The everyday circumstances which condition the modern business management of industry arfe sufficiently well known, and they have abeady been reviewed in some detail in earlier chapters ; [but they may perhaps advantageously be outlined I again in so far as they bear immediately on the question in baud,
(1) Industry is carried on by means of investment, which is made with a. view to pecuniary gain (the earnings). The business man's endeavors in managing the affairs of the concern in which investment has been made look to the same end. The gains are kept account of as a percentage on the investment, and both they and the industrial plant or process through the management of which they are procured are counted in terms of money, and, indeed, in no other terms. The plant or process (or the investment, whatever form it takes) is capitalized on the basis of the gains which accrue
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THE THEORY OF MODERN WELFARE 187
from it, and this capitalization proceeds on the ground afforded by the current rate of interest, weighted by consideration of any prospective change in the eaming-capacity of the concern. The management of the concern is effected by a more or leas intricate and multifarious sequence of bargains. The decisive consideration at every point in this traffic of investment and administration is the consideration of price in one relation or another.
(2) The industry to which the business men in this way resort as the ways and means of gain is of the nature of a mechanical process, or it is some employment {as commerce or banking) that is closely bound up with the