Does Marginal or No-rent Land Really Exist?
One would think that such a land cannot exist Everybody will be keen on having such a land so that the owner may be in a position to demand some rent for it. But this is a superficial view. No rent land does really exist. The whole of the payment as rent for the use of land may be due to investment of capital, i.e interest. The land itself may be such as not to yield any surplus at all. For example. there may be some waste land lying useless and nobody may be willing to pay anything for its use. But a prospective-tenant may agree to pay something. If the owner sinks a well there. Obviously. the well and not for the land which is really a no-rent land. Sometimes, the existence of no-rent land is concealed in a big farm. where the rent takes the font of SO much money per acre. But in a farm there are liked up good acres as well as bad ones. THe latter, if let out alone. may fetch nothing. Also. the rent paid may not be economic rent. but scarcity rent. This happens in an old country with a growing population. Then even the marginal land pays some rent which is scarcity rent. economic rent due to the natural differential advantages enjoyed by them. Finally the marginal land. with regard to an old country. like England may exist in Australia or Canada supplying the same market case with wages, interest aim profit. These payments arise because the products of the factors concerned are scarce in relation to the demand for them. Just as a superior laborer gets higher wages aim a superior entrepreneur cams higher profits than the inferior ones. superior land also commands a higher rent. “Fundamentally. all that the Arcadian theory of rent amounts . to is the truism that the better article will always mind the higher price. A more fertile acre will be worth more than a less fertile one simply because they are different things. The same truism applies to wages.’? Wick sell has pointed out that rent and wages are almost parallel cases. TI1US, there is no justification for placing rent in a special category. Land commands rent according to its marginal productivity just as labour commands wages or capital commands interest. The second point of attack is the idea of the no rent margin. This is the starting point of measuring rent according to the Arcadian theory. It is contended by modem writers that the no-rent margin may exist . in some cases, but it is not fundamental to the emergence of rent. For instance, some lands may be fit only for a specific use. e.g. growing corn. If it is not profitable to grow com on them due to fall in the price of corn, such lands lIIay go out of cultivation. or they may just pay for the cost of the crop grown Oil them. Such lands may have significance from the point of view of rent but in a different sense than held by Ricardo, If such lands arc cultivated, they tend to increase the supply of com and thu lower rents, and if they go out of cultivation. rent ri. due to a decrease in the supply of com. The cxitence of such marginal land does not give any ultimate explanation of rent. BUI We do not refer to any particular crop, especially in a fully developed country, there i~ probably no land that cannot be put to some profitable use. Thu . the margin of cultivation may vary according to the to which a particular land is put.
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