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portions which capital and labor bear to each other. When capital is abundant, there is usually a demand for labor, and then the price of labor rises. When, from any cause, the number of laborers in any community has been diminished, while the capital remains the same, capitalists will overbid each other for workmen, and the price of wages will be raised. But if the capital should be diminished, and the number of laborers continue the same; or if the population of a country should increase more rapidly than its capital, the price of labor would gradually fall, unless kept up by some special counteracting cause.

§ 950. A man who invests a capital of ten thousand dollars in any business, must necessarily employ a greater number of laborers than one who has but half that amount invested in the same business; and he is capable of rendering a greater benefit to the community, by furnishing the means of support to a greater number of persons. Therefore, the greater the amount of capital there is in a country, the more labor will be required.

§ 951. Hence we find, that a country increases in popu. lation, in proportion as it increases in wealth. Where capital is abundant, the means of living are easily obtained; and where the comforts of life are abundantly enjoyed, a greater number of children will be reared, as observation infallibly proves; and a greater number of laborers also will emigrate to such a place from other countries, where the price of labor is lower, and the means of living are less casily acquired. And if the supply of labor thus furnished increase more rapidly than the capital of the country, the price of labor will gradually be reduced.

§ 952. Wages are affected by the danger, fatigue, or disagreeableness of the labor to be performed. If the performance of any kind of labor be easy and pleasant, many will desire to engage in it; and wages in this employment will be low. On the other hand, if labor in any business be performed with difficulty, or if it be in its nature un

diminution of capital? § 950. Why is a rich man capable of render. ing a greater benefit to community than a poor man? § 951. What effect has the increase or the abundance of capital upon the population of a country? § 952. What effect has the disagreeableness of any

pleasant and disagreeable, a supply of labor will not be ob. tained without the offer of higher wages.

§ 953. The regularity or irregularity of the occupation of the laborer also affects the price of labor. If a man's trade does not give him constant employment, he must re. ceive more for an hour's labor, than he whose occupation demands incessant labor. Thus a trader, who performs but one or two operations during the day, though but an hour's time may be occupied in their performance, must receive a profit at least equal to the interest on his capital for a whole day, and the ordinary price of labor for the same time. A physician or a lawyer charges for attending to a single call, as much as is charged for a day's labor in other occupations; because his services may not be again wanted during the day.

§ 954. Wages are generally in proportion to the skill of the laborer. The highest degree of skill, whether acquired by a long course of practice, or whether it is the result of a peculiar aptitude for a particular kind of business, is possessed by a small proportion of laborers. And those who possess this skill, will be enabled to obtain higher wages than are paid for ordinary labor.

§ 955. So also persons to whom responsible trusts are committed, command higher wages than others. The business of a master-agent, for example, often requires extraordinary qualifications. To secure the confidence of his employer, he must possess moral character, prudence, and what is commonly termed, a "natural talent" for business. as few persons singly possess all these qualifications, these few will ask for their labor a higher price than is paid for labor which can be performed by a greater portion of laborers.

And

§ 956. The price of labor is often determined by the degree of profit which a particular kind of business affords. When any business becomes profitable, more capital will be

kind of laber upon the wages of labor? § 953. Show by example the effect of the inconstancy of an occupation upon the price of labor. 954. Why does a skilful laborer receive higher wages than an unskilful one? 955. Why do persons of good character and of good abilities, command higher wages than those of the opposite character? § 956. Why does the profitableness of any business raise the price of

invested in it, and the price of labor employed in it will rise. Competition, however, among the capitalists, will soon reduce the profits of their business, and labor in that employment will, after a little time, be no better paid than in

others.

§ 957. Labor is of two kinds : simple labor and educated labor. Simple labor is that which may be performed by any person of sufficient strength, without any considerable previous education or training. The price of simple labor is governed by several circumstances. A laborer must be able, from his earnings, to supply himself with the necessaries of life. For less than this, it is not expected that any one would be willing to labor.

§ 958. But this is not all. The wages of a laborer should be sufficient to enable him, besides supplying his own wants, to support his family, and such other persons as are dependent on his labor for the means of subsistence; and also to lay up something to support him, when, from sickness or old age, he shall have become unable to labor; else he must, in that event, either starve, or he must be supported either by individual or by public charity.

