the consumers' wealth of society than they have
heretofore done. Society uses fewer luxuries and more necessaries, and
the necessaries of life are products in which raw materials
predominate and costly form utilities are wanting. This makes a
heavier draft upon the land than does the production of highly wrought
articles of the same value.

Luxurious articles are fashioned with a great amount of artisan's or
artist's labor and a relatively small amount of the labor of
cultivators and miners. The subgroups _A_, _B_, and _C_ are the ones
that furnish the rawest materials, and it is they, therefore, that
receive the largest portions of the new labor that enters the field.

_How Economic Friction works to the Disadvantage of
Immigrants._--Unless capital grows more rapidly than population, there
is a certain friction to be overcome in obtaining places for new
laborers. If they come largely as immigrants, they are crowded at the
points of disembarkation and are then scattered over a large
territory. They may have to gain employment by offering to
_entrepreneurs_ some inducement to take them. If capital has not
increased, and the _entrepreneurs_ are in no special need of new men,
they will take them only at a rate of pay which is low enough to
afford of itself a slight margin of profit. If the capital has already
grown larger and the new men are needed, the situation favors them,
and their pay is likely to be as high as it was before, or higher.

_The Effect of Increasing Capital._--The growth of capital has an
opposite effect. It means a lower rate of interest, though it means
more interest in the aggregate, since it insures a larger fund on
which the interest is received. The rate does not decline as rapidly
as the amount of the fund increases, and this insures a larger gross
income from the fund; and it also insures larger individual incomes
for many persons. There is, then, a large number of people who are in
a position to make their consumption more luxurious, and this causes
an upward movement of labor and capital in the group system. More
workers will be needed in the subgroups _A'''_, _B'''_, and _C'''_,
where raw materials receive the finishing touches, and also in the
other subgroups above the lowest tier. It is to these subgroups that a
large portion of the new capital itself will come, and the labor will
come with it. Larger incomes, more luxury, more labor spent in
elaborating goods as compared with that requir