en
what is paid for something and what is received for it.

_Mercantile Profit._--It is best, therefore, to distinguish in some
perfectly clear way between that function of the _entrepreneur_, which
consists in buying and selling, and any work that he may find it best
to do in the way of superintending the business. At the cost of using
the term _entrepreneur_ in a stricter sense than the one customarily
attached to it, we will make this word describe the purely mercantile
functionary who pays for the elements of a product and then sells the
product. The reason for the very division between gains from this
source and gains from management we shall soon appreciate, for we
shall see that competition tends to reduce one of these incomes to
nothing, but tends to perpetuate the other and to make the amount of
it conform to a positive standard. The _entrepreneur_, as we shall use
the term, is neither the manager nor the capitalist, and when we have
occasion to speak of either of these functionaries, we shall call him
by his own distinctive name; though we know perfectly well that, in
actual business, it is desirable and often quite essential that the
same one who acts as an _entrepreneur_ should also put into the
business some labor as well as some capital. A man who performs two
unlike functions, buying and selling, on the one hand, and managing
the business, on the other, serves in two capacities that are clearly
distinguished from each other; while if he furnishes any of the
capital, he adds to these a third capacity entitling him to the value
of the product of his capital. As a manager he directly aids in
producing goods, and he gets pay for so doing from his other self, the
_entrepreneur_, who acquires the title to the goods; as a capitalist
he has another legitimate claim upon himself as _entrepreneur_.

_These Distinctions recognized in Practical Accounting._--That this is
no bit of mere theoretical subtlety is proved by the fact that the
bookkeeping of nearly all establishments distinguishes between these
two incomes by actually putting an appraisal on the work the employer
does and paying a salary for it. A man may be a large owner of stock
in a corporation and yet receive a salary that is fixed by an estimate
of what an equally useful man could be hired for. If personal
influence secures more for him than this, the excess is taken from the
pockets of the stockholders, and the amount of it is accounted for in
a way