Thelikeholdstruefortheworkandpayoftheforceofworkmenengagedintheindustrialprocessesunderbusinessmanagement。Itholds，inameasure，ofallmodernindustrythatproducesforthemarket，butitholdstrue，inaneminentdegree，ofthoselinesofindustrythataremorefullyundertheguidanceofmodernbusinessmethods。Thesearemostcloselyintouchwiththemarketandaremostconsistentlyguidedbyconsiderationsofvendibility。Theyarealso，onthewhole，morecommonlycarriedonbyhiredlabor，andthewagespaidarecompetitivelyadjustedongroundsofthevendibilityoftheproduct。Thebruteserviceabilityoftheoutputoftheseindustriesmaybealargefactorinitsvendibility，perhapsthelargestfactor；butthefactremainsthattheendsoughtbythebusinessmenincontrolisaprofitablesale，andthewagesarepaidasameanstothatend，nottotheendthatthewayoflifemaybesmootherfor。theultimateconsumerofthegoodsproduced。27*
　　Theoutcomeofthisrecital，then，isthatwhereverandinsofarasbusinessendsandmethodsdominatemodernindustrytherelationbetweentheusefulnessoftheworkforotherpurposesthanpecuniarygainandtheremunerationofitisremoteanduncertaintosuchadegreethatnoattemptatformulatingsucharelationisworthwhile。Thisiseminentlyandobviouslytrueoftheworkandgainsofbusinessmen，inwhateverlinesofbusinesstheyareengaged。Thisfollowsasanecessaryconsequenceofthenatureofbusinessmanagement。
　　Workthatis，onthewhole，uselessordetrimentaltothecommunityatlargemaybeasgainfultothebusinessmanandtotheworkmenwhomheemploysasworkthatcontributessubstantiallytotheaggregatelivelihood。Thisseemstobepeculiarlytrueofthebolderflightsofbusinessenterprise。Insofarasitsresultsarenotdetrimentaltohumanlifeatlarge，suchunproductiveworkdirectedtosecuringanincomemayseemtobeanidlematterinwhichtherestofthecommunityhasnosubstantialinterests。Suchisnotthecase。Insofarasthegainsoftheseunproductiveoccupationsareofasubstantialcharacter，theycomeoutoftheaggregateproductoftheotheroccupationsinwhichthevariousclassesofthecommunityengage。
　　Theaggregateprofitsofthebusiness，whateveritscharacter，aredrawnfromtheaggregateoutputofgoodsandservices；andwhatevergoestothemaintenanceoftheprofitsofthosewhocontributenothingsubstantialtotheoutputis，ofcourse，deductedfromtheincomeoftheothers，whoseworktellssubstantially。
　　Thereare，therefore，limitstothegrowthoftheindustriallyparasiticlinesofbusinessjustspokenof。A
　　disproportionategrowthofparasiticindustries，suchasmostadvertisingandmuchoftheothereffortsthatgointocompetitiveselling，aswellaswarlikeexpenditureandotherindustriesdirectedtoturningoutgoodsforconspicuouslywastefulconsumption，wouldlowertheeffectivevitalityofthecommunitytosuchadegreeastojeopardizeitschancesofadvanceorevenitslife。Thelimitswhichthecircumstancesoflifeimposeinthisrespectareofaselectivecharacter，inthelastresort。Apersistentexcessofparasiticandwastefuleffortsoverproductiveindustrymustbringonadecline。Butowingtotheveryhighproductiveefficiencyofthemodernmechanicalindustry，themarginavailableforwastefuloccupationsandwastefulexpendituresisverygreat。Therequirementsoftheaggregatelivelihoodaresofarshortofthepossibleoutputofgoodsbymodernmethodsastoleaveaverywidemarginforwasteandparasiticincome。Sothatinstancesofsuchadecline，duetoindustrialexhaustion，drawnfromthehistoryofanyearlierphaseofeconomiclife，carrynowell-definedlessonastowhatamodernindustrialcommunitymayallowitselfinthisrespect。
