r part of the capital makes to the product. Since each
bit of capital in an establishment contributes something toward the
creating of the product, the employer's own capital has the same right
to the value of its contributary share as has the capital of any one
else. What the employer-capitalist gets for capital the employer,
pure and simple, pays. As the furnisher of instruments the man is a
vender of the product of these instruments, while as an _entrepreneur_
proper he is the buyer. He must purchase the product of his own
capital just as he purchased the product of his own labor. In paying,
therefore, wages for all labor, including what he performs himself,
interest on all capital, including his own, and the price of raw
materials, he gets something which, if competition does a perfect
work, he has to sell for what he gives for it. The shoes, when he
sells them, tend, under active competition, to yield only what has
been paid for them in the making and, in a perfectly static state,
would actually yield no net profit. All the _entrepreneur's_ costs,
therefore, resolve themselves into purchase money paid, his receipts
are money accruing from sales; and under ideally free competition the
two sums total are equal.

_The Entrepreneur's Proper Function not Labor of Management._--In some
theoretical discussions the management of a business figures as the
principal function of the _entrepreneur_, and all or nearly all of the
reward that comes to him is represented as coming in the shape of a
reward for a responsible kind of labor that calls great abilities into
requisition. But it is very clear that, whether he personally performs
any labor or not, the employer has a distinctly mercantile function to
perform; and this in itself is totally unlike the work of overseeing
the mill, the shop, or the salesroom. He acquires a title to the whole
product by paying for the contributions which labor and producers of
raw material separately make toward it, and then parts with the
product; and if he gets any more than he has paid out, he makes a
profit. When industry is in what we have termed a dynamic state, such
a difference between the value of the product and the cost of the
elements that go into it is continually appearing, and that, too,
largely in consequence of causes over which, as a mere manager, the
employer has no control. A profit so gained cannot be wages of
management. It is a purely commercial gain, or a difference betwe