a plain examination of socialism

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Purchase of this book includes free trial access to www.million-books.com where you can read more than a million books for free. This is an OCR edition with typos. Excerpt from book: CHAPTER VI THE EXPENSES OF PRODUCTION AND THE ELEMENT OF RISK In the production of any commodity whatever there is a necessary outlay entirely irrespective of the destination or future value of the commodity produced. Whether I produce for my own personal consumption or for a speculative investment leading to an eventual exchange, the expense of production must necessarily be paid out of present wealth. The factors of production being land, labor, capital, and superintendence, these have to be furnished in advance, or else no production is possible. Moreover, they have to be furnished whether they are paid for or not, by the director of the productive enterprise; the conductor of the productive enterprise may be able to secure the necessary factors of production (whether land or labor or capital) and agree to pay for them when the commodity shall have been disposed of at some future period ; but in this case the furnishers of the means of production (land or labor or capital) are merely taking their share in the risks and contingencies. In such a case they may either agree to take a proportionate share or piece ofthe product (whatever may be its eventual market value) or their share of the price ultimately obtained for it, if any. Obviously, such an arrangement of general division, at agreed proportions of the risks in productive enterprise, rarely occurs,and is generally impracticable, especially in the payment of the labor necessary for production. As every productive enterprise always contains an element of risk, the great difficulty in profit-sharing between employer and employee lies in the fact that the employees are not in a position to bear risks. For this reason the undertaker of the productive enterprise agrees in advance to pay for all his necessary outlays ...
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