572 TRANSACTIONS OF SECTION Fy 
that the whole argument is quite independent of the carefully drawn distinc- 
tion between economic and commercial rent, or between Jand and capital sunk 
in land. But we must go on to still more important matters. 1t will be 
noticed that when we now speak of the ‘marginal’ increment, we are using the 
word in the sense of a ‘ differential,’ as employed throughout our own investiga- 
tion. It is not any peculiarity of the ‘marginal’ increment that makes it 
yield less than the others. It does not. They all have exactly the same 
differential effect on the yield, as to which none is after or afore the other. 
The height of this differential or marginal yield is dependent not upon the 
nature of each several dose, but upon their common ‘ quotality.’ What we have 
here, then, is not a law or theory of rent at all, but the tacit assumption that 
the differential theory of distribution is true of every factor of production 
except land, and that rent is what is left after everything that is not rent is 
taken away. For observe, land-and-labour is treated as a homogeneous quantity, 
so that the reduction of heterogeneous factors to a common unit is assumed, and 
how is this to be done except by comparing their several efficiencies on the 
product, and so combining them as to keep those efficiencies in differential 
equivalence to their market prices, i.e., their efficiencies on other land or in 
other industries? And thus the principle of marginal or differential efficiency 
as determining distributive share in the product has long been quite definitely, 
though naively and unconsciously, asserted in saying that the ‘ marginal ’—in 
the sense of ‘ quotal’—efficiency of this compound factor of production, in the 
specified industry and out of it, will find the same level and will determine its 
remuneration. 
This so-called statement of the law of rent, then, assumes our differential 
laws of exchange value and distribution, with all their implications, as ruling 
everywhere except in land and rent. As to rent it is, as we have observed, what 
is left when everything except rent is taken away. This can hardly be called 
a ‘law,’ but, such as it is, it is again common to all factors of production. 
Wages are all that is left when everything that is not wages is taken out. 
ae this is actually the statement of Walker’s ‘law of wages.’ And so with 
the rest. 
But this is not all. In the treatment of rent that we are examining the 
differential theory of distribution is avowed with respect to every factor except 
land; but it is implied with respect to land also. This can be rigidly proved 
mathematically, as is now beginning to be acknowledged; and even the non- 
mathematical student can easily perceive that the forms of the figures repre- 
senting the shares of ‘land’ and ‘labour-and-capital’ respectively are deter- 
mined not by any peculiarity of land, but by the fact that land is supposed to 
remain constant, while labour-and-capital vary. But three pounds sterling 
applied to one acre is the same thing as a third of an acre coming under one 
pound’s worth of culture, and five pounds per acre is a fifth of an acre per 
pound. Instead of taking an acre, therefore, and considering the difference of 
yield as two, three, four, five pounds are expended upon it, let us take one pound 
and consider the differences of yield as one-fifth, one-fourth, one-third, one-half 
of an acre come under it, or, in other words, as it spreads itself over these 
different areas. You will then find that you have a figure in which the 
same identical data are presented and the same identical results obtained, but 
the return to land is represented as a rectangle cut off by a line parallel to 
OX, and the return to labour-and-capital by a curvilinear ‘surplus’ or residuum. 
So that the supposed law of rent again turns out, in so far as it is true of land, 
to be true of all the other factors of production; but the unhappy confusion 
between the geometric properties of an arbitrarily selected constant factor in 
a diagram and the economic properties of land has brought dire confusion into 
economic thought and economic terminology. The Augean stables must be 
cleansed. We must understand that when the differential distribution is effected 
there is no surplus or residuum at all; and that any diagram of distribution 
that represents the shares of the different factors under different geometrical 
forms is sure to be misleading, and is likely to be particularly mischievous in 
its misdirection of social imagination and aspiration. 
My last illustration shall be drawn from the dictum that rent does not enter 
into the cost of production. The value of all factors of production is derivative 
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