This historic book may have numerous typos and missing text. Purchasers can download a free scanned copy of the original book (without typos) from the publisher. Not indexed. Not illustrated. 1907 Excerpt: ...the capital of society as a whole increases, a similar pressure is placed upon the labor supply, for which there is no ready means of relief. The existing capital is normally sufficient to provide every one who desires to work with the necessary appliances. If, then, the capital of all industries increases more rapidly ...
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This historic book may have numerous typos and missing text. Purchasers can download a free scanned copy of the original book (without typos) from the publisher. Not indexed. Not illustrated. 1907 Excerpt: ...the capital of society as a whole increases, a similar pressure is placed upon the labor supply, for which there is no ready means of relief. The existing capital is normally sufficient to provide every one who desires to work with the necessary appliances. If, then, the capital of all industries increases more rapidly than the population, the average capital employed with each laborer must increase. Such increase in capital must be embodied in improvements upon existing appliances, and owing to the operation of the law of diminishing returns, will increase the product of industry less than an equal amount of capital did when the social fund was smaller. There are of course conditions under which an increase in capital may not result in a reduction in the productivity of capital. If, for example, the labor supply increased more rapidly than the supply of capital, a larger share of the joint product of labor and capital would be imputable to the latter factor in production. Again, suppose that some cheap method of draining extensive swampy regions or of irrigating vast tracts of arid land were discovered. Capital would then abandon the least productive existing investments and flow into the new fields thus opened. The product of capital on the least attractive fields--which is the measure of the productivity of capital in all fields--would be greater after the change than before it. In like manner, an invention may increase the efficiency of capital throughout an industry and lead to the withdrawal of capital from the least productive investments and to an increase in the general productivity of capital. It has already been indicated that an increase in the amount of capital invested in one form of capital goods without a corresponding increase in the capita...
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