rence between the first amount and the sum of the two others is
profit, and it is never determined in any other way than by
subtracting outgoes from a gross income. It is the only share in
distribution that is so determined. _Entrepreneur's_ profits and
residual income are synonymous terms. In the static state no such
residual income exists, but from a dynamic society it is never absent.
Every _entrepreneur_ makes some profits or losses, and in society as a
whole the profits greatly predominate.

_Summary of Facts concerning a Static Adjustment of Wages._--We know
then that in any industry wages and interest absorb the whole product,
because any deviation from that rule in a particular group is
corrected in the way above mentioned. Moreover, general wages and
interest, as determined by the law of final productivity, must equal
those incomes when they are determined residually. The area of the
rectangular portion of one of the foregoing figures must equal the
area of the three-sided part of the other. The question arises why
all _entrepreneurs_ might not get a uniform profit at once. This would
not lure any labor or capital from one group or subgroup to another.
If, after paying wages and interest at market rates, the
_entrepreneurs_ in each industry have anything left, the entire labor
and capital are producing more than they get and there is an
inducement to managers and capitalists to withdraw from their present
employers and become _entrepreneurs_ on their own account. Such an
_entrepreneur_ entering the field, drawing marginal labor and capital
away from the _entrepreneurs_ who are already there and combining them
in a new establishment, can make them produce more than he will have
to pay them and pocket the difference. If such a condition were
realized, there would be a gain in starting new enterprises, since
luring away marginal agents and combining them in new establishments
would always be profitable. When we introduce into the problem dynamic
elements we shall see that centralization, which makes shops larger
instead of smaller, makes industries more productive, and that what
happens when net profits appear is more often the enlarging of one
establishment than the creation of new ones. _Entrepreneurs_ in the
large establishments can afford to resist the effort made by others to
lure away any of the labor or capital which they are employing, and
they will do this for the sake of retaining their profits. They can