ondition of
ideally perfect competition as we have assumed each of these functions
is rewarded according to the product that it creates; and each man
accordingly is paid an amount that equals the total product which he
personally creates. Men's products, even in the disturbed conditions
of actual life, set the _standards_ to which their returns tend to
conform, though they vary from them in ways that we shall not fail to
notice.

_Group Distribution._--The grand total of the social income has to go
through a preliminary division before it is shared by laborers,
capitalists, and _entrepreneurs_. In each industry the pay of all
these functionaries comes from the selling price of the commercial
article that they cooeperate in making. The price of shoes pays all
shoemakers, whether what they contribute to the manufacturing is
labor, capital, or mere cooerdination; and it also pays ranchmen and
tanners for what they contribute in the shape of leather, raw and
dressed. If the price of shoes should rise, there would be a larger
income for the group whose activities create them. So if woolen
clothing were to become dearer, there would be more money for the
group that makes it, and this would include those who raise sheep and
those who convert wool into cloth, as well as the garment makers
themselves. The question, what members of a group would get the
benefit of a rise in the price of its product, is one that must be
discussed in connection with economic dynamics, and we shall find,
when we reach this part of the subject, that it is _entrepreneurs'_
gains which come largely from sources like this. We have already seen
that, in a static condition and with prices, wages, and interest
immovably held at rates to which perfectly free competition would
bring them, _entrepreneurs_ as such would get _nil_, and the whole
price of every article would be distributed among the laborers and the
capitalists who make it. The proof of this will appear when we have
examined the process by which the values of goods are adjusted, and
this will help to prepare the way for a study of the sources of net
profits, which are an all-important feature of actual business.
Society is honest or dishonest according as this _entrepreneurs'_
income is gained in one way or in another; and it is not too much to
say that before the court of last resort, the body of the people, no
system of business will be allowed permanently to stand unless the
basic principle