206 PRINCIPLES OF RURAL ECONOMICS 



from a social or political angle, land differs from capital in 

 several important particulars. In the first place, land is a natural 

 product, whereas capital that is, tools, buildings, etc. is 

 a product of human labor. In the second place, the supply 

 of land is practically fixed, whereas capital can be indefinitely 

 increased or diminished. In the third place, since the sup- 

 ply is practically fixed, but the demand not, there is no con- 

 ceivable limit to the price or the rent of land. If the popula- 

 tion and the demand for land increase sufficiently, fabulous 

 prices may be and are paid for land. But since the supply 

 of any form of capital is not fixed, but can be indefinitely in- 

 creased, there is a pretty definite limit to the price which any 

 piece of capital can bring. If the demand increases and the 

 price rises, the supply can increase to meet the demand and 

 check a further rise in price. 



From the standpoint of the agricultural economist it is par- 

 ticularly important to keep clearly in mind the distinction be- 

 tween land and capital. The agricultural land of the country is 

 a free gift of nature, but the tools and equipment necessary to 

 utilize' that land to the best advantage come only by forethought, 

 abstinence, and labor. Capital never comes into existence of 

 itself. It is always the result of human effort. The initial act 

 in the creation of capital is one of choosing to wait, that is, to 

 wait longer than would otherwise be necessary before satisfying 

 one's desire for consumers' goods. This waiting may be done 

 in a multitude of ways.* Having earned a dollar, one may either 

 spend it for consumption or use it in a way which will not in- 

 crease his present consumption but will increase his future in- 

 come. In the latter case one becomes a capitalist to the extent 

 of a dollar. If one buys a tool, or a pig, or any other object 

 which will increase his future earnings, he has increased the 

 future productive power of the whole community, because he is 

 a part of the community ; that is to say, by offering to pay a 



