36 PROCEEDINGS OK THK CANADIAN INSTITUTE. 



capital, (3) enterprise, and (4) labor, the correspondino- shares of the 

 product being (1) rent, (2) interest, (3) profit, and (4) wages. • These 

 four agencies are differentiated from each other only in highly organ- 

 ized conditions of industry. The order in which the shares of the' 

 product are determined is the one just given, but the order in which 

 they histoiically emerge is precisely the reverse. Mr. Geoi-ge's 

 account of the matter is defective because he leaves out the agency of 

 the entrepreyieur and his corresponding pi'ofit. Other expounders of 

 economic science do the same, but sometimes with less fatal effect on 

 their systems. Mill identifies the entre2)reneur with the capitalist 

 and makes his " profit " part of the " profits " of capital under the 

 designation of " wages of superintendence." Prof. Laughlin, the 

 Amei'ican editor of Mill identifies the entre2yreneur with the labourer 

 and his profit with wages. If the above account of the economic con- 

 ditions of modern society be connect it is evident that Henry George's 

 account is defective, ai:d that much of his reasoning about rent, wages, 

 and capital must be obscure, as indeed it is. Of his destructive criti- 

 cism of the "wage-fund" theory it must be said: (1) That no one 

 now holds it, if any one ever did, in the form which he criticizes ; (2) 

 that the '• unearned increment " princi}>le does not in any way depend 

 on the wage-fund theory either in the form criticised by George or in 

 any other form ; (3) that the wage-fund theory, though nonsensical 

 in the form he criticizes, is in a sense — and that a very important one 

 — true; and (4) that the amount of truth in the wage-fund theory 

 and the amount of truth in George's refutation of it depend entirely 

 on the definitions given of " capital " and " labor." Even Mr. George 

 expressly admits that capital may " limit the form of industry and 

 the productiveness of industry, by limiting the use of tools and the 

 division of labor," and this is eqiiivalent to an admission of the 

 existence of a wage-fund in Mill's sense of that term. F. A . Walker 

 expressly defines " capital " as including " materials,^' " tools," and 

 " subsistence." Capital accumulated and seeking investment often 

 affects the rate of wages apart altogether from the productiveness of 

 the labour it employs. Moreover, as Walker puts it, capital deter- 

 mines loJien wages will be paid, even if the product of the labour 

 determines the amount of the wages. 



More important in relation to the " unearned increment " principle 

 is George's destructive criticism of the Malthusian law of population. 



