The inequalities in the distribution of wealth or prosperity among the various industrial groups which work in succession upon the same material is likewise easily explained. The wheat-growing group, for example, gets its re ward in the form of the price of wheat. The flour manufacturing group gets its reward in the form of the difference between the price of wheat and that of flour and its by-products; and the baking group gets its reward in the difference between the price of flour and that of bread.
If there should be so many wheat farmers and so few millers as to produce a bad balance, then each individual farmer would cease to be indispensable. He could stop growing wheat, and there would still be as much wheat as the millers could grind. Each mill would, however, become at the same time practically indispen sable. If it should close down, it would seri ously curtail the supply of flour on the one hand and reduce the market for the farmer's wheat on the other. Under such circumstances the reward of the milling group, that is, the difference between the price of wheat and that of flour and its products would be large. In short, the milling group would be prosperous because a large share of the total price of bread would go to it and a small share to the farming group. Vice-versa if there were so few wheat farmers as to provide an insufficient supply to keep the existing mills busy, the distribution of prosperity would be reversed. Whether it be wheat, hides, iron or any other product which passes from one industrial group to another, the question of the distribution of prosperity among the various groups would be the same.
The great social problems of the present, however, relate to the distribution of wealth or prosperity among the various members or classes in the industrial group. How much of the price of wheat, for example, should go to the landowner as rent, to the farmer as profits, to the capitalist as interest and to the farm laborer as wages? Again, how much of the total reward of the milling group should go to the owner of the site as rent, to the owner of the equipment as interest, to the business head as profits and to the various classes of laborers as wages? This is the problem of occupational distribution. The growth of large industries, with greatly increased numbers of interests to be conserved in each industrial group, has given to this problem its complexity. The vast differ ences in the prosperity of the different classes who participate in the work of the same indus trial group has made this the most acute of all economic problems.
The principles which determine the relative prosperity of different classes within the in dustrial group are practically the same as those which determine the relative prosperity of ter ritorial and of industrial groups. If, for ex
ample, two kinds of skill are required in the manufacture of a given product, and one kind of skill is so abundant and the other so scarce as to produce a bad balance, no individual pos sessing the kind of skill which is oversupplied can claim to be indispensable. The mill or fac tory can produce approximately as much with out him as with him. Since he can he spared without great loss, he must work, if he works at all, at low wages. Each individual, however, who possesses the kind of skill which is scarce may be said to be practically indispensable. It will make a considerable difference in the out put of the whole establishment whether he works or not. He cannot well be spared and he can therefore dictate good terms for him self. In short he will be well paid.
Unskilled labor is generally oversupplied in proportion to skilled labor, and managerial tal ent is generally the scarcest form of skill. Thus it happens that no individual unskilled worker is in any sense indispensable. There are so many others available that any one can be easily spared. So long as this condition exists, un skilled laborers will never be able to command a large share of the value produced by the group of which they are a part. For the same reason, so long as the same conditions prevail, the more nearly indispensable the individual becomes, the larger the share of that value he will be able to command.
Various kinds of skill, however, are not the only factors of production. Adequate supplies of capital are equally necessary, and in some cases, suitable land, favorably located, is also indispensable. Whether it be land, capital or skill, the more nearly indispensable the factor is, the more it will command of the total prod uct of the establishment.
This being the case, the obvious cure for the inequalities in the distribution of prosperity is a balancing up of the factors of production, so that no factor and no kind of skill is either oversupplied or undersupplied relatively to all others. With an abundance of available sites, no landowner could command an inordi nate rent for his land. With an abundance of capital, no capitalist could command inordi nate returns for his capital. With an abundance of managerial skill, no executive or business manager could command an inordinate income either in the form of profits or . salary. At the same time, if unskilled labor were scarce and hard to find, so that each one could be considered as practically indispensable, no laborer would be compelled to work for low wages.
In addition to a program for the balancing up of our industrial system, we must, of course, eliminate all injustices, such as monopolies and other methods of creating artificial scarcity. See EcoNostics.