Chapter IV: Book II

THE CHIEF FACTOR IN THE PRODUCTION OF THE
NATIONAL INCOME

I. Of the various Factors in Production, and how to
distinguish the Amount produced by each—

The Cause of Production generally 84
The Production of Given Quantities 85
Production a Century Ago 86
Amount of Capital employed in it 87
Land, Capital, and Human Exertion 88
How much produced by each 89
The chief Practical Problem in Contemporary Economics 90

II. How the Product of Land is to be distinguished
from the Product of Human Exertion—

Rent the Product of Land 93
The Accepted Theory of Rent illustrated by an
Example 94
The Product of Agricultural Labour 96
The Product of Land 97
Maximum Produce of Labour 98
Surplus produced by Land 99
Land a Producing Agent as distinct from Labour 100
The Existence of Rent not affected by Socialism 102
Rent necessarily the Property of whoever owns the
Land 104
The Argument of this Volume embodied in the case
of Rent 106

III. Of the Products of Machinery or Fixed Capital,
as distinguished from the Products of Human
Exertion—

Capital of Two Kinds 108
The part of the Product produced by Machinery or
Fixed Capital 110
Example of Product of Machinery as distinct from
that of Labour 112
The Products of a Machine necessarily the Property
of Owner 114
The Cotton Industry in the Last Century 116
Arkwright’s Machinery 118
The Iron Industry of Great Britain 119
Machinery and Production of Iron 120
Machinery and Wage Capital 121

IV. Of the Products of Circulating Capital, or Wage
Capital, as distinguished from the Products of
Human Exertion—

Simplest Function of Wage Capital 122
Distinguishing Function of Modern Wage Capital 124
Wage Capital mainly productive as a means of
directing Labour 126
Slaves and Free Labourers 128
Wage Capital and Progress 129
Wage Capital as related to the production of New
Inventions 130
Capital the Tool of Knowledge 132
Wage Capital and Arkwright 133
Wage Capital as Potential Machinery 134
How to discriminate the amount produced by Wage
Capital 136

V. That the Chief Productive Agent in the modern world
is not Labour, but Ability, or the Faculty which
directs Labour—

The best Labour sometimes useless 138
Labour not the same faculty as the faculty which
directs Labour 140
Extraordinary confusion in current Economic
Language 142
Labour a Lesser Productive Agent 144
Ability a Greater Productive Agent 145
The Vital Distinction between Ability and Labour 146
Ability not a form of Skilled Labour 148
Capital applied successfully the same thing as
Ability 150
Obvious Exceptions 152
Ability the Brain of Capital 153
Ability as the Force behind Capital the Cause of
all Progress 154

VI. Of the Addition made during the last Hundred Years
by Ability to the Product of the National Labour.
This Increment the Product of Ability—

Production in the Last Century 156
Growth of Agricultural Products 158
Growth of Production of Iron 159
Ability and Agriculture in the Last Century 160
The Maximum Product that can be due to Labour
alone 162
Present Annual Product of Ability in the United
Kingdom 164
The Product of Capital virtually Product of the
Ability of the Few 166