THE RENT AND VALUE OF FARM LAND 615 



endeavor ? In a word, how is the wealth produced hi the course of 

 our agricultural operations distributed to its joint producers ? 



The simple doctrine of rent as a differential return to superior land 

 or natural agents of production is readily grasped. This, however, is 

 hardly an adequate account of the matter, until technical produc- 

 tivity is translated into full economic, i.e., value, terms. Granted 

 that a tract of land possesses superior advantages of fertility, climate, 

 or location, what shall be the market price at which the service of 

 that land will sell? Evidently, the condition of the market for 

 various classes of products will be one important factor. Prospective 

 renters will contract to pay in proportion to what they expect to 

 realize from their use of the land. Professor Taylor has clearly 

 pointed out that that return will depend upon the character of the 

 farmer as well as upon the character of the land, and selection 196 

 suggests that the size of the producer's surplus out of which rent is 

 paid may be increased by hard work and cheap living as truly as by 

 skilful farming. Careful analysis of factors such as these will serve 

 to reveal the schedule of demand for land use. The natural condi- 

 tions of supply of land and natural resources were pretty fully set 

 forth in chapter in, and the circumstances which make of it an effective 

 supply have been discussed in chapters vi, viii, and x. These factors 

 in the making of the market price of land-use might profitably be 

 identified and classified from selection 203. 



Nice distinctions must be drawn between economic rent, which is 

 based on the idea of a "normal" return, and the commercial or 

 contract rent which we meet in our business dealings. Not alone 

 does commercial rent combine returns for the use of capital-goods 

 along with true rent in a single payment, but the character of the 

 renting contract is such as often to introduce conventional elements 

 into the price of land-use, which considerably distort the price- 

 making process. Section C furnishes numerous illustrations of this 

 point. 



Section D should be studied with considerable care, and this for 

 two reasons. First, an understanding of the process by which 

 economic rent becomes the basis of the valuation of land will save us 

 from getting the cart before the horse and attempting to explain the 

 high cost of living by the high cost of farm land. In the second place, 

 it should have the practical value of teaching the prospective buyer of 

 land how to analyze the factors which go to make up both the present 



