DISTRIBUTION OF AGRICULTURAL INCOME 321 



them such an offer with a good prospect of being able to carry 

 out his contract. In that case the farmer will, in the long run, 

 ha\e an income of $50 a year in addition to the earnings of his 

 own labor of management, or of his own land and capital. 



If, in addition, he is able to develop special skill in prognosti- 

 cating the conditions of the market so as to reduce slightly the 

 losses, thereby increasing the annual product to $1010 a year, 

 he will have an average income of $60. Then if he also succeeds 

 in outbargaining some of those from whom he hires the factors 

 of production, he will find his income still further increased. In 

 addition to all these methods he may, as already pointed out, so 

 organize and manage the factors as to make them turn out a 

 larger product than they otherwise would, in which case he will 

 secure a still larger income. But the amount which he earns in 

 this way really belongs under the wages of superintendence 

 rather than under profits. It is earned by the productive labor 

 of the farmer, and by a kind of labor which can be, and fre- 

 quently is, hired at a stipulated salary. When it is so hired, its 

 earnings clearly belong under wages rather than profits, and 

 there is no good reason for placing it under a different head 

 when it happens to be earned by the farmer himself. But the 

 function of risk taking cannot be turned over to an employee 

 working for a salary. It is essentially the function of the farmer 

 himself, and he cannot shift it to any one but another independ- 

 ent farmer. The farmer is essentially an enterpriser, or an en- 

 trepreneur, as he is sometimes technically called. 1 It is the 

 reward of this special function which, together with the results 

 of superior bargaining, constitutes the peculiar income of the 

 independent farmer, such an income as is never earned by 

 any one in agriculture except a farmer who undertakes risks. 



1 Cf. the article by F. B. Hawley, on " Enterprise and Profit," in the Quar- 

 terly Journal of Economics, November, 1900. Also Mr. Hawley's book on the 

 same subject. 



