290 PRINCIPLES OF RURAL ECONOMICS 



I. WAGES 



The wages of a farmer who does all or a part of his own 

 work may be considered to be the amount which he saves in 

 his wage bill by reason of the fact that he works himself. The 

 rent of a farmer who owns all or a part of his land may be con- 

 sidered to be that amount which he saves in his rent bill by 

 reason of the fact that he is using his own land ; and the inter- 

 est of a farmer who owns a part or all of his capital free from 

 debt, as that amount which he saves in his interest charges by 

 reason of the fact that he uses his own capital. Another way of 

 stating the same thing is to say that such a farmer's wages are 

 the amount that he could get by hiring out to some one else, 

 that his rent is what he might get by renting his land to some 

 one else, and that his interest is what he might get by lending 

 his capital to some one else. If, when he adds these sums to- 

 gether, he finds that they exceed his actual average income, then 

 he is making no profit, but is sustaining a loss instead. In that 

 case he would do better at least he would make more money 

 if he would rent his land, lend his capital, and hire out to 

 some one else. But if he finds that his average total income ex- 

 ceeds the sum of these three special incomes, then he is making 

 a profit as a farm manager, that is, as an independent farmer. 



Value. The problems of wages, of rent, and of interest are 

 special phases of the general problem of exchange value and 

 price. A concrete individual article, such as an egg, a loaf of 

 bread, a horse, etc., has value 1 only because it is wanted ; and 

 the more it is wanted in comparison with other things, the 

 more value it will have ; that is, the more of these other things 

 will be given in exchange for it. Other things equal, if there are 

 available a great many other eggs besides the one in question, 



1 In this discussion exchange value is always to be understood when the 

 word " value " is used. 



