VARYING COSTS; DIMINISHING RETURNS 81
differences in managerial capacity. The reason why some estab-
lishments, for example, are better located than others is at bottom
the same as that why some are better organized than others: the
managers are more shrewd and capable. And these more capable
managers get a differential return analogous to rent. It is analo-
gous to economic rent, that is, in industries where there is nothing
which could in strictness be called a monopoly — where there is
no control of supply in any single hand, but a free field for all who
care to enter.
The phenomenon differs from that of economic rent, however, in
that these powers of superior productiveness are transferable. The
abler business man is not bound to any industry or any field. He
roams at large, turning his faculties in whatever direction he finds
they tell most profitably. The case is otherwise with land and
natural agents. If a landowner finds his differential gain lessened,
he must accept the situation once for all and submit to the loss.
To some extent he can indeed turn the land to one crop or another ;
but the possibilities of such shifts are limited, and they mean, not
that loss is avoided, but only that it is perhaps made smaller.
The landowner cannot transfer the superior powers of his acres
to other acres or to a manufacturing industry. The superior
business manager, however, if he finds that his powers are exer-
cised with less effect in one industry than another, turns from the
less profitable to the more profitable.
It is true that a superior business man may secure ordinary profits
(i.e. non-superior profits) in an industry which would yield no
profits at all to the non-superior business man. Tho he engage in
an industry which possesses no comparative advantage of the sort
that has been illustrated and discussed in these pages, he may
succeed, notwithstanding the absence of advantage, in making
both ends meet and even in clearing a profit for himself. But he
cannot clear as much for himself as he could in industries adapted to
the general industrial advantages of the country. And the superior
business man will not ordinarily turn to the ill-adapted industries.
One of the signs of superiority is the very fact that he has an eye for
the more promising possibilities. He sees better than most what is
