Value and distribution; an historical, critical, and constructive study in economic theory, adapted for advanced and post-graduate work . , of course, put the agrarians upon the defensive,and the defence which they set up was that highrents do not in any way affect the price of corn, andso do not affect the rate of wages. 38. Rent does not enter into the Determinationof Price.—In support of this contention it was urgedthat the price of wheat must always be high enoughto pay the cost of production on the poorest farmthat is maintained in cultivation. Kent, it was said,is the surplus secur
Value and distribution; an historical, critical, and constructive study in economic theory, adapted for advanced and post-graduate work . , of course, put the agrarians upon the defensive,and the defence which they set up was that highrents do not in any way affect the price of corn, andso do not affect the rate of wages. 38. Rent does not enter into the Determinationof Price.—In support of this contention it was urgedthat the price of wheat must always be high enoughto pay the cost of production on the poorest farmthat is maintained in cultivation. Kent, it was said,is the surplus secured by those who have moreefficient farms (farms that are more fertile or thatare nearer the market) : hence rent does not de-termine price, but is determined by price. E-ent sodefined is, of course, an entirely different conceptfrom the rent of every-day language. It clearly ex-cluded all interests on the cost of improvements, andwas supposed to include only payments for theoriginal and indestructible powers of the following graphic illustration may serve to makethe thouo-ht a little clearer. THE RENT OF LAND. 85 Fig. 39. Diagram, of Rent.—As the number of farmsgrowing wheat is very large, and as it is possiblethat no two are ofexactly equal effi-ciency in the pro-duction of wheat,we can conceive ofthem as arrangedin a series of increasing difficulty or non-efficiencyin production. In Fig. 8 OH represents the cost ordisutility of production on the most efficient farm,while MN represents the cost or disutility on theleast efficient farm, that must be maintained in cul-tivation in order to insure a given supply of , it was the contention of those who sought todefend the agrarian interests that the price of wheatmust equal the cost, MN, or the supply of cornwould decrease; for the marginal producer, or hewho produces at the greatest cost, will not continueto produce if he does not at least secure an amountthat will cover his cost. In other words, the price
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