§ 959. In a warm climate, less fuel and clothing are required than in a cold one. A person can therefore support himself with lower wages in the former than in the latter, other things being equal. The less the expense of living, the lower will naturally be the price of labor; for where there is competition in labor, its tendency always is to reduce the price of labor to the lowest point at which it can procure the conveniences of life.

§ 960. By educated labor is meant that labor which requires considerable previous preparation or training in order to accomplish it. A tailor, or blacksmith, receives higher wages than an ordinary laborer by the day or month. Hav. ing served several years as an apprentice to the trade at which he labors, he is entitled to compensation for the time

labor? By what means are wages again reduced? § 957. What is simple labor? What is the least compensation which any laborer ought to receive? § 958. What more is it proper that he should · ceive? 959. How does living in warm climates affect the labor? 960. What is educated labor? Why should it b

spent in acquiring the skill necessary to the due perform ance of the labor.

§ 961. Such is the labor of lawyers, physicians, and cler gymen, whose wages are such as to compensate them for the expenditure of money, as well as time, in acquiring the qualifications indispensable to their several callings. If labor of this description did not receive an adequate reward, persons would be little disposed to qualify themselves for the learned professions.

CHAPTER XX.

Interest, or the Price paid for the Use of Capital.—Rent of Land.

§ 962. WE are next to speak of the profits of capital. If a man lends his capital to another, he is entitled to some. thing for the use of it; because, first, had he not loaned it, he might have united his own labor with it, and thus have derived from it a profit greater than would have accrued from his own simple labor, disconnected from capital; secondly, because the borrower, having expended neither time nor previous labor in acquiring the capital, can afford, and ought to pay, something for the use of that which has cost another a great amount of labor, and which renders his own industry more productive.

§ 963. In all cases, therefore, the owner of capital employed in production, is entitled to a share of the profits arising from its employment. If he has used it himself, he of course receives the whole profit of the capital and industry united; but if the labor of another person has been exerted upon it, the profits are divided among the capitalists and laborers.

rewarded? § 961. What kind of labor is that of lawyers, physicians, and clergymen ?

§ 962. Why is a man entitled to a compensation for the loan of capital? § 963. In what cases does he receive the whole profits of his

§ 964. The division of the profits of capital and laoor, varies according to the nature of the agreement between the parties. A coach-manufacturer, for example, possesses all the capital necessary for the prosecution of his business; but he employs other persons to perform the labor. In this case the capitalist assumes all the risk, and pays to the laborers stipulated wages, retaining to himself all that remains of the profits of the business.

§ 965. But the owner of the capital may choose to loan his shop and tools to the laborers, the latter taking the risk of the business. In this case, and in similar instances, in which the risk devolves upon the borrower, a specific sum is generally paid to the capitalist, and the remainder of the profits is taken by those who perform the labor.

§ 966. There are other conditions still, on which capital and industry are united, and which require a different distribution of the profits. One individual may furnish the capital, and another the labor and skill, each assuming a portion of the risk attending the enterprise. The union thus formed is called a copartnership; and the profits of the business are usually shared by the parties, either equally, or in such other proportions as have been previously agreed on. Or, each may furnish a portion of both the capital and labor, and share in the risks and profits of the business.

§ 967. The rate of interest is varied by circumstances. If, with the labor bestowed upon capital, it should yield a revenue no greater than the same labor would produce without capital, the borrower could afford to pay no interest for the use of it. If it should produce a revenue equal to double the cost of the labor bestowed, he could afford to pay for the use of the capital a price nearly equal to one half of the value produced. We say nearly equal; for it should be remembered, that every kind of business in which capital is employed, is attended with some degree of risk; and the borrower, if he be an economist, will calculate for

capital? 964, 965. Illustrate, by an example, how the distribution of profits is varied by the agreement between parties. § 966. How are partnerships usually formed? By what rule are the profits of partnerships divided?967. Why ought not a person to pay as in terest for the use of capital, all it produces over and above the bare

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