1. Especially since the distribution of all profits is in force, the returns on capital fluctuate from year to year.
This occurs without a downward trend in the average return on capital over a long period (several generations). The issue of divergent trends that normally affect the average return on capital and the average profitability of sales of firms is discussed in the next chapter.
2. These fluctuations better regulate employment and the prices at which firms sell when the publication of average annual rates of profit on capital is part of the system of weights and measures.
The next chapter explains it for employment, and more in Chapter 11 for the prices at which firms sell.
3. The rate of return of hospitals (which are all, in fact, enterprises) chronically lower than that of the pharmaceutical industry has harmful effects, as well as the rate of return of farms chronically lower than that of car manufacturers, etc.
On the one hand, sectoral returns on capital, which are significantly lower than the national average, threaten jobs and compress incomes when they are significantly lower than the national average. On the other hand, sectoral returns on capital, which are significantly higher than the national average, indicate higher margins, contrary to what would generally be produced by a better organization of competition.
4. All commercial enterprises compete in the market for their permanent financing.
The general organization of competition remains too incomplete if, enterprise by enterprise, the rates of profit on capital are part of the business secret and if the average return on capital by sector of activity is a blind spot in the statistical apparatus.
5. An additional consideration is even more decisive.
Suppose a country where enterprises are divided into two sectors. The average return on capital in sector 1 is 4%, in sector 2 12%, in these two sectors combined 7%. If the average return of sector 2 is lowered to this average, i.e. from 12% to 7%, this sector remains attractive for savings in capital. If, at the same time, the average return of sector 1 is raised to the average of 7%, this sector becomes more attractive for savings in capital. In the end, more capital becomes available as the equalization of sectoral return progresses. An algebraic calculation shows that what applies in this respect to two sectors applies to as many sectors as it is necessary today to distinguish between them in the country in question. Hence the following generalization:
6. The reduction in the dispersion of sectoral profit-on-capital rates promotes the growth of the national capital stock.
This is one of the major reasons why the organization of the publication of the average rates of profit on capital is at the forefront of the economic duties of the public authorities.