quantity of ground, or at least space,48 is limited, not capable of being increased by human effort.
From this property flow most of the general theories relating to the landlord's share in
distribution,—that a tax on rent (proper) falls wholly on the land, that the remission of agricultural
rent by landlords would not benefit the consumer,49 and other propositions often connected with the
formula that “ rent does not enter into the cost of production.” Some remarks on that time-honoured
formula seem called for here. It would not be consistent to have complained of the expression that
“the entrepreneur makes no gain” as perplexing and apt to mislead, however innocently used by high
authorities, and to pass over in silence this dictum about rent, against which and in favour of which
much the same is to be said. Certainly, it is supported by very high authority,— the authority not
only of Ricardo and Professor Marshall, but also of Hume, who in the letter which he wrote to Adam
Smith on the publication of The Wealth of Nations (the letter which, written a few months before
Hume's death, may be considered his economic testament) says, “I cannot think that the rent of farms
makes any part of the price of the produce, but that the price is determined altogether by the quantity
and the demand.”50 On the other hand, it can hardly be denied that the dictum in question is
calculated to obscure the truth that “land is but a particular form of capital from the point of view
of the individual manufacturer or cultivator”;51 that, as he doses land with capital and labour, so he
doses capital and labour with land,52 up to a margin of profitableness. And, in fact, the similarity of
the factors of production from the entrepreneur's point of view does not seem to have been
apprehended in all its generality by the classical writers. Thus Fawcett, who may be taken as a type,
when explaining rent seems to posit the size of the farm as something fixed and constant.53 J. S. Mill
48. Cp. Marshall on “extension” as the “fundamental attribute of land.” Principles of Economics,
Book IV, chap. ii. p. 221 et seq., 4th edition. Not even the enterprise of Boston, which converted
marshes into the site of noble streets, can form an exception to the law so stated. But the more
familiar statement is accurate enough. For, as Professor Bullock has said (at the banquet of the
Massachusetts Single Tax League, 1902), “it may be safely contended that the additions which man
can make to the land surface of the globe are so small as to be a negligible quantity when we
compare land with the things that human labour places upon it.”
49. The received proposition is of the nature of a first approximation, as pointed out in II 76. When
the writer there observed that “there might be now required a higher rate of remuneration to evoke
the same exertion from the cultivator,” et seq., he was not aware that he had been anticipated by the
very first writer who stated the true theory of rent, James Anderson, who says that the only
consequence of remitting rents “would be the enriching one class of farmers at the expense of their
proprietors, without producing the smallest benefit to the consumers of grain,—perhaps the reverse,
as the industry of the farmer might be slackened.” Enquiry into the nature of the Corn-laws (1777),
p. 48, note.
50. Burton's Life of Hume, Vol. II, p. 486.
51. Marshall, Principles of Economics, Book V, chap. ii, §5.
52. The propriety of reversing the classical formula so as to make dose and patient change places
is well expressed by Mr. Wicksteed, Laws of Distribution, p. 20.
53. Manual of Political Economy, Book III, chap. iii.