§1. Land differs from the other elements of production, labour and capital, in not being susceptible of indefinite increase. Its extent is limited, and the extent of the more productive kinds of it more limited still. It is also evident that the quantity of produce capable of being raised on any given piece of land is not indefinite. This limited quantity of land, and limited productiveness of it, are the real limits to the increase of production.

That they are the ultimate limits, must always have been clearly seen. But since the final barrier has never in any instance been reached; since there is no country in which all the land, capable of yielding food, is so highly cultivated that a larger produce could not (even without supposing any fresh advance in agricultural knowledge) be obtained from it, and since a large portion of the earth’s surface still remains entirely uncultivated; it is commonly thought, and is very natural at first to suppose, that for the present all limitation of production or population from this source is at an indefinite distance, and that ages must elapse before any practical necessity arises for taking the limiting principle into serious consideration.

I apprehend this to be not only an error, but the most serious one, to be found in the whole field of political economy. The question is more important and fundamental than any other; it involves the whole subject of the causes of poverty, in a rich and industrious community: and unless this one matter be thoroughly understood, it is to no purpose proceeding any further in our inquiry.

§2. The limitation to production from the properties of the soil, is not like the obstacle opposed by a wall, which stands immovable in one particular spot, and offers no hindrance to motion short of stopping it entirely. We may rather compare it to a highly elastic and extensible band, which is hardy ever so violently stretched that it could not possibly be stretched any more, yet the pressure of which is felt long before the final limit is reached, and felt more severely the nearer that limit is approached.

After a certain, and not very advanced, stage in the progress of agriculture, it is the law of production from the land, that in any given state of agricultural skill and knowledge, by increasing the labour, the produce is not increased in an equal degree; doubling the labour does not double the produce; or, to express the same thing in other words, every increase of produce is obtained by a more than proportional increase in the application of labour to the land.

This general law of agricultural industry is the most important proposition in political economy. Were the law different, nearly all the phenomena of the production and distribution of wealth would be other than they are. The most fundamental errors which still prevail on our subject, result from not perceiving this law at work underneath the more superficial agencies on which attention fixes itself; but mistaking those agencies for the ultimate causes of effects of which they may influence the form and mode, but of which it alone determines the essence.

When, for the purpose of raising an increase of produce, recourse is had to inferior land, it is evident that, so far, the produce does not increase in the same proportion with the labour. The very meaning of inferior land, is land which with equal labour returns a smaller amount of produce. Land may be inferior either in fertility or in situation. The one requires a greater proportional amount of labour for growing the produce, the other for carrying it to market. If the land A yields a thousand quarters of wheat, to a given outlay in wages, manure, &c., and in order to raise another thousand recourse must be had to the land B, which is either less fertile or more distant from the market, the two thousand quarters will cost more than twice as much labour as the original thousand, and the produce of agriculture will be increased in a less ratio than the labour employed in procuring it.

Instead of cultivating the land B, it would be possible, by higher cultivation, to make the land A produce more. It might be ploughed or harrowed twice instead of once, or three times instead of twice; it might be dug instead of being ploughed; after ploughing, it might be gone over with a hoe instead of a harrow, and the soil more completely pulverized; it might be oftener or more thoroughly weeded; the implements used might be of higher finish, or more elaborate construction; a greater quantity or more expensive kinds of manure might be applied, or when applied, they might be more carefully mixed and incorporated with the soil. These are some of the modes by which the same land may be made to yield a greater produce; and when a greater produce must be had, some of these are among the means usually employed for obtaining it. But, that it is obtained at a more than proportional increase of expense, is evident from the fact that inferior lands are cultivated. Inferior lands, or lands at a greater distance from the market, of course yield an inferior return, and an increasing demand cannot be supplied from them unless at an augmentation of cost, and therefore of price. If the additional demand could continue to be supplied from the superior lands, by applying additional labour and capital, at no greater proportional cost than that at which they yield the quantity first demanded of them, the owners or farmers of those lands could undersell all others, and engross the whole market. Lands of a lower degree of fertility or in a more remote situation, might indeed be cultivated by their proprietors, for the sake of subsistence or independence; but it never could be the interest of any one to farm them for profit. That a profit can be made from them, sufficient to attract capital to such an investment, is a proof that cultivation on the more eligible lands has reached a point, beyond which any greater application of labour and capital would yield, at the best, no greater return than can be obtained at the same expense from less fertile or less favourably situated lands.

The careful cultivation of a well-farmed district of England or Scotland is a symptom and an effect of the more unfavourable terms which the land has begun to exact for any increase of its fruits. Such elaborate cultivation costs much more in proportion, and requires a higher price to render it profitable, than farming on a more superficial system; and would not be adopted if access could be had to land of equal fertility, previously unoccupied. Where there is the choice of raising the increasing supply which society requires, from fresh land of as good quality as that already cultivated, no attempt is made to extract from land anything approaching to what it will yield on what are esteemed the best European modes of cultivating. The land is tasked up to the point at which the greatest return is obtained in proportion to the labour employed, but no further: any additional labour is carried elsewhere. “It is long,” says an intelligent traveller in the United States,1 “before an English eye becomes reconciled to the lightness of the crops and the careless farming (as we should call it) which is apparent. One forgets that where land is so plentiful and labour so dear as it is here, a totally different principle must be pursued to that which prevails in populous countries, and that the consequence will of course be a want of tidiness, as it were, and finish, about everything which requires labour.” Of the two causes mentioned, the plentifulness of land seems to me the true explanation, rather than the dearness of labour; for, however dear labour may be, when food is wanted, labour will always be applied to producing it in preference to anything else. But this labour is more effective for its end by being applied to fresh soil, than if it were employed in bringing the soil already occupied into higher cultivation. Only when no soils remain to be broken up but such as either from distance or inferior quality require a considerable rise of price to render their cultivation profitable, can it become advantageous to apply the high farming of Europe to any American lands; except, perhaps, in the immediate vicinity of towns, where saving in cost of carriage may compensate for great inferiority in the return from the soil itself. As American farming is to English, so is the ordinary English to that of Flanders, Tuscany, or the Terra di Lavoro; where by the application of a far greater quantity of labour there is obtained a considerably larger gross produce, but on such terms as would never be advantageous to a mere speculator for profit, unless made so by much higher prices of agricultural produce.

