16 
TRANSACTIONS OF THE TEXAS ACADEMY OF SCIENCE. 
PROFITS GOVERNED BY NATURAL LAW. 
Capital (i. e., fixed capital as distinct from the circulating form) is an 
agency for increasing the efficiency of labor. We may liken labor to the 
electric current, which does the work, and may liken capital to the 
electro-motive force or voltage, which multiplies the efficiency of the 
current. It is the interest of the community that labor shall work at 
its highest potential or greatest efficiency, and turn out from the hands 
of each laborer the maximum amount of product. There are many lines 
of industry in which very large amounts of capital are indispensable to 
their successful operation, and whose productiveness and profit continue 
to increase with the enlargements and concentration of capital until a 
maximum is reached. It is the interest alike of the community and of 
the capitalist that they should do §o. The community receives a larger 
amount of goods and a more abundant return for its struggle for ex- 
istence, while the capitalist receives a large aggregate profit. 
Nor will the economist worry about the magnitude or rate of the 
profit so long as it is honest, and attended with the giving of a full 
equivalent of benefits to the commumnity in conformity with the free 
and untrammeled action of the law of demand and supply. For it then 
becomes a gain which the community does not lose, hut on the contrary, 
it is a gainer also, and in much greater degree than the capitalist. 
Under these conditions it is safest and best to leave profits to take 
care of themselves, for they are goverend by a natural law whose action 
is not only beneficent, hut irresistible. In the final division of the pro- 
duct of labor and capital, an increasing share goes to wages, and a de- 
creasing one to profits. New industries may arise, new conditions may 
develop, and new and improved methods of production or of manage- 
ment may he invented which at first may lead to very large profits. But 
with the free action of the law of demand and supply, with its attend- 
ant condition of fair and just compensation, they also obey the pres- 
sure of the law that the rate of profit tends to a minimum. 
GREED AND ITS CONSEQUENCES. 
But here the trouble and anxiety of the economist begin. I have stated 
that political economy in its primary analysis takes no account of morals 
and ethics, hut accepts them as it finds them. But there is an implied as- 
sumption that men are generally honest and just in their dealings with 
each other; that they execute their contracts and trusts with fidelity 
and exactitude. As a general rule, this is true. But it too often has 
occasion to lament that it is not. During the last forty years there have 
