to land as to capital and labour; secondly, marginal or minimum payments to the owners of the least efficient of the several factors in employment; finally, differential payments due to the owners of super-marginal factors.
This analysis conducted so far appears to assume the necessity and even the equity of the current economic system (save for the element of land rents). The owners of capital and labour who take super-marginal payments may be held to get them in virtue of the higher personal effort and efficiency in putting their “‘savings,’’ brains, and labour-power to the best uses. Thus we get a justification of the competitive laisser-faire economy.
But further reflection showed me that two false assumptions underlay this view, one that all units of production were infinitely divisible in quantity, and, secondly, that they enjoyed equal opportunities for entering any market for their employment.
The failure to fulfil those two conditions is, however, manifest. Units of capital and of labour are not infinitely divisible. In any given manufacturing business the minimum unit of real capital may be the whole plant of a mill, or, at any rate, one expensive machine: the unit of labour is for most purposes the week’s employment of a worker’s time. Nor can new savings flow freely into all sorts of investment, distributing themselves accurately in accordance with their most productive use. Most remunerative uses are safe-
