342 READINGS IN RURAL ECONOMICS 



invested he can retain what is left as wages. Hence, when a man 

 farms where land is free, the aim will be to extend the use of a 

 given amount of labor and capital over a large area, no additional 

 expense being thereby added in the form of rent. The farmer 

 will select the area from which his labor and capital can get the 

 product of the largest total value possible. He will therefore adopt 

 an extensive kind of farming, such as wheat-growing. As soon, 

 however, as the land acquires a value, thus involving a definite 

 expense per acre (regardless of the value of the product), the 

 farmer finds it necessary to direct his farming so as to get a larger 

 return per acre. 



Whether the extensive or intensive kind of farming is the more 

 profitable is thus seen to depend, from the standpoint of an indi- 

 vidual farmer, upon the price of the land. The rise or fall in the 

 price of the land depends partly upon the use to which it can be 

 devoted. If one man uses a given area for wheat-raising and some 

 one else thinks he can farm the same area more intensively and 

 realize a larger net return per acre, the latter will be in a position 

 to offer a larger price for the land than the former can afford to 

 pay or to hold it at if he is the owner. In this way the wheat 

 farmer will be " crowded out " from the higher-priced land or he 

 will change to a more intensive kind of farming. 



The question may now be asked. If a farmer can make more 

 money by intensive cultivation on high-priced land, why can he 

 not do the same with the more intensive cultivation on cheaper 

 lands, and thus crowd out the wheat industry entirely .' The 

 answer has already been suggested. The farmer wants to realize 

 as much value as possible. If by raising corn he can cover only 50 

 acres in a season, while by raising wheat he can handle 200 acres 

 with the same labor and capital, he figures up which will give in 

 return the largest amount of value over and above expenses, and 

 decides his plan of farming accordingly. Where land is free or 

 reasonably cheap, the more extensive farming will give the largest 

 net returns and such farming as wheat-raising will pay best. 



We thus see that, while the demand for land and therefore its 

 price are determined partly by the use to which it can be devoted 

 and partly by the general social conditions of the time and place, 



