e.

Taking this remainder of income from the _entrepreneur_ by means of an
addition to the output of goods and a reduction of the price of them
does not annihilate the income, but bestows it on other recipients;
for the reduction in price which destroys an employer's profit can
come only in a way that benefits consumers. It means that enlarged
production of which we have just spoken, which scatters more goods
throughout the community and insures an addition to the real incomes
of both laborers and permanent investors.

_Effect of Perfect Mobility of Labor and Capital._--Perfect mobility
of labor and capital insures that the residuum in the _entrepreneur's_
hands after wages are paid shall all be made over to the capitalist.
We encounter here again the static law that, with competition working
without let or hindrance, the _entrepreneur_ as such can keep nothing
for himself; though if he is also a worker he will get wages, and if
he is also a capitalist he will get interest. His business will pay
wages on all kinds of labor, including that of management, and
interest on all capital, including his own. A net gain above all this
it will not afford, and whatever the _entrepreneur_ has left after
paying wages he will have to use in paying interest, and _vice versa_.
Laborers and owners of capital have, as it were, to take each others'
leavings. Such is the situation in an ideally static condition, though
we shall see how it is changed in actual and progressive society.

The area _BCD_ of the first figure is, under static conditions,
exactly equal to the area _A'B'D'E'_ of the second figure, because
_ACDE_ represents the whole product, _BCD_ in the first figure
represents all that is left of it after wages, measured by _ABDE_, are
paid; and we know by evidence both theoretical and practical that the
capitalist, whose share is directly expressed by _A'B'D'E'_ of the
second figure, can claim and get the whole of this amount.

_Wages as a Residuum._--It is clear that the same reasoning applies to
wages. In the second figure they are represented as a residuum. The
area _B'C'D'_ represents what the _entrepreneur_ has left after paying
interest, and nobody can get this amount but the wage earner. The
reason, however, why the wage earner can get it is that free
competition will give him the amount _ABDE_ of the first figure, and
this, under perfectly static conditions, must equal _B'C'D'_ of the
second. Under perfect competition