　　Whileitisinthenatureofthingsunavoidablethatthemanagementofindustrybymodernbusinessmethodsshouldinvolvealargemisdirectionofeffortandaverylargewasteofgoodsandservices，itisalsotruethattheaimsandidealstowhichthismannerofeconomiclifegiveseffectactforciblytooffsetallthisincidentalfutility。Thesepecuniaryaimsandidealshaveaverygreateffect，forinstance，inmakingmenworkhardandunremittingly，sothatonthisgroundalonethebusinesssystemprobablycompensatesforanywastesinvolvedinitsworking。Thereseems，therefore，tobenotenablegroundforthinkingthattheworkingofthemodernbusinesssysteminvolvesacurtailmentofthecommunity’slivelihood。Itmakesupforitswastefulnessbytheaddedstrainwhichitthrowsuponthoseengagedintheproductivework。
　　1。TheulteriorgroundofeffortsdirectedtotheaccumulationofwealthisdiscussedatsomelengthintheTheoryoftheLeisureClass，ch。II。andV，andtheeconomicbearingofthebusinessman’sworkistreatedinapaperon“IndustrialandPecuniaryEmployments，“intheProceedingsofthethirteenthannualmeetingoftheAmericanEconomicAssociation。Cf。alsoMarshall，PrinciplesofEconomics3ded。，bk。I。ch。III，bk。IV。ch。
　　Itissignificantthatjoint-stockmethodsoforganizationandmanagement——thatistosay，impersonallycapitalisticmethods——aretraceable，fortheiroriginandearlyformulation，totheshippingcompaniesofearlymoderntimes。Cf。K。Lehmann，DiegeschichtlicheEntwickelungdesAktienrechtsbiszumCodedeCommerce。ThelikeviewisspokenforbyEhrenberg，ZeitglterderFugger；seevol。II。pp。325etseq。
　　Cf。Cantillon，EssaisurleCommerce，1epartie，ch。III，VI，IX，XIV，XV，WealthofNations，bk。I；Bucher，EnstehungderVolkswirtschaft3ded。，ch。IVandV；Sombart，Kapitalismus，Vol。Ibk。I。
　　Sombart，vol。I。ch。IV-VIII；Ashley，EconomicHistoryandTheory，bk。II，ch。VI，especiallypp。389-397。
　　Cf。Marshall，PrinciplesofEconomics，onthe“LawofSubstitution，“e。g。bk。VI。ch。I。Thelawofsubstitutionimpliesfreedomofinvestmentandappliesfullyonlyinsofarastheinvestorinquestionisnotpermanentlyidentifiedwithagivenindustrialplantorevenwithagivenlineofindustry。Itrequiresgreatfacilityinshiftingfromonetoanotherpointofinvestment。Itisthereforeonlyasthebusinesssituationhasapproachedthemodernformthatthelawofsubstitutionhascometobeofconsiderableimportancetoeconomictheory；foratheoryofbusiness，suchasbusinesswasinmediaevalandearlymoderntimes，thislawneedscarcelyhavebeenformulated。
　　SeeSombart，Kapitalismus，vol。1。chap。VIII。
　　Itischieflythepassiveownerofstockandthelikethatholdspermanentlytoagivenenterprise，underthefullydevelopedmodembusinessconditions。Theactivebusinessmanofthelargersortisnotinthiswayboundtotheglebeofthegivenbusinessconcern。
　　Cf。testimonyofJ。B。Dill，ReportoftheIndustrialCommission，vol。I。pp。1078，1080-1085；“DigestofEvidence，“
　　p。，77。alsotestimonyofvariouswitnessesonstockspeculationandcorporatemanagement，andparticularlythespecialreporttotheCommission，on“SecuritiesofIndustrialCombinationsandRailroads，“vol。XIII。，especiallypp。920-922。
　　Thehistoryoftheformationofanyoneofthegreatindustrialcoalitionsofmodemtimeswillshowhowgreatandindispensableafactorinthelargebusinessistheinventionandorganizationofdifficultiesdesiredtoforcerivalenterprisestocometoterms。E。g。themanoeuvrespreliminarytotheformationoftheUnitedStatesSteelCorporation，particularlythemovementsoftheCarnegieCompany，showhowthisworksonalargescale。Cf。E。S。Meade，TrustFinance，pp。204-217。ReportoftheIndustrialCommission，vol。XIII。，“ReviewofEvidence，“
　　pp。v-vii，withthetestimonyrelatingtothistopic。Thepressurewhichbringsaboutanewadjustmentcoalitioniscommonlyspokenofas“excessivecompetition。“
