Chapter VII The Correlation and Co-ordination of These Laws

The conclusions we have reached as to the laws which govern the distribution of wealth recast a large and most important part of the science of political economy, as at present taught, overthrowing some of its most highly elaborated theories and shedding a new light on some of its most important problems. Yet, in doing this, no disputable ground has been occupied; not a single fundamental principle advanced that is not already recognized.

The conclusions we have reached about the laws that govern the distribution of wealth recast a large and important part of economics as it is now taught. They overthrow some of its most elaborate theories and shed new light on some of its most important problems. Yet in doing this we have taken no disputable ground. We have not advanced a single fundamental principle that is not already recognized.

The law of interest and the law of wages which we have substituted for those now taught are necessary deductions from the great law which alone makes any science of political economy possible—the all-compelling law that is as inseparable from the human mind as attraction is inseparable from matter, and without which it would be impossible to previse or calculate upon any human action, the most trivial or the most important. This fundamental law, that men seek to gratify their desires with the least exertion, becomes, when viewed in its relation to one of the factors of production, the law of rent; in relation to another, the law of interest; and in relation to a third, the law of wages. And in accepting the law of rent, which, since the time of Ricardo, has been accepted by every economist of standing, and which, like a geometrical axiom, has but to be understood to compel assent, the law of interest and law of wages, as I have stated them, are inferentially accepted, as its necessary sequences. In fact, it is only relatively that they can be called sequences, as in the recognition of the law of rent they too must be recognized. For on218 what depends the recognition of the law of rent? Evidently upon the recognition of the fact that the effect of competition is to prevent the return to labor and capital being anywhere greater than upon the poorest land in use. It is in seeing this that we see that the owner of land will be able to claim as rent all of its produce which exceeds what would be yielded to an equal application of labor and capital on the poorest land in use.

The law of interest and the law of wages that we have put in place of those now taught are necessary deductions from the great law that alone makes any science of economics possible. This all-compelling law is as inseparable from the human mind as attraction is from matter. Without it we could not foresee or calculate any human action, the most trivial or the most important. It says that men seek to satisfy their desires with the least exertion. In relation to one factor of production it becomes the law of rent, in relation to another the law of interest, and in relation to a third the law of wages. Every economist of standing has accepted the law of rent since Ricardo's time, and like a geometrical axiom it needs only to be understood to compel assent. In accepting it, we accept by inference the law of interest and the law of wages as I have stated them, as its necessary consequences. In fact they can be called consequences only in a relative sense, since recognizing the law of rent already means recognizing them. For on218 what does recognition of the law of rent depend? Plainly on recognizing that the effect of competition is to keep the return to labor and capital from being greater anywhere than on the poorest land in use. Seeing this, we see that the owner of land can claim as rent all of its produce above what an equal application of labor and capital would yield on the poorest land in use.

The harmony and correlation of the laws of distribution as we have now apprehended them are in striking contrast with the want of harmony which characterizes these laws as presented by the current political economy. Let us state them side by side:

The laws of distribution as we now understand them are harmonious and correlated. That contrasts sharply with the lack of harmony in the way current economics presents them. Let us state them side by side:

In the current statement the laws of distribution have no common center, no mutual relation; they are not the correlating divisions of a whole, but measures of different qualities. In the statement we have given, they spring from one point, support and supplement each other, and form the correlating divisions of a complete whole.

In the current statement, the laws of distribution have no common center and no mutual relation. They are not the related divisions of a whole, but measures of different qualities. In the statement we have given, they spring from one point, support and complete each other, and form the related divisions of a complete whole.