of profits are
earned by a larger number of enterprises. It is beyond the scope of any
policy of wage settlement, however, to control the distribution of
profits among the enterprises engaged in an industry.

There are some groups who would argue that no division of the product of
industry is fair unless it gives to the wage earners the whole of the
product. Such a view, of course, amounts to a desire to revise the whole
of the present economic system fundamentally. No policy of wage
settlement akin to that put forward in this book could win favor in
their eyes. And if their opinion should become dominant, industrial
peace would have to be sought by arrangements far different from those
under discussion. For those arrangements rest on the supposition that
the country will continue to desire to depend, in the main, upon private
accumulation for capital, and individual ambition for business
leadership.

2.--It is possible by bringing into balance a numerous set of factors,
to give a reasonably definite meaning to the idea of a fair profits
return. That is to say, by weighing all relevant considerations, it is
possible to define a general level of profits for industry as a whole,
which would represent a just and sound division of the product of
industry between wages and profits. The relevant considerations are
those which will be likely to hold an important place in the better
informed sections of public opinion during the period for which these
proposals are intended; and which are admissible as sound and pertinent,
on the supposition that the industrial system is to continue to depend
mainly upon private initiative and private accumulation.

The most important of these considerations are, in my opinion, as
follows: First: that the ethical ideas of reward according to need, or
reward according to sacrifice, would call for the elimination of the
greatest present inequalities of reward; and that these ethical ideas
must be given rank among the factors which deserve real consideration
when arrangements affecting the distribution of the product are being
made. Secondly: the service of capital in effective production, the
sacrifice involved in much accumulation, and the risk involved in much
investment; the great need of assuring continued capital accumulation
and investment. Likewise, the importance to industry of active and
enterprising leadership. Thirdly: the social and economic evil effects
of great inequality of we