RENTS AND PROFITS 1 99 



thus get ahead in the world, i.e. " the iron law of wages " operates 

 only for the marginal farmer. Third : the farmer can make use 

 of the highest degree of skill and knowledge without fear that the 

 landlord will be able to take, in the form of a higher rent, all of 

 the extra product due to more efficient management. 



Thus far rent and profits have been considered at a given time 

 with a given supply of land, equipments, laborers, and farmers, 

 and a given market condition. It is well recognized that with 

 the passing of time, the relative abundance of the factors of 

 production changes, market conditions change, and the degree 

 of skill and knowledge changes, resulting in changes in the 

 amount of rent paid for a given piece of land. 



With the growth of population a double effect on rent tends 

 to follow: First, increased demands for produce increase the 

 price of the products so that the rent measured in terms of money 

 will rise even though the share of the product going to land 

 remains the same. Then again the growth of population and 

 the resulting increase in competition for the use of the land 

 tends to make people willing to take up land formerly considered 

 too poor to make it worth while to cultivate it, but before 

 taking this inferior land they will bid higher for the land 

 already in cultivation and this will result in an increase in 

 the proportion of the product paid for the use of land. On 

 the other hand, improvements in the means of transportation 

 which will result in an increase in the supply of good farm 

 land more rapidly than the farm workers increase will tend to 

 reduce the share of the product paid for the use of the land. 

 This was true during the period following the extension of rail- 

 ways into the prairies of the North Central States. The general 

 principle is that with changes in the relative abundance of land, 

 labor, and capital, the most slowly increasing factor is in a posi- 

 tion under conditions of free competition to command an in- 

 creasing proportion of the product. 



The withdrawal of large numbers of farm workers from 

 agriculture in case of great national emergencies like the world 

 war will tend to increase the proportion going to the human 

 factor and reduce the proportion if not the amount of rent. 



