Supply and Demand eBook

This eBook from the Gutenberg Project consists of approximately 178 pages of information about Supply and Demand.

Supply and Demand eBook

This eBook from the Gutenberg Project consists of approximately 178 pages of information about Supply and Demand.
with less.  The traditions associated with the ownership of agricultural land, and with the relations between landlord and tenant serve to soften the edge of economic law, and to subject the rents which are actually fixed to the control in no small measure of the general sense of what is fair or customary.  In such cases the landlord makes the farmer a present, for the time being, of part of the economic rent.  On the other hand, as Irish agrarian history well illustrates, the landlord may sometimes expropriate under the name of rent, permanent improvements which are due to the labors or the expenditure of the tenant.  This is, of course, particularly likely to happen, whenever it is the custom to leave to the tenant the obligation of providing the capital equipment of the farm, which in Great Britain is, for the most part, the recognized duty of the owner.  Again, in the case of urban land in the South of England, expropriations of this kind are an essential and well-understood feature of the leasehold system.  The owner grants a lease for a long period of time, usually ninety-nine years, for a ground rent, which is notoriously below the true economic rent of the land, subject to the condition that the leaseholder must erect upon the land and keep in good repair certain buildings, which on expiry of the lease will become the property of the ground owner.  Here the nominal ground rent is only part of the total rent which is really paid; the ultimate transference of the buildings representing often the more important part.  There is, in fact, a great variety of systems of land tenure, some of which are highly complex, the respective merits of which vary greatly, and which constitute a most important problem for statesmen and legislators.  Considerations of this kind in no way diminish the importance of the general analysis of rent, which we are pursuing in the present chapter.  Rather they make it the more important, because we cannot properly weigh the merits of any system of land tenure, until we have grasped clearly the principles governing the rent of land in the purest form.  But certainly we must never forget that the rent we are discussing may differ very greatly from, though it will vitally influence, the money payments which are called rent in actual life.  It is the pure economic rent, the rent which represents the full annual payment which it would be worth paying to obtain the use of the land alone, which will measure, as we have said, the differential advantage of the land in question over land on the margin of cultivation.

A clear grasp of this relation helps us to perceive that an increase in the prosperity of the community may sometimes influence rents in an unexpected way.  It all depends on the causes which have given rise to the increased prosperity.  An advance, for instance, in agricultural science will facilitate a more abundant supply of foodstuffs; but it will not necessarily increase the aggregate rents of agricultural

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Supply and Demand from Project Gutenberg. Public domain.