DISTRIBUTION OF WEALTH 



reason why it should not be thought of as the hire 

 paid for the use of the capital-goods. 



The marginal farmer and the marginal capital- 

 goods must, on the long time average, be main- 

 tained, and the hire of the capital-goods must be 

 paid. As land which will not produce this much 

 will not be brought under cultivation, it is clearly 

 the return demanded by farmers for labor and the 

 use of capital-goods which determines the margin 

 of cultivation, and not the productivity of the 

 marginal land which determines the amount which 

 is paid for the use of capital-goods. But why is 

 it that more must be paid for the use of capital- 

 goods than sufficient to keep such goods intact? 

 In other words, why must a hire be paid for the 

 use of capital-goods ? 



First, the supply is limited. The supply can- 

 not be increased indefinitely without some sacri- 

 fice of the gratification of present desires. Men 

 are usually desirous of laying up something for 

 the future, but they are more concerned with the 

 gratification of present wants until the latter are 

 partially satisfied. That is; men value the means 

 of gratifying their present wants more highly than 

 they do the means of gratifying the wants of 

 of the future, and as a result, after saving has 

 reached a certain point, they will not refrain from 

 consuming wealth to-day in order that it may be 

 turned into capital-goods, unless they have the 

 assurance that a greater amount of wealth will be 



iS7 



