind the returns in a verdict of this kind any more than in a popular election.

Again, there may be members of the community who desire intensely to possess a certain commodity, or to hire a certain kind of labor, but who have not the wherewithal to purchase or

hire it. They will therefore have little influence on the price or the wages. This impecunious condition may be due to the fact that others have no great desire for the labor or the products of the persons in question. In that case the community does not value their services very highly, and therefore their desires have little influence on the market for other things or other services.

Productive labor is wanted because of its product. Our next task is to find out what determines how much the labor of any particular man or group of men is wanted. In the simplest possible case, that of a laborer who, without any help from anybody else, produces a complete article, his labor is needed just as much as, and no more than, the article itself is needed. The price of the article, then, is his reward. If he is not satisfied with his income, he must find fault with the price which the consumer pays for the product, for he gets the whole price. This, however, is a case so simple as to be very exceptional. Very few finished products are produced by the labor of a single person. One who goes out into the woods and gathers nuts or berries, carries them in vessels which he has himself improvised, and sells them directly to consumers may come under this class. The woodsman who goes into the primeval forest and chops wood will at least have an ax; this ax is likely to have been made by somebody else. He will probably also need a team, which may have been grown or produced by somebody else. While it is not strictly true that in a case of this kind the finished product, firewood, is produced by the labor of one man, still the problem in distribution is fairly simple. If the woodman has paid a fair price for his ax, the question of distribution as between him and the axmaker is settled and does not need to bother us any more. If he likewise pays a fair price for his team and wagon, the problem of distribution as between himself and the horse breeder and wagon maker is also settled and need not bother us again. Since he has paid for his tools, the total value of