Distribution

“ Into the distribution between individuals and classes there enter other and variable factors, governed by no fundamental economic law; and here, the conclusion should at once suggest itself, is the field for action designed to alter the distribution of wealth. ”

“ On what principle can we divide the earth into sections for economic purposes? These are some of the questions which must be answered if a theory of distribution is to have any definiteness of meaning, and they arise whenever we try to establish a static standard of any kind. ”

“ Definition of personal distribution reviewed
1. Personal distribution, in economics, is the reasoned explanation of the ways in which income is divided among the members of the community. Before noting more exactly the ways in which distribution can and does take place, it may be well to review briefly some definitions that have been given in other connections. Distribution is bound up in practice with production, but it can be thought of as a more or less distinct problem. ”

“ Production, distribution, exchange, and consumption thus form a perfect connection, production standing for the general, distribution and exchange for the special, and consumption for the individual, in which all are joined together. ”

“ The momentous change in the status of the workman which accompanied the revolution of industrial processes, transformed the whole problem of labor from the question of production to that of distribution, and it is the effort to find an equitable adjustment of the problem of distribution that is taxing to the utmost the ingenuity of economists, philosophers, and statesmen. ”

“ In the wider sense the term also includes the apportionment of the sacrifices incurred in the joint production. Distribution, as thus defined, is the element that appears in economic life in consequence of social organization. This is a secondary element, indeed; for man, nature and their relations and interactions are the primary facts, and the relations of men to each other come logically after these. ”

“ Continuing the inquiry into the nature of the economical changes taking place in a society which is in a state of industrial progress, we shall next consider what is the effect of that progress on the distribution of the produce among the various classes who share in it. We may confine our attention to the system of distribution which is the most complex, and which virtually includes all others—that in which the produce of manufactures is shared between two classes, laborers and capitalists, and the produce of agriculture among three, laborers, capitalists, and landlords. ”

“ Economists, like Ricardo, who are accused above all of having paid exclusive attention to production, define distribution, therefore, as the exclusive subject of political economy, because they instinctively [5] regard the forms of distribution as the clearest forms in which the agents of production find expression in a given society. ”

“ So unintentionally has there arisen the elaborate division of labor by which production and distribution are now carried on, that only in modern days has there come a recognition of the fact that it has all along been arising. ”

“ Distribution primarily Functional rather than Personal.—Where men get incomes that are composed of wages, interest, and profits, economic science should, in the first instance, tell us how the rates of wages and interest and the amount of profits are determined. A study of the static laws of distribution concerns itself with the reward of labor as such, and the reward of capital as such, while a study of dynamics takes account of pure profits. ”

“ Sir, this system of distribution is, in all its shapes, liable to many and powerful objections.—I will not go into them at this time, because the subject has recently undergone a thorough discussion in the other house, and because, from present in the other house, and because, from present indications, we shall shortly have up the subject here. "Sufficient unto the day is the evil thereof." ”

“ Production thus appears as the starting point; consumption as the final end; and distribution and exchange as the middle; the latter has a double aspect, distribution being defined as a process carried on by society, while exchange, as one proceeding from the individual. In production the person is embodied in things, in [consumption [2] ] things are embodied in persons; in distribution, society assumes the part of go-between of production and consumption in the form of generally prevailing rules; in exchange this is accomplished by the accidental make-up of the individual. ”

“ No Wealth is finally produced until, finished for ultimate consumption, it has been produced to ultimate consumers by final delivery.
Quite another thing is Distribution in the technical Economic sense. In this sense Distribution is the apportionment of Labor-produced Wealth in appropriate categories with reference to the Economic relationship of Labor to Land—of Man to Natural Resources. ”

“ Fundamentally, Economic Distribution is a twofold apportionment of the Wealth produced by Labor from and upon Land, whereby one portion is naturally allocated to Labor as its producer and the other to Land-ownership as the controller of Natural Resources and sites. ”

“ These terms mutually exclude each other. The income of any individual may be made up from any one, two, or all three of these sources; but in the effort to discover the laws of distribution we must keep them separate. ”

“ Distribution further resolves the share of each particular industry into final portions for the use of the laborers and capitalists in that industry; and these correspond with the amounts which these laborers and capitalists contribute. ”

“ The Distribution of Wealth, as well as its Production, is effected through Trade. As in the Productive Process from the very beginning of Labor specialization up to the point of delivery to ultimate consumers, so in the process of Distribution, Trade is the continuous and the culminating agency. It determines the kind of Wealth and the quantity that each factor in Production shall receive. ”

“ Nor is distribution, considered in its impersonal or economic form, any other than the logical valuing of the shares of the factors in economic production. Impersonal distribution is coextensive with economic production. Whatever a good, logically considered, contributes to value in production, that is its share of the product. Personal distribution, it is true, brings in other great influences which have been partly considered, but which will be treated more fully in the division to follow, on the influence of the state in the distribution of income. ”

“ This is the dominant form of distribution in modern society. It is the essentially economic form, as contrasted with the legal and personal forms just described, because it is impersonal and reducible to a rule of value. ”

