THE PROBLEM OF RENT 101

more ample supply of capital and labour under his control
may be able to offer a higher price for the land. Supposing
capital and labour to be abundant relative to the land
available, consider what is implied in the statement that the
greatest net return is taken as basis in determining the
amount the farmer can afford to pay for the hire of the land.
Suppose the plan of cultivation selected to be modified in
the direction either of greater or less expenditure per acre.
If the expenditure be less, the net return being less implies
that an increase of expenditure would add more to the
gross return than would be added to expenses, that is, it
would increase the surplus, If the expenditure be greater,
the surplus is reduced : this must, clearly, be due to an excess
of the added expenses over the addition to the gross return
thereby secured. If reduction of outlay and increase of
outlay be alike accompanied by reduction of the net surplus
of returns over expenses, the marginal outlay must just be
remunerated, the marginal expenses must add to the gross
returns just sufficient to meet those expenses.
The price paid for the hire of land is known as Rent,
and in economics this word is used to indicate the amount
of the surplus of returns over expenses, which can profitably
be offered (but not exceeded) for the use of land when land is
hired from its owner by its user. In what has preceded, there
has been considered a surplus out of which farmer and landlord
were both to be remunerated. This course has been taken
in view of the difficulty of charging for the farmer's labour
and skill, with hired labour and capital. In general the
land is, and is regarded as, a fixed productive instrument,
with which are to be associated appropriate amounts of
sther instruments, the latter being able to be varied in
Juantity at pleasure. But with the land is also, in general,
associated the farmer, and we have regarded the two as
a combination of unvaried amount, with which suitable,
variable, amounts of capital and labour may be associated.
We have conceived the farmer as hiring the labour he needs
and the capital he uses, or charging them against expenses
at the rate at which they might be hired; also as selling the
oroduce, or estimating it at its selling value if it be not sold.