ABSTRACT
The quantity of land supplied is in an old country not subject to variation in response to variation in the price of land. A stock and not a flow , land can be reallocated from one employment to another in the manner of the zero sum game but its aggregate magnitude simply cannot be increased:
The building an additional floor on one factory or putting an extra plough on one farm, does not generally take a floor from another factory or a plough from another farm; the nation adds a factory floor or a plough to its business as the individual does to his. There is thus a larger national dividend which is to be shared out ... In contrast to this the stock of land (in an old country) at any time is the stock for all time; and when a manufacturer or cultivator decides to take in a little more land to his business, he decides in effect to take it away from someone else's business.I
The supply of land, unlike that of replicable inputs and reproducible utilities, is 'not dependent on human effort' and 'would therefore not be increased by extra rewards to that effort '." Neither increased nor diminished; and in that sense the reward to a scarce factor in absolutely inelasticand permanently fixed supply can only be regarded as a
demand-determined surplus and not at all as a genuine supply price representing intrinsic real cost. After all, the same quantity of land is supplied regardless of the price offered, and no toil and trouble is involved in the action of supplying that land - as the case of 'barren heath land' so aptly illustrates: 'Barren heath land may suddenly acquire a highvalue from the growth of an industrial population near it; though its owners have left it untouched as it was made by nature.' 3
The reference to nature is important since it reminds us of Marshall'spractice of explaining rent not simply in terms of inelasticity of supply but in terms of the source or origin of the input as well. Marshall was, in other words, in the habit of making a clear distinction between the work of man and the work of nature and of treating land as an unambiguous instance of the latter category. As he put it when introducing the topic in the Principles: 'By Land is meant the material and the forces which Nature gives freely for man's aid, in land and water, in air and lightand heat." The term 'land' thus refers not only to absolute fixity of supply but also to the nature of Nature and to a commodity which is the gift of God: 'The term "land" has been extended by economistsso as to include the permanent sources of ... utilities, whether they are found in land, as the term is commonly used, or in seas and rivers, in sunshine and rain, in winds and waterfalls. " Needless to say, what is the gift of God and not the work of man is also a free gift, and here once again we encounter the important result that land has no supply price: 'While man has no power of creating matter , he creates utilities by putting things into a useful form; and the utilities made by him can be increased in supply if there is an increased demand for them: they have a supply price. But there are other utilities over the supply of which he has no control; they are given as a fixed quantity by nature and have therefore no supply price.' 6 It is in this context that Marshall quotes with. approbation Ricardo's phrase 'the original and indestructible powers of the soil'.7 Those powers give rise to rent but do not receive it.
