Page:Property and Improperty.djvu/213



ism as a modern economic doctrine is in its origin an application of the so-called Law of Diminishing Returns first applied to the use of land as a factor of production. Where there is plenty of land of varying grades of quality available for agricultural use, the worst land in use will, with a given application of labour and capital, produce just enough to pay its way, on a no-rent basis, at a given price-level for its product. If prices rise, it will be worth while lowering the margin so as to take in land that it would not have paid to cultivate before: if prices fall the hitherto marginal land will pass out of cultivation. So far as land is regarded as only applicable to some single agricultural use, the logic of this statement is irrefutable. But it applies, not merely to land, but to workers and to capital in the concrete form of plant and materials. There are