THE GRADES OF THE FACTORS OF PRODUCTION 127 



most efficient factors together. The productivity of the in- 

 efficient is minimized, it is true, but the productivity of the 

 most efficient is at the maximum, and the total product, it is 

 believed, is greater than any other combination would yield. 

 True social economy calls for this combination, and it is these 

 facts of variation in efficiency which give hope that competition 

 may gradually lift the average of efficiency by the elimination 

 of the marginal and the multiplication of the better and the 

 best. So long as this process is in operation poorhouses will 

 be needed, but is it not cheaper to provide for the inefficient 

 in this way than to have them match their inefficiency with 

 land and equipments which have high potential productivity ? 



Variations in efficiency and capacity have an important rela- 

 tion to the problems of the distribution of wealth, with especial 

 reference to the ownership of land. It is the wide range in the 

 efficiency and the capacity of farmers that makes possible the 

 saving of the funds essential to the climbing of the agricultural 

 ladder. Assuming the acceptance of the theory of the relation 

 of prices of agricultural products and marginal costs, it follows 

 that every man possessing efficiency superior to that of the 

 marginal farmer may save from the surplus and rise to a higher 

 rung on the agricultural ladder. It would seem also that the 

 man of high capacity may save more than his competitor of 

 equal efficiency who possesses lower capacity on the assumption 

 that the man of high capacity has the same standard of living as 

 his competitors. 



It is not so much the purpose here to show how these factors 

 have worked themselves out as it is to show the individual 

 farmer how better to adjust himself to his complex environment, 

 and to call the attention of the agrarian statesman to this fact 

 of variations which are too often overlooked because it is easier 

 to deal with the average, which is often a dangerous basis for 

 practical legislation. From a political point of view this fact 

 of variation gives basis for aid in education and for poor relief. 



In choosing a farm the grade of land selected should correspond 

 to the degree of efficiency of the farmer. A highly efficient 

 farmer can make some profit on any grade of land. On the 



