4 INTRODUCTION 



the more noteworthy that they have arrived at much the same con- 

 clusion as did the early Americans, who could see nothing else. Both 

 tend to eliminate the distinction between land and capital. 



This raises the whole question of the "surplus" concept, which is 

 the keynote of so much of economic theory. From the physiocrats 

 to Carver and Taylor, through classic and neo-classic lines of descent, 

 there has been a school which views surplusness as an attribute of the 

 land. The Socialists, on the other hand, were concerned with a sur- 

 plus attributable to labor. And modern industrial economics inclines 

 to identify the idea of a surplus with the function of entrepreneurship 

 and to believe that such surplus goes inevitably to the controller of 

 capital, whether the form of capital be land or other instruments of 

 production. 



We have already noticed that this first idea has persisted from 

 the most ancient to the most recent discussions of the economics of 

 agriculture. Entrepreneurship as such is not an idea which has been 

 very largely developed in connection with rural enterprise, but it is 

 probable that the modern farmer who views his payments for rent 

 or land purchase in the same light that he does his outlays for other 

 productive goods comes to identify, at least vaguely, his chance of 

 securing profits with his ability to control capital. If one now' has to 

 pay two hundred dollars an acre in order to get a farm and benefit 

 from the extraordinary profits that accrue by reason of the outbreak 

 of the European war or the rise in the cost of living, it is evident that 

 the entrepreneur gains in agriculture are indeed a function of the 

 control of capital. But when one could take up a homestead gratis 

 from the government, the essential prerequisite to entrepreneurship 

 was evidently not the control of capital, but the ability to endure 

 hard work and privation and to bear many children. Since, however, 

 these are personal qualities, their possessor commonly regarded all 

 his income as the return to labor. In fact, it has been characteristic 

 of our farmer folk that they have never formed the habit of thought 

 which imputes some part of the total product to factors of production 

 other than labor. Where they ha\e created a value upon raw land 

 and secured capital by a process of saving rather than by borrowing, 

 the productive power so added has appeared hardly less personal than 

 physical strength, native shrewdness, or an acquired education. 

 When, after a generation or more of such conditions, mm- ownership 

 of land and capital passes over to non-resident hands, while the actual 

 productive operations remain in the hands of the farmer, have we not 



