ductivity curves will show that if we take as the increment
of labor used in making the test only a tenth of the whole force, we
exaggerate the product imputable to it by a very minute fraction, say
by less than a one-hundredth part; and if we take a hundredth of the
labor as a final unit, we exaggerate the product that is solely
attributable to it by an amount so minute that it is of no consequence
in practice or in any theory that tries to be applicable to practice.

A question may be raised as to whether we are correct in saying that
the _entrepreneur's_ profit is residual, in view of the fact that the
entire product of a business is at the mercy of the management, so
that a bad manager may reduce it or a good one may increase it. It may
be further claimed that that part of the management of a business
which consists in making the most far-reaching decisions cannot safely
be intrusted to a salaried superintendent or other paid official and
must get its returns, if at all, in the form of profits. Even in this
case the gains are secured by making the gross return, which is the
minuend in the case, large, leaving the two subtrahends, wages and
interest, unchanged, and thus creating a remainder or residuum. We
shall later see to what extent _entrepreneurs_ do in fact create the
profits that come to them.

The complete static conception of society requires that no
_entrepreneur_ should be left in the field who cannot continue
indefinitely to hold his own against the competition of his rivals,
and this requires essential equality of productive power on the part
of all of them. It is not necessary, however, that all should operate
upon an equal scale of magnitude, for an interesting feature of modern
life is the need of many small productive establishments that cater to
local demands and to wants which, without being local, call for only a
few articles of a kind. Repairs, small orders, and peculiar orders are
executed more cheaply in small establishments, and they survive under
the very rule of essential equality of productive power which static
conditions require. For catering to the general market and producing
staple goods the large establishment has a decisive advantage, and
this insures the centralization which is the marked feature of recent
industrial life.

CHAPTER X

RENT

_The Term "Rent" as Historically Used._--The word _rent_ has a
striking history. The science of political economy first took shape