Note 793 — Chapter II · : THE APOGEE AND DECLINE OF THE CLASSICAL SCHOOL. JOHN STUART MILL

“There is at every time and place some particular rate of profit, which is the lowest that will induce the people of that country and time to accumulate savings.… But though the minimum rate of profit is thus liable to vary, and though to specify exactly what it is would at any given time be impossible, such a minimum always exists; and whether it be high or low, when once it is reached no further increase of capital can for the present take place. The country has then attained what is known to political economists under the name of the Stationary State.” (Ibid., Book IV, chap. 4, § 3.)

Mill indicates the causes that contribute to a fall in the rate of profits as well as the causes that arrest that fall, such as the progress of production and the destruction of wealth by wars and crises.

It may be worth while pointing out that the word profit as employed by the English economists, and especially by Mill, has not the same meaning as it has with the French writers. French economists since the time of Say have employed the term profit to denote the earnings of the entrepreneur, the capitalist’s income being designated interest. The English economists do not distinguish between the work of the entrepreneur and that of the capitalist, and the term profit covers them both. The result is that the French Hedonistic economists can say that under a régime of absolutely free competition profit would fall to zero, while the English economists cannot accept their thesis because profits include interest, which will always remain as the reward of waiting.

The French point of view is more generally adopted to-day.