Profits the Reward of Management 1

production, opportunities and seeking

Page: 1 2 3 4 5 6 7 8

14. Tendency toward equal rate of profits.—In a farming community the new and better methods of the best farmers are taken up gradually by the other farm ers in the district. What was one man's advantage thus comes to be common to all. In manufacturing much the same thing occurs. Better equipment is gradually acquired by all, and as patents expire and methods become known there is a general leveling of the oPportunities in the business. The extra profits of a few individuals begin to disappear be cause they have no control over the Other factors of production, like those of wages, interests and ma terials. Lowered selling prices also add to the prob lem, and in consequence there is difficulty in adjusting prices to the cost of production.

Temporary monopolies interfere with this process, but in the main the lowering of profits to a minimum goes steadily on. There is, for example, the compe tition of enterprisers for the same market, which re sults in reducing their gains to little more than wages of management. As the business becomes better

known, the risk is lessened and the process of routine is enlarged. The possibility of large profits has again and again drawn capital into the field of enterprise, and with it has 'come labor, seeking opportunities for employment.

Such conditions do not last long, since other capi tal seeking advantages also enters the field. The movement is toward an equal rate of profits in differ ent fields and this tendency is emphasized by the growth of capital, which calls for more enterprisers and which emboldens many, seeking a share in the profits, to enter fields of production already occupied.

Just what the limits are to such a movement it is difficult to state, but as a nation grows older and the ordinary primary types of production are materially supplemented by many different kinds of business, the careful observer can perceive the passing of the opportunities for unusual profits and the tendency toward a fairly equal rate of profit.

Page: 1 2 3 4 5 6 7 8