>8 Wisconsm Academy of Sciences^ Arts, and Letters. 



DISTEIBUTION OF PEOFITS. 



A NEW AERAISTGEMENT OF THAT SUBJECT. 

 By Prof. A. O. Weight. 



The following is offered as a new arrangement of the suV>ject of 

 distribution of profits, differing in some important particulars from 

 the arrangement given in any work on political economy with 

 which the writer is acquainted. 



In civilized communities nearly all Production requires the 

 union of capital and labor. The proceeds of production are then 

 distributed in various ways between the capitalist and the laborer. 

 In actual practice the capitalist and the laborer may or may not 

 be the same person ; but in theory we may separate the shares of 

 capital and labor. There is still a third party concerned in. pro- 

 duction, the business manager, who stands between the capitalist 

 and the laborer, and by his skill in superintendence increases the 

 proceeds of the business, and thus makes himself a sharer in the 

 proceeds. 



The share which always belongs to the capitalist is called in- 

 terest, when it is paid for the use of money, and rent when it is 

 paid for the use of real estate. The rate of interest and the rate 

 of rent vary according to fixed laws which I need not give here. 

 The share which always belongs to labor is called wages (or in 

 some cases salary). This also vaiies according to well-known 

 laws. After deducting interest or rcLt, as the case may be, and 

 wages, including the salary of the business manager, the net 

 proceeds are the real profits of the business. In some cases in- 

 stead of pr>)fits we should say losses, but this does not change the 

 conditions of the problem. Wboever receives the profits should 

 also bear the losses, and generally does. There are then two ques- 

 tions in regard to every kind of production : first, what are the 

 profits (or losses) ; and second, who gets them. In solving these 



