ital was risked in his business, and yet he was spurred to
enterprise by the fact that when, by virtue of the influences which we
call _dynamic_, profits were made, he got them. Even in the largest
corporations the same conditions contribute to success, and it is best
that managers should be owners of some part of the capital which they
handle and receivers of some portion of the profits which they try to
secure for their companies. Where competition is sharp, companies
directed by their owners may supplant those of which the direction is
given over to hired managers. The growth of corporations does,
however, tend to put salaried men more and more into controlling
positions and to reduce the power of the body of stockholders, who
perform a joint function as capitalists and _entrepreneurs_. In itself
this tends to reduce profits and detracts from the advantages which
the incorporation of a business offers.

_Distribution primarily Functional rather than Personal._--Where men
get incomes that are composed of wages, interest, and profits,
economic science should, in the first instance, tell us how the rates
of wages and interest and the amount of profits are determined. A
study of the static laws of distribution concerns itself with the
reward of labor as such, and the reward of capital as such, while
a study of dynamics takes account of pure profits. When we know
what the rates of wages and interest are, we can tell what any
capitalist-manager should have by knowing how much capital he
furnishes and how much and how well he works as a manager. If the
business is yielding a net profit, over and above the interest on its
capital, we can tell what part of this net income any one stockholder
will get--in the form of a rate of dividends in excess of the rate of
interest--if we know how much of the common stock of the company he
owns. His personal income depends on the incomes attaching to the
functions he performs. The science of distribution should tell us
primarily, not what any man personally gets as a total income and how
well off he is as compared with other men, but in what way the wages
of his labor, the interest on his capital, and the return for the
_entrepreneur's_ function are fixed. In technical terms this is saying
that distribution is primarily _functional_ and not personal. Certain
forces assign certain rewards to different functions which are
involved in the creating of wealth, and the science of distribution