Page "Nassau William Senior" Paragraph 33

Besides adopting some terms, such as that of natural agents, from Say, Senior introduced the word abstinence which, though obviously not free from objection, is for some purposes useful to express the conduct of the capitalist which is remunerated by interest ; but in defining cost of production as the sum of labor and abstinence necessary to production he does not seem to see that an amount of labor and an amount of abstinence are disparate, and do not admit of reduction to a common quantitative standard.

He added some important considerations to what had been said by Adam Smith on the division of labor.

He distinguishes usefully between the rate of wages and the price of labor.

But in seeking to determine the law of wages he falls into the error of assuming a determinate wage-fund, and states as an economic truth what is only an identical proposition in arithmetic.