“ The dominant method of distribution to-day is that of competition. [7] This is not a mere accident, but is a resultant of unending experimentation with different methods of distribution carried on since the beginning of human society. A method of distribution had to be found and retained that would work under the conditions of human nature at each stage of social progress; and competition, however imperfectly, has worked. It is evident from the voices of praise and of blame that competition has its good and its bad aspects. ”

“ As has been suggested in an earlier paragraph, it is characteristic of hedonistic economics that the large and central element in its theoretical structure is the doctrine of distribution. Consumption being taken for granted as a quantitive matter simply,—essentially a matter of an insatiable appetite,—economics becomes a theory of acquisition; production is, theoretically, a process of acquisition, and distribution a process of distributive acquisition. The theory of production is drawn in terms of the gains to be acquired by production ”

“ The economist, it is said, analyses with great pomp and ceremony the laws governing the distribution of wealth among the agents of production, but says practically nothing about the distribution between individuals and classes, which is the only thing of any real interest to practical people. Now the economist concentrates on the agents of production for the very good reason that it is only with respect to them that any clear and certain laws as to distribution can be laid down. ”

“ The subdivisions and organization of distribution are determined by the subdivisions and organization of production. Distribution is itself a product of production, not only in so far as the material goods are concerned, since only the results of production can be distributed; but also as regards its form, since the definite manner of participation in production determines the particular form of distribution, the form under which participation in distribution takes place. It is quite an illusion to place land under production, rent under distribution, etc. ”

“ In fact, however, although economists do discuss how—if at all—the system of production and distribution of goods can be improved, they have always regarded it as their principal function to describe accurately what the rules that govern production and distribution really are, rather than what they ought to be. ”

“ The answer to all these questions must be sought in the science which teaches in what wealth consists, by what agents it is produced, and according to what laws [pg 252] it is distributed, and what are the institutions and customs by which production may be facilitated, and distribution regulated, so as to give the largest possible amount of wealth to each individual. ”

“ In discussing these problems, however, we must remember that wealth production and distribution takes place in modern society under conditions imposed by the social order in which we live; these were defined as competition, private property and personal liberty. If any modifications of the processes of distribution were desired, it would undoubtedly be necessary to alter these fundamental institutions. ”

“ That it can reach only through production. * * * If we look over the legislation by which the ruling portion of our communities have striven to affect the distribution of wealth, we shall find that (as if conscious of its hopelessness) they have seldom if ever tried directly to affect the distribution of wealth; but have tried to affect distribution indirectly through production. ”

“ His abstinence from precept, and even from illustrations drawn from real life, is the more remarkable, as the subject of his treatise is distribution, the most practical branch of Political Economy, and taxation, the most practical branch of distribution.
The modern economists of France, Germany, Spain, Italy, and America, so far as I am acquainted with their works, all treat Political Economy as an art. ”

“ Instead of distributing the product of the nation directly to its members, which would seem the most natural and obvious method, it would actually appear that you had given your minds to devising a plan of hand to hand distribution, involving the maximum of personal humiliation to all classes of recipients. ”

“ Much discussion has, during the growth of the science of economics, centred round what is and what is not productive or unproductive, and as to the relative importance of the functions of production and distribution. ”

“ It must be recognized that the principle of diminishing utility applies to each method of distribution as it does to the productive processes. Each may be best under certain conditions and circumstances, but, extended in application, each reveals its weaknesses. In any productive process the best method depends upon the proper proportion and combination of elements. Progress toward the best possible distribution is to be sought in the wise adjustment of the various methods to human nature and to human needs. ”

“ The second exception, of which I shall speak at length in a subsequent chapter, consists in the known effect of an extension of the market for a commodity, in rendering possible an increased development of the division of labour, and hence a more effective distribution of the productive forces of society. ”

“ The aim, however, in the development of this theory of distribution, has been to proceed by gradual steps, as in a series of geometrical propositions, from the simple and familiar acts and experiences of the individual's every-day life, through the more complex relations, to the most complex, practical, economic problems of the day. The hope has long been entertained by economists that a conception of the whole problem of value would be attained that would coördinate and unify the various "laws,"—those of rent, wages, interest, etc. ”

“ The work under consideration is admirable as a theoretical discussion in that it is centralized about the shares in distribution, preceded by what the author considers necessary by way of introduction, namely ‘value,’ ‘diminishing returns,’ and ‘forms of wealth and income.’ The concrete is everywhere uppermost throughout the book. ”

“ Men's products, even in the disturbed conditions of actual life, set the standards to which their returns tend to conform, though they vary from them in ways that we shall not fail to notice.
Group Distribution.—The grand total of the social income has to go through a preliminary division before it is shared by laborers, capitalists, and entrepreneurs. ”

“ If the distribution is to be made without reference to the natures and deeds of the recipients, then it must be shown that a system which equalizes, as far as it can, the treatment of good and bad, will be beneficial. ”

“ If the income distribution remains the same (all incomes grow with the same rate) then also the average income, y = W grows at the same rate, and then also the net income distribution remains the same, and then the ratio of net average to subsistence remains the same too. ”