The

creased price there goes something like a corresponding increase in selling outlays, it will be true that competitive success will turn on resourceful salesmanship. And thus, more and more, enterprise comes to be a contest of wits in selling to consumers the costs of selling to them. It is to be recalled that these marketing activities embraced within the inclusive term salesmanship are not merely offensive in purpose and effect, as the necessary costs of getting a competitor's trade away from him, but are equally defensive, the necessary costs of keeping the trade that one has. They bid fair to grow with the passing years, as so far they have grown. rising costs of doing business are as much a commonplace with the retailers as with their critics. The fault is one of process rather than of persons. When manufacturers' and jobbers' costs are included with wholesalers' and retailers' costs as making up the aggregate outlays of sales departments and of separate enterprises of sale, it probably is not far wide of the truth to fix at 50 per cent of the consumers' price the charge competitively imposed for these intermediate activities. This percentage may easily be overlarge. Or, equally well it may run appreciably short of the truth. At best it must be not better than an average of averages. Actually it is something short of this.

In any case, so far as these intermediate charges have significance solely for competitive offense and defense, or are due to the excessive subdivision of the retail traffic, or to perplexities of brand and trademark, they are mainly, if not entirely, social wastes. Some of them - as, for example, the colossal ground rents which city merchandising explains and city merchandising pays may in no great part go to enhance marginal selling costs. But in the main, it is clear, the consumer must make good all sales charges. Merchandisers' rivalries

being rather competitions for clientele than competitions in prices, the process tends rather toward larger than smaller expense loadings. It pays to advertise formulates in familiar terms a truth of wide competitive application.

It is, however, in its distributive aspects that the development of salesmanship comes to be of especial illustrative interest for the theory of wages. Salesmen are paid salaries on precisely the same basis of business policy as mechanics and artisans are paid wages. Directly, all are distributees out of the particular fund of the employer's receipts, indirectly, distributees out of the great fund of the aggregate social dividend, their remunerations equally and under the same title cost outlays incurred by the entrepreneur as means to his ends of individual gain. Each is therefore productive to the entrepreneur. For all of his purposes, and therefore for all of his distributed remunerations, no distinction exists between industry and business or between mechanic and salesmen. He pays for either accordingly as he must in achieving his purposes of gain. Thus it comes about that merchandising and salesmanship, as particular items in the general competitive process, afford an effective illustration of a wide range of forces and influences bearing in the actual competitive process either to limit the fund of products out of which laborers in general can be paid or, in addition, to diminish their relative shares out of this aggregate product.

If, then, more and more in business policy, the sales process tends to overshadow and to displace the mechanical process the selling activity to acquire importance as against industrial activity, business investment flowing into salesmanship rather than into

technical processes, the science of advertising acquiring an importance surpassing that of technology, skill in selling things taking precedence of skill in making things - it must follow that for artisans and mechanics there is a narrowing demand, in precisely the measure that the demand is widening for other abilities and activities better suited to the business purpose. Out of the price at which the consumers buy the goods, a diminishing share is therefore allotted to the factory process, for distribution to the artisan laborer. The pay-roll is the scantier for the mechanic as a more generous share of it is appointed to the advertising expert and the commercial traveler. The wage fund for one class of laborers is diminished to the advantage of a substitute and competing class. Investment forsakes the mechanical and industrial field for fields of greater return. The place and wage of industrial labor are, in some sort, a residuum available only after other and more important matters of the play have been considered.

But this is not the entire case. Any labor, wasteful or parasitic under the test of social serviceability, participates in the distributive process with no corresponding contribution to the social dividend. So far, then, all distributive shares, wages with the rest, may be assumed to suffer. But the salesmanship function holds the competitive, the substitute, relation to all mechanical and industrial functions. From the point of view of any particular industry, doubtless, the factory process and the sales process are complementary. Each must be if the other is. The goods must find a market else they cannot be made. But this is only competitively true true for each particular industry in the rivalries of business. It does not hold of production taken in the aggregate. From the collective point of view, these processes of ornamentation, display, advertising and solicitation

displace the mechanical and industrial processes. Not more mechanical and artisan labor is applied because of marketing activities, but less.

In the aggregate, therefore, all gainful ways of employing labor that are not also socially productive are waste and nothing more; the social dividend suffers with no diminution in the number of claimants against it. But in the competitive process the distribution of the diminished product is also modified. The increased emphasis for gain-getting purposes on the activities displacing mechanical and industrial labor, redistributes the total share to be allotted to the labor factor to the marked disadvantage of artisan wages. There is, that is to say, a distributive change in the relative shares allotted to the different grades and varieties of labor, a redistribution within the labor group. As the substitute and competing laborers get more, the artisans and mechanics get less. Not merely do these last share in the loss attending a diminished social income of concrete things, but also they are subjected to a disproportionate share of the loss. They are the chief sufferers through the entire process the distributary legatees of the

cumulative deficit.

All this is not so much a novelty in distributive theory as, in the main, merely a neglected application of principles long established. Where certain of the factors in a joint process are becoming more expensive the others suffer. Those becoming relatively plenty become also relatively cheap. But it has not been quite clearly recognized that in the processes of competitive rivalry, and by the standards of these processes, there are other than mechanical and industrial factors. There are business factors, equally productive by the test of gain. Advertising, for example, is such a factor. Salesmanship in the large is a group of such factors.

Thus it must be recognized that all parasitisms, predations and wastes bear adversely on the distributive process in the large, because they bear adversely on the total of goods to be distributed. Incomes have, then, to suffer in the average, wages with the rest. But some of these adverse influences bear in especial degree on wage earners in the spending of their incomes. Others impose in addition on a particular class of laborers, the artisan and mechanic class, certain peculiar distributive disadvantages. The theory of wages needs in general, then, supplementation to take account of the difference between competitive acquisition and social production. It needs to take special account of the peculiar bearing of certain gainseeking activities on the wages of artisan and industrial laborers, not merely (1) in what their dollars will buy after they are collected, but (2) on the number of dollars that are received.

H. J. DAVENPORT.

CORNELL UNIVERSITY.