The basic facts of economics : $b A common-sense primer for advanced studentsPost, Louis F. (Louis Freeland)
General
The basic facts of economics : $b A common-sense primer for advanced students
Post, Louis F. (Louis Freeland)
Economics
In a vast variety of special instances, such as those used above for
illustrative purposes, Rent exacts from the flow of Wealth a continuous
allocation which depends for its proportions to the aggregate flow
upon the desirability of different qualities and locations of Land (as
the Natural Resource factor in the production of Wealth) relatively to
the desirability of such qualities and locations as may be had for the
taking.
“The rent for any piece of land,” writes Max Hirsch, the Australian
economist,[8] “is determined by the excess of its productivity over
that of an equal area of the least desirable land in use, after the sum
of exertions which in both cases yield the most profitable result has
been deducted.”
[8] Page 127 of “Democracy vs. Socialism.”
All such exactions are phenomena of natural Economic law. Land exists
in quantities to which Nature assigns impassable limits, and this
limited supply of Land varies in fertility and in desirability of
location. He who produces from and upon better grades will naturally
achieve greater or better results with the same expenditure of Labor
than he who produces from poorer grades. This difference is measureable
by variations in the productive grades of Land, from nothing in excess
of production cost on the lower side of the Margin of Production--the
poorest in demand, the Economic frontier--to something in excess of
production cost on the higher side of the Margin, the hither side of
the Economic frontier, and to more and more for higher and higher
grades up to the best.
It should be observed in this connection that the Margin of Production,
the Economic frontier, is not a surveyor’s line, like the boundaries of
a farm or a county or a State. It is a term for an Economic difference,
from lower to higher degree in the desirability of particular Natural
Resources though they be separated by long distances or short ones.
Nor need the intervening space recede from highest to lowest by
geographical degrees, or relative desirability depend upon richness of
soil or mineral deposits.
Trading opportunities may do much to determine the Margin. A rich
gold deposit beyond the reach of trading possibilities lies below the
Margin, for it cannot be utilized. A farm twenty miles away from a
trading center would be nearer the Margin than one two miles away, even
though the two farms were equally productive, because the marketing
costs would affect the Value of the product prejudicially. Space for
a building-site a hundred and fifty feet from the nearest street line
would be nearer the Margin than one fronting on the street.
Public-domain text, read in full here on John Shaqi.
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