reate and claim for themselves the whole output of their
industries. When the _entrepreneur_ has given them their shares, by
paying wages and interest, and has paid for raw materials, he has
nothing left. In actual business competition is often sharp enough to
prevent men from getting more than interest on their capital and a
fair return for the labor they spend in directing their business; and
pure theory here assumes that competition is always and everywhere
sharp enough to do this. It is ideally efficient. Labor and capital
are ideally mobile and ready to flow at once to the points where any
net profits can be made. Such a condition implies that society is in a
_static_ state, and we shall see what this condition is. It implies an
absence of organic change in society. The great collective producer
does not alter either its form or its mode of producing wealth.
Industry goes on, indeed, but it goes on in a changeless way.
Reserving the full description of this state for a later chapter, we
note here that the adjustment which would theoretically bring a
society to such a state would preclude all gains for its
_entrepreneurs_.[3]

[3] The preceding paragraphs may seem to show that if an
_entrepreneur_ ever gets an income, he does it by wresting
from labor and capital a part of their products. We shall see
that in _dynamic industry_ there is a normal way in which he
may get an income without taking anything from the incomes
that labor and capital would get if he did not perform his
part. His return may come from the result of an enabling act
which he performs, whereby both the labor and the capital of
a particular subgroup become more productive than other labor
and capital are and more so than they would be if the
_entrepreneur's_ enabling act were not performed.

_The Merging of Functions Desirable._--The uniting in one person of
the functions of capitalist, laborer, and _entrepreneur_ contributed
much to the productivity of the small-shop system of former days. The
man who had a few thousand dollars invested in a little shop and
employed a few men to assist him got three different kinds of income,
and the sum of the three was larger than anything he could have
secured if he had been only a laborer or only a small capitalist and
_entrepreneur_. He worked harder and more intelligently than a hired
superintendent would have done; he was led to be cautious because his
own cap