INSURANCE AND BUSINESS PROFIT.

The article comments on the theories suggested by economist Fredrick B. Hawley on the insurance and principles governing business risk and its profits. The author remarks that profit, in the strict sense, begins only when something comes to the entrepreneur over and above this disbursement and all others. Ultimate profits of this kind are realized in vast amounts here and there in the business world. In quantity they do not, in different cases, correspond to the degrees of risk encountered, but seem frequently to vary inversely as the dangers. The employer of capital must pay to the owner of it enough to offset the entire chance of personal harm that may befall the lender. This impending evil must be estimated according to recently discovered principles. The loss is not in fact pooled, but is borne by the one on whom, in the course of business, it falls. To that man the negative value of the risk is much greater than the above simple calculation would indicate. A large group of capitalists can carry the risk for about one per cent.