John T. Tetley
[Reprinted from The Gargoyle, May 1976]
Of natural laws, the one most widely known is the law of gravity.
Another is "matter in motion seeks the line of least resistance."
As applied to man, we observe "man seeks to satisfy his desires
with the least exertion."
Understanding this natural law may aid us in ascertaining the lower
limits of sharing the product among the owners of the factors of
production. The owners of human exertion, the owner of natural
resources both wish to get as much as they can, as does the owner of
tools. For the purpose of illustration, let us assume an area of
farmland. We will assume that it is the best farm land available and
with a given amount of exertion fifty bushels of wheat may be
produced. On the next best grade of land, with the same exertion only
40 bushels can be produced, and on the next best land, only 30 bushels
of wheat. Then 20, 10 and land on which no wheat can be grown.
Production also applies to a location used for retail business. At
the poorest location, let us say but one pair of shoes per day can be
sold. At the next better location, five pair, at the next ten, and so
on until at the best location 25 pair a day -- all with the same
amount of energy exerted.
.1 The differential -- the excess productivity over the least
productive, is the basis of establishing the natural minimum share of
the product which the owner of natural resources may demand.
When only the two factors of production, natural resources and human
energy are involved it is evident that whatever portion of the product
goes to the owner of natural resources, the balance goes to the owner
of human energy. Or, to reverse, the situation, if the owner of
natural resources wishes to have a person use and pay for such natural
resources he must accept what the owner of human energy will pay,
which will be determined by-what can be obtained working at the
margin. The margin is the point of highest productivity without the
payment for the use of natural resources.
This is the underlying basic. There must always be considered the
demand for and supply of, natural resources, and human energy, At any
given time and place. Other factors also enter into the final
determination of the share of the product going to each of the owners,
but it should be evident that there are underlying natural
Natural laws may not be violated with impunity. Ignore them and
suffer the consequences. Comply with them, with harmonious results.
When tools and machines are used their owners either rent or sell
them to the users. The users are the ones who exert human energy and
they are willing to pay for the tools because by using them production
is increased. The price which will be paid depends upon the supply of
and demand for the tools and machines at a given time and place.
A portion of the product is claimed by the owner of natural
resources, a portion by the exerter of energy, and as mentioned, a
portion by owner of tools, if used. It is evident that if any one
factor receives a larger share, one or both of the other factors must
receive lesser shares.
Since the share owner of tools is governed solely by supply and
demand and if because of high demand and low supply, supply will
increase, thus tending to keep the "share" at a "fair"
level, we may consider it, usually satisfactory to borrower and
It is natural for the exerter of energy to want as much of the
product as he can obtain, and if by working harder, or longer, he can
obtain more this seems fair and reasonable, that he receive more.
Those who hold a legal title to Natural Resources endeavor to obtain
as large a share of the product as they can for granting access to the
resources. In many instances they are able to obtain a large share
since it is absolutely necessary to have access to natural resources
in order to produce. Also owners of Natural Resources are able to hold
them out of production, thus increasing the portion of product which
must be paid by those who do use Natural Resources.
It is possible to change the administration of allocation of Natural
Resources to a system which would accord with natural law, prevent
holding them out of use, and equalize opportunity in production.
This is quite a different concept than exists at present and while
comparatively simple, does require quite some study to grasp its
However, under such a system, the owners of human exertion would
receive the full return for exertion, for they would use such
resources as they could best pay for, with those using the less
desirable resources, being reimbursed for surrendering their equal
rights for the better.
BUT-- that is NOT THE WAY IT IS.