DISTRIBUTION. In economics, the manner in which the income of a community, won by its own production or gained in fruitful exchanges with other communities, is divided up among its members. The national output, or aggregate of services and material goods produced by the capital and labour of a nation, is a continuous stream, which is always flowing, and which is divided up among the agents of production in certain shares. The lenders of physical goods take rent; the lenders of capital take interest ; management takes profit ; labour takes wages or salaries. The national and local governments levy taxes upon all these for the expenses of government, and in so doing change to some extent, large or small, the nature of the distribution, among private claimants, as when the taxation of the well-to-do is used to pay an old-age pension.
The manner of the distribution of the national dividend is de termined by the law of supply and demand. Each contributor to the national product brings to market his goods or his services, his property, or his labour, for sale or hire. If he owns physical property he offers it for hire and obtains whatever rent the condition of the property market affords. If he possesses money, he may lend it at the highest rate of interest he can get at the risk he is willing to hazard. If he is a captain of industry, he sells his managing power, and if he is a man of consummate ability he can obtain a high price for his services, for the supply of such men is always relatively small. If he is a workman, he brings his skill and strength to market, bargaining either individually or collectively for the best reward he can get. In each of these matters, the law of supply and demand operates, modified by powers of monopoly or quasi-monopoly.
The subject of distribution is thus of paramount interest, and its consideration has engaged the close attention of economists of all schools, of political parties, of statesmen framing industrial and social legislation, and of finance ministers levying taxation. In these pages, the economic issue is discerned under ECONOMICS, CAPITAL, MONOPOLY and INHERITANCE ; socialistic views under COLLECTIVISM, SOCIALISM, GUILD SOCIALISM and ANARCHISM ; the practical industrial issues under INDUSTRIAL RELATIONS,