Note 195-3 — Chapter V

Thus John Stuart Mill, Principles, II, ch. 15, 4, teaches with a certain amount of emphasis that the "gross profits of stock" are different not so much in the different branches in which capital is employed, as according to the personal capacity of the capitalist himself or of his agents. There are scarcely two producers who produce at precisely the same cost, even when their products are equal in quality, and equally cheap. Nor are there two who turn over their capital in precisely the same time. These "gross profits" uniformly fall into three classes: reward for abstinence, indemnity for risk, remuneration for the labor and skill required for superintendence. Mill complains that there is in English no expression corresponding to the French profit de l'entrepreneur. [The translator has taken the liberty to use the expression "undertaker's profit," for what the French call the profit de l'entrepreneur, and the Germans Unternehmerlohn, spite of its funereal associations, and because Mill himself employed it, although he recognized that it was not in good usage.—Tr.] (II, ch. 15, 1) Adam Smith had the true doctrine in germ (Wealth of Nat., I, ch. 6), but those who came after him did little to develop it. Compare Ricardo, Principles, ch. 6. 21. Read, Political Economy, 1829, 262 ff., and Senior, Outlines, 130 seq., were the first to divide profit into two parts: interest-rent (Zinsrente) and industrial gain. Similarly, Sismondi, N. P., IV, ch. 6. According to A. Walker, Science of Wealth, 1867, 253, 285, "profits are wages received by the employer."