　　Cf。，e。g。，theaccountsoftheformationoftheUnitedStatesSteelCorporationortheShipbuildingCompany。
　　Witnesstheratewarsandtheduplicationsofinefficienttrackandterminalequipmentamongtherailways，andthesimilarduplicationsintheironandsteelindustry。ThesystemofrailwayterminalsinChicago，e。g。，isanilluminatedobject-lessonofsystematicineptitude。
　　Thesplendidreachofthisinhibitoryworkofthecaptainofindustry，aswellasofhisaggressiveworkofconsolidation，iswellshown，forinstance，inthehistoryandpresentpositionoftherailwayindustryinAmerica。Itisandhasforalongtermofyearsbeenobviousthataverycomprehensiveunificationorconsolidation，inrespectofthemechanicalworktobedonebytherailwaysystem，iseminentlydesirableandfeasible，-
　　consolidationofascopenotonlyequalling，butfaroutreaching，thecoalitionswhichhavelatelybeeneffectedorattempted。Thereisnohazardinventuringtheassertionthatseveralhundredsofmenwhoareengagedinthemechanicalworkofrailroading，inonecapacityandanother，areconversantwithfeasibleplansforeconomizingworkandimprovingtheservicebymorecomprehensiveandclosercorrelationofthework；anditisequallyobviousthatnothingbutthediverginginterestsofthebusinessmenconcernedhindersthesecloserandlargerfeasiblecorrelationsfrombeingputintoeffect。Itiseasilywithinthemarktosaythatthedelaywhichrailwayconsolidationhassuffereduptothepresent，frombusinessexigenciesasdistinctfromthemechanicalcircumstancesofthecase，amountstoanaverageofatleasttwentyyears。Eversincerailroadingbeganinthiscountrytherehasbeengoingonaprocessofreluctantconsolidation，inwhichthemovementsofthebusinessmenincontrolhavetardilyfolloweduptheopportunitiesforeconomyandefficientservicewhichtherailroadindustryhasoffered。
　　Andtheirlatestandboldestachievementsalongthisline，asseenfromthestandpointofmechanicaladvisability，havebeenforegoneconclusionssinceadatesofarinthepastastobeforgotten，andtakenattheirbesttheyfallshortto-daybynotlessthansomefiftypercent。oftheiropportunities。Cf。ReportoftheIndustrialCommission，vol。XIX。，“Transportation，“
　　especiallypp。304-348。
　　Likeothercompetitivebusiness，butmoreparticularlysuchbusinessashastodowiththeinterstitialadjustmentsoftheindustrialsystem，thebusinessofrailwayconsolidationisofthenatureofagame，inwhichtheendsoughtbytheplayersistheirownpecuniarygainandtowhichtheindustrialserviceabilityoftheoutcomeisincidentalonly。Thisisrecognizedbypopularopinionandismademuchofbypopularagitators，whotaketheviewthatwhenoncethegamebetweenthecompetingbusinessinterestshasbeenplayedtoafinish，inthedefinitivecoalitionofthecompetitorsunderonemanagement，thenthegamewillgoonasasomewhatone-sidedconflictbetweentheresultingmonopolyandthecommunityatlarge。
　　Soagain，asafurtherillustration，itisandfromtheoutsethasbeenevidentthattheiron-orebedsofnorthernWisconsin，Michigan，andMinnesotaought，industriallyspeaking，tohavebeenworkedasonecollectiveenterprise。Therearealsononebutbusinessreasonswhypracticallyalltheorebedsandironandsteelworksinthecountryarenotworkedasonecollectiveenterprise。Itisequallyevidentthatsuchcorrelationsofworkasarepermittedbythebusinesscoalitionsalreadyeffectedinthisfieldhaveresultedinagreateconomyofproduction，andthatthefailuretocarrythesecoalitionsfarthermeansanannualwasterunningupintothemillions。Boththeeconomiessoeffectedandthewastesoincurredaretobesetdowntotheaccountofthebusinessmannerswhohavegonesofarandhavefailedtogofarther。Thelikeisobviousasregardsmanyotherbranchesofindustryandgroupsofindustries。