The principle which has now been stated must be received, no doubt, with certain explanations and limitations. Even after the land is so highly cultivated that the mere application of additional labour, or of an additional amount of ordinary dressing, would yield no return proportioned to the expense, it may still happen that the application of a much greater additional labour and capital to improving the soil itself, by draining or permanent manures, would be as liberally remunerated by the produce, as any portion of the labour and capital already employed. It would sometimes be much more amply remunerated. This could not be, if capital always sought and found the most advantageous employment; but if the most advantageous employment has to wait longest for its remuneration, it is only in a rather advanced stage of industrial development that the preference will be given to it; and even in that advanced stage, the laws or usages connected with property in land and the tenure of farms, are often such as to prevent the disposable capital of the country from flowing freely into the channel of agricultural improvement: and hence the increased supply, required by increasing population, is sometimes raised at an augmenting cost by higher cultivation, when the means of producing it without increase of cost are known and accessible. There can be no doubt, that if capital were forthcoming to execute, within the next year, all known and recognised improvements in the land of the United Kingdom which would pay at the existing prices, that is, which would increase the produce in as great or a greater ratio than the expense; the result would be such (especially if we include Ireland in the supposition) that inferior land would not for a long time require to be brought under tillage: probably a considerable part of the less productive lands now cultivated, which are not particularly favoured by situation, would go out of culture; or (as the improvements in question are not so much applicable to good land, but operate rather by converting bad land into good) the contraction of cultivation might principally take place by a less high dressing and less elaborate tilling of land generally; a falling back to something nearer the character of American farming; such only of the poor lands being altogether abandoned as were not found susceptible of improvement. And thus the aggregate produce of the whole cultivated land would bear a larger proportion than before to the labour expended on it; and the general law of diminishing return from land would have undergone, to that extent, a temporary supersession. No one, however, can suppose that even in these circumstances, the whole produce required for the country could be raised exclusively from the best lands, together with those possessing advantages of situation to place them on a par with the best. Much would undoubtedly continue to be produced under less advantageous conditions, and with a smaller proportional return, than that obtained from the best soils and situations. And in proportion as the further increase of population required a still greater addition to the supply, the general law would resume its course, and the further augmentation would be obtained at a more than proportionate expense of labour and capital.

§3. That the produce of land increases, caeteris paribus, in a diminishing ratio to the increase in the labour employed, is a truth more often ignored or disregarded than actually denied. It has, however, met with a direct impugner in the well-known American political economist, Mr. H.C. Carey, who maintains that the real law of agricultural industry is the very reverse; the produce increasing in a greater ratio than the labour, or in other words affording to labour a perpetually increasing return. To substantiate this assertion, he argues that cultivation does not begin with the better soils, and extend from them, as the demand increases, to the poorer, but begins with the poorer, and does not, till long after, extend itself to the more fertile. Settlers in a new country invariably commence on the high and thin lands; the rich but swampy soils of the river bottoms cannot at first be brought into cultivation, by reason of their unhealthiness, and of the great and prolonged labour required for clearing and draining them. As population and wealth increase, cultivation travels down the hill sides, clearing them as it goes, and the most fertile soils, those of the low grounds, are generally (he even says universally) the latest cultivated. These propositions, with the inferences which Mr. Carey draws from them, are set forth at much length in his latest and most elaborate treatise, “Principles of Social Science;” and he considers them as subverting the very foundation of what he calls the English political economy, with all its practical consequences, especially the doctrine of free trade.

As far as words go, Mr. Carey has a good case against several of the highest authorities in political economy, who certainly did enunciate in too universal a manner the law which they laid down, not remarking that it is not true of the first cultivation in a newly settled country. Where population is thin and capital scanty, land which requires a large outlay to render it fit for tillage must remain untilled; though such lands, when their time has come, often yield a greater produce than those earlier cultivated, not only absolutely, but proportionally to the labour employed, even if we include that which had been expended in originally fitting them for culture. But it is not pretended that the law of diminishing return waS operative from the very beginning of society: and though some political economists may have believed it to come into operation earlier than it does, it begins quite early enough to support the conclusions they founded on it. Mr. Carey will hardly assert that in any old country — in England or France, for example — the lands left waste are, or have for centuries been, more naturally fertile than those under tillage. Judging even by his own imperfect test, that of local situation — how imperfect I need not stop to point out — is it true that in England or France at the present day the uncultivated part of the soil consists of the plains and valleys, and the cultivated, of the hills? Every one knows, on the contrary, that it is the high lands and thin soils which are left to nature, and when the progress of population demands an increase of cultivation, the extension is from the plains to the hills. Once in a century, perhaps, a Bedford Level may be drained, or a Lake of Harlem pumped out: but these are slight and transient exceptions to the normal progress of things; and in old countries which are at all advanced in civilization, little of this sort remains to be done.2

Mr. Carey himself unconsciously bears the strongest testimony to the reality of the law he contends against: for one of the propositions most strenuously maintained by him is, that the raw products of the soil, in an advancing community, steadily tend to rise in price. Now, the most elementary truths of political economy show that this could not happen, unless the cost of production, measured in labour, of those products, tended to rise. If the application of additional labour to the land was, as a general rule, attended with an increase in the proportional r............