RENT

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costs  per  unit  raised,  get  the  same  price  per
unit  for  their  produce  in  the  market,  and
this  is  the  price  which  it  is  necessary  to  pay
to  cause  the  production  of  the  wheat  raised
at  the  margin.  Rents,  instead  of  settling
price,  are  caused,  as  we  have  seen,  by  the
fact  that  when  all  farmers  get  the  same  price,
some  of  them  (or  all  of  them  under  conditions ­
  which  give  rise  to  scarcity  rent)  would  be
left,  in  the  absence  of  rent,  with  a  handsome
surplus  over  normal  profits,  and  that  competition ­
  for  their  farms  compels  them  to
surrender  it  to  the  landlord.  High  rents  do
not  make  high  prices  any  more  than  the
height  of  the  barometer  governs  the  state  of
the  weather.  On  the  contrary  it  is  the  high
prices  that  make  the  high  rents.
In  qualification  of  this  statement  it  must
be  added  that  a  rent  charge  comes  into  play
in  settlement  of  price  when  the  marginal
land  for  a  given  purpose  can  only  be  obtained
by  buying  out  somebody  who  requires  it  for
another  purpose.  The  marginal  factory  in
the  outskirts  of  a  town  has  had  to  win  its  site
from  agriculture  in  all  probability,  and  to  do
so  it  has  had  to  pay  for  the  land  a  charge  equal
at  least  to  its  rentable  value  for  agriculture.
This  charge,  in  being  incurred  at  the  margin,
is  an  unavoidable  element  in  marginal  cost,