desires of consumers. Conspicuous warning is given to parties in the position of our black men not
to attempt to benefit themselves by a considerable reduction in their supply of service; for, though
they might possibly obtain a larger proportion, they would probably obtain a smaller portion, of the
average product. The laws which have been stated and other general laws of Exchange are equally
true in more complicated cases of Distribution.
So far, we have supposed only a single factor—the service of the black man, or, more
generally, the factor β—offered by the competitors, say, B1, B2, etc., in exchange for some of the
produce a offered by the competitors, say, A1, A2, etc. Let us now introduce other kinds of factors,
γ, δ, etc. And let us no longer suppose payment to be made by parties of the type A, in the kind of
commodity which is produced, namely, a. A more concrete conception is that, besides the group A,
B, C, D, there is another and another group,—A’, B,, C’, D,; A'', B”, C’, D,;— where each capital
letter typifies a set of competing individuals. It may be supposed that each A purchases out of the
finished product that he turns out—namely, a—portions of the products a’, a’, etc., which he
distributes according to the law of supply and demand among parties of the type B, C, D. In fine,
each A may pay for the factors of production altogether in some one product, a”’,— “ numéraire, ”
as happily conceived by M. Walras, or, less generally, money,—which the purveyors of the factors
can exchange for the articles which they want. These articles need not be all commodities ready for
consumption: some of the parties may care to purchase factors of production wherewith to play the
role which has been assigned to A.
Having now obtained a general idea of the machinery by which distribution in a regime of
competition is effected, let us go on to consider in more detail the parts of the mechanism. And, first,
of the party that takes factors of production in exchange for products or the means of purchasing the
same, the party above represented by the white man and labelled A. The functions of this party may
be investigated by an ancient method which Sidgwick has proposed to rehabilitate3 for the purposes
of modern economics,—the search for a definition. What is an entrepreneur? Amid the diversified
combinations of attributes which the industrial world presents—innumerable as the varieties in
which vegetable nature riots—we ought to fix certain characters agreeably to the rule laid down by
Mill under the head of Definition by Type. “Our conception of the class” should be “the image in
our minds which is that of a specimen complete in all the characteristics.”4 Four such type-
specimens may be distinguished, ranged in a descending order according to the extent of functions
ascribed to the entrepreneur. There is, first, the party whom the classical writers designate as the
Capitalist, “who from funds in his possession pays the wages of the labourers, or supports them
during the work; who supplies the requisite buildings, materials, and tools, or machinery; and to
whom, by the usual terms of the contract, the produce belongs to be disposed of at his pleasure.”5
This party will here be considered as devoting his care and savings to a single business. There is,
second, the entrepreneur as portrayed by the late President Walker, “not an employer because he is
a capitalist, or in proportion as he is a capitalist.”6 There is, third, the party to whom Mr. Hawley
3. Political Economy, Book I, chap. ii, § 1.
4. Logic, Book III, chap. vii.
5. Mill, Political Economy, Book II, chap. xv, §1.
6. The Wage Question, p. 228.