This historic book may have numerous typos and missing text. Purchasers can usually download a free scanned copy of the original book (without typos) from the publisher. Not indexed. Not illustrated. 1901 edition. Excerpt: ... ence of that particular unit. If, then, the insuring capital, by virtue of its service in guaranteeing safety, increases the total product of the insured capital, the additional part must be attributed to the insuring capital as its product. If there were a monopoly of the privilege of granting insurance, the entire increase in product might be appropriated by the insurers. Perfect competition, on the other hand, would bring about an influx of capital into the insuring business which in the end would reduce the total return to capital in it to the same proportions as the return to capital in any other industry involving the same degree of risk. The remainder of the economic gain due to the existence of the institution of insurance would then accrue chiefly to the consumers of the commodities created in the industries in which the insured capital is employed. There is no fundamental difference in kind between the reward for risk-taking which accrues to capital employed directly in a hazardous enterprise and the reward which insuring capital obtains for the risk it assumes. In both cases there is an increased productivity of industry on account of the assumption of the risk, and in both cases the capital exposed to risk obtains a part of the increased product as its special reward. In both cases, moreover, the amount of the extra reward which capital can obtain by assuming risk is fixed by the sacrifice of the most reluctant investor whose capital is needed to meet the demands of society. The only difference between the two kinds of income is the comparatively unimportant one that in the former case the extra product is created directly by the capital that receives it, while in the latter case it is created by other capital and handed over...