620 AGRICULTURAL ECONOMICS 



capital. The same language should be applied to land. Labor on 

 some land yields more than labor applied on other land; in this sense 

 only is there a productivity of land. If land were unlimited in supply 

 and all of uniform quality, the natural forces inherent in it would still 

 be directed and utilized by labor; and in this sense there would be a 

 productivity of land. But there would be no differential return on 

 any one plot of land, no emergence of rent, no notion of a separate 

 productivity of land leading to rent. Rent arises because of the 

 limitation of the better sources of supply; because of differences in 

 the amounts brought forth by equal quantities of labor. 



Such is the fundamental principle of rent. But it requires many 

 qualifications concerning the kinds and causes of difference in pro- 

 ductive efficiency. Unless there were a tendency to diminishing 

 returns from any one plot of land, there would be no such thing as 

 rent. If the better sources of supply could be pushed indefinitely 

 without any lessening of yield if more and more labor and capital 

 could be applied to a given plot of land, and could always bring an 

 increase of product proportionate to the additional outlay then those 

 better sources of supply only would be resorted to. The less good 

 lands would be left untouched, and all agricultural produce would 

 be got from the best lands. The fact that good lands, mediocre lands, 

 and poor lands are cultivated side by side, proves that at some stage 

 a tendency to diminishing returns appears. 



When additional labor and capital are applied to cultivation, it 

 may be a matter of indifference whether they be applied to poorer 

 land or to the better land under poorer conditions. In the preceding 

 discussion, three grades of land were assumed, having yields, for the 

 same application of labor and capital, of 24, 20, and 15 bushels to 

 the acre. But it might also be supposed that the three applications 

 of labor and capital were all made on the same land, yielding succes- 

 sively diminishing returns in the ratio of 25, 20, 15. In either case, 

 the marginal product is 15. In either case, the 15 bushels constitut- 

 ing the last instalment will not be brought to market unless the price 

 is such as to make their production worth while; hence, in either case, 

 the other instalments bring a surplus or rent. In either case, the 

 margin of cultivation is that stage in production where only the normal 

 returns to labor and capital are secured. The margin is said to be 

 extensive when poorer land is resorted to; it is said to be intensive 

 when more capital and labor are applied under less favorable condi- 

 tions to the better land. Difference in yield would appear, and hence 



