offer it at the
price that is fixed by its final utility. Like other venders, the
laborer can get the true value of his product and he can get no more.
In an ideally perfect society organized on the competitive plan a man
would be as dependent on his own productive power as he would be if he
were alone in a wilderness. His pay would be his product; but that
would be indefinitely larger than it could be in a wilderness or in
any primitive state. The capital of other men and the organization
that they maintain enable a worker to create and get far more than he
could if he lived alone, even though, like Crusoe, he were monarch of
his whole environment. It would be a losing bargain for the worker to
surrender the product of mere labor in a state of civilization in
exchange for what both labor and capital create in a state of
savagery.

CHAPTER IX

THE LAW OF INTEREST

The product of the final unit of labor--an amount which in practice is
measured without any tracing of the previous growth of the working
force--sets the standard of the rate of wages. We have now to see that
the rate of interest has a similar basis; and yet it is worth while to
build up, wholly in imagination, a fund of capital, just as we have
made up the force of laborers, increment by increment. This will have
the incidental effect of illustrating another way in which wages may
be determined.

_Interest as a Residual Amount._--The area _BCD_ in our former figure
represents the difference between the total product of an industry and
the wages paid to laborers. If there is no net profit accruing to the
_entrepreneur_, this area must represent interest. It is what is left
for the capitalist on the supposition that he and the laborer together
get all that there is. If the goods sell for what they cost, this must
be the fact, and the amount represented by _BCD_ has thus to go to
capital, since, by a rule of exclusion, it cannot go to the
_entrepreneur_ nor to the laborer. The mill and its contents earn for
their operator nothing but simple interest on the money they have
cost. Paying the laborers discharges the first claim on the product,
and there then remains only enough of the product to pay the remaining
claim, that of capital.

The question still remains to be answered, how the capitalist, if he
is a different person from the _entrepreneur_, or operator of the
mill, can make this functionary pay over to him all that he has in his
hands aft