The substitution of free labor for slavery makes necessary the payment of wages even where there is no surplus, but the mere fact that the wage system is adopted is no indication that laborers are receiving more than the minimum share essential to the continuance of a laboring population. Both rent and interest, however, are an indication of a social surplus. Capital may always be so utilized as to enable society to realize a surplus. The very appearance of capital is proof that labor is more wisely directed and is turning into more efficient channels. Rent arises from the cultivation of land of dif ferent degrees of productiveness. Costs are covered and the minimum shares obtained on the poorest land cultivated and the rent on each better grade measures the differences between the yield of that grade and the poorest land, or the land at the margirf of cultivation. It is purely a surplus owing its existence and amount to the superior productiveness of the better grades of land. The total income of capitalists, landlords, and laborers is thus made up of two parts : one, a minimum share obtained by the physical impossibility of contributing to industry without it, the other, a share in the surplus called respectively surplus wages, interest, and rent.
It might be well if there were a single word to represent that part of a laborer's income which is in excess of his costs, corresponding to the surplus income of capitalists and landlords. But even if there were such a word it might be impossible to make the distinction in practice. Commodities consumed by man serve a double purpose in sustaining his vitality and conferring pleasure. Those which are consumed only for the second purpose often really serve the first as well. The transition from necessary wages to surplus wages is imperceptible. Some laborers might even deny that they ever receive surplus wages from a confusion of necessary wages with fair or just wages. But it is per fectly natural and just that laborers should share in the surplus. It is also generally possible for them to do so.
The law of costs is, then, the first part of the law of distribution. Every class whose coop eration is required in production will receive from the product such a part as will put it in the end in as favorable a position as at the begin ning. Every loss of vitality must be covered, every personal cost made good. We may, in deed, imagine a temporary state of affairs in which costs are not replaced. Through some extraordinary pressure, such as that of war or religion, a community may permit its capital to be sacrificed, its population diminished, and its natural resources squandered in some undertak ing which gratifies ambition without securing the conditions of future production. But such instances are exceptional and aid in proving the rule, for the exhaustion of national strength that would follow would soon make impossible a continuance of these enterprises, and, taking into account the rapidity with which material wealth is used up when not constantly replaced, it seems likely that the law of costs wouldassert itself very quickly.
No person or class of persons is assured of a living or of a minimum share in distribution otherwise than by contributing to the social wealth the value of a living. The law of costs is not a statement that every person who works, regardless of the amount and quality of his work, will receive a share in the product of in dustry. Humanity or self-protection may prompt society to interfere in extreme cases to prevent actual starvation, but in that case it is not a minimum share in distribution that is awarded, it is a gratuitous share of the surplus. What is assured by the law of costs is that each class will receive in return for its participation in the work of society, provided its assistance is effec tive and rightly directed, at least as much as the effort has cost. It will probably receive more, but certainly, as a rule and in the long run, not less. If there is only enough for each necessary class of producers to receive so much, none will receive more than this minimum share, and there is no surplus to divide.
Generally, however, the sum of the minimum shares does not equal the total product. There is then a competition among different classes for this free portion. Various theories have been put forward to account for its disposition, each theory suggested by the manner in which the disposition of the surplus is made, or is supposed to be made, at the time when the theory is formu lated. The mercantilists, whose ideas of national policy controlled Europe in the seventeenth and eighteenth centuries, looked upon the struggle for the surplus as taking place between com munities rather than between individuals. They concentrated their energies in each country upon the creation of a favorable set of political, social, and economic conditions for the trade and indus try of their own people, striving to secure the largest possible share in every division of land or treasure which fortune opened to them in distant regions of the earth, and exacting heavy tolls for every commercial privilege granted their neighbors. In particular they took strong meas ures against the exportation of gold and silver even in exchange for goods, believing that a loss of money was an evil of greater moment than almost any other against which it was necessary to guard. By such means they attempted to secure for their own nation the full share in the surplus wealth to which their strength and ingenuity entitled them. Within the community the amount received by each class had long been regulated chiefly by custom. Each class was allowed by the community to live in a manner which corresponded with its established position. If the general income increased this became improved, but it remained fixed in its relation to the position of other classes.