322 PRINCIPLES OF RURAL ECONOMICS 



That part of a farmer's income which is due to his ability to 

 reduce his risk by his superior skill in guessing at the weather 

 and the probable conditions of the market is closely akin to his 

 wages of superintendence and might almost as well be placed un- 

 der that head as under profits. But inasmuch as it is so closely 

 related to the function of risk taking, it seems better, on the 

 whole, to include it under the latter head. It is the peculiar 

 reward of the speculator, in the better meaning of that term, 

 whose special skill, if he has any, consists in knowing better 

 than others when to buy and when to sell. Every farmer is a 

 speculator in the sense of being compelled to make expenditures 

 in advance when it is uncertain what the crops or the market 

 will be, and he is the one who gains or loses by such transac- 

 tions. In so far as this is a necessary part of every business, 

 including that of farming, the income secured by special skill 

 in this direction must be regarded as earned. 



Speculation in the purely commercial sense, which consists 

 simply in buying things when they are believed to be cheap and 

 holding them for a rise, without any industrial purpose whatever, 

 is not a wholly barren function, though there are few communi- 

 ties in which it is not overdone. Wherever it is necessary that 

 goods should be produced a long time in advance of their con- 

 sumption, it is also necessary that some one should hold them 

 during the interval. This consists not only in housing or storing 

 them, but also in waiting to get the value out of them, or to get 

 one's money back, as it is sometimes expressed ; and waiting, as 

 we saw in the discussion of interest, is burdensome when carried 

 too far. The producer must wait a long time for his reward, 

 or the consumer must buy a long time in advance of his needs, 

 unless some one else will come forward and relieve them both of 

 the necessity of waiting by buying the products of the producer 

 when they are produced and holding them for the consumer 

 until he needs them. The reward for waiting is interest, but in 



