Essentials of Economic Theory: As Applied to Modern Problems of Industry and Public PolicyClark, John Bates
General
Essentials of Economic Theory: As Applied to Modern Problems of Industry and Public Policy
Clark, John Bates
Economics
_Indestructible Elements in the Soil._--Land in the economic sense is
indestructible because the natural effect of use is not to destroy it.
This does not mean that it is not physically possible to destroy land
to the extent of making it forever impracticable to use it in the ways
in which land is commonly utilized. Nature may do this by sinking it
beneath the ocean, and man can, if he will, do something akin to this;
but he does not naturally destroy what is truly land in the using. It
is impossible to use a plow, a spade, or a reaping machine without
injuring it and, in the end, wearing it out. It is also impossible to
draw the nutritive constituents out of the superficial loam and
convert them into crops without exhausting the supply of these sources
of fertility and so spoiling that which is commonly called the land,
though it is not so in the economic sense. What is really land in this
sense is not affected. Nitrates and phosphoric acid that lie in the
topmost stratum of the soil are among the destructible instruments of
agriculture. The supply of them has to be renewed, if cultivation is
continued, and they are therefore in the class with the plows, spades,
and reaping machines which also wear out. But whatever there is in the
soil that suffers no deterioration from any amount of use is the land
with which political economy has to deal.
_The Gross and the Net Rent of Land Identical._--As land does not wear
out and require renewal, all that it adds to the products of the labor
and capital that are used in connection with it may be taken by the
landlord as an income without reducing the amount of his property.
Whatever land produces at all is a net addition to the general income
of society.
_Net Rent of Artificial Instruments Smaller than Gross Rent._--It is
not safe, on the other hand, for the owner of buildings, tools, or
live stock to take for his own consumption all that these produce. If
he were to use up their gross produce as he gets it, he would find, in
due time, that a considerable part of his property had vanished. Such
instruments wear out and become worthless, and if no part of what they
produce is set aside as a sinking fund with which to purchase other
instruments to take their places, one whole genus of capital must go
altogether out of existence.
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