CHAPTER V.

THE LAW OF DIMINISHING RETURNS.

WE have now reached a point where we must consider the principles which govern the relations of population to subsistence.

Why should not population multiply indefinitely and still find, at each stage of increase, food ample for all? Nay, with the power there is in mutual help, and with the wonderful mechanical advantages which result from the subdivision of industry and the multiplication of occupations, why should not the share of each be continually augmenting as the number of laborers capable of rendering such mutual services and uniting in industrial enterprises, increases?

The answer to these questions is found in the Law of Diminishing Returns in Agriculture. Up to a certain point, the increase of laborers increases the product not only absolutely but relatively; that is, not only is more produced in the aggregate, but the product is larger for each laborer. Two men working over a square mile of arable land will not only merely produce twice as much as one man : they will produce more than twice, perhaps three times as much. This is because the two can take hold together of work to which the strength of either alone would be inadequate, or which requires that one person shall be in one place, and another at the same time in another place, in order that the two may act simultaneously, as, for example, one driving oxen and the other holding the plough.

Moreover, where the two are not working together, in the usual acceptation of that term, they may yet help each other greatly by agreeing to divide their tasks. Each, confining himself to a certain part, will become, for that reason, more apt and dexterous, will learn to avoid mistakes and save waste, and will acquire a facility in production which would be impossible were he to undertake a wider and more varied line of duties.

For a similar reason, three men will not merely produce three times as much as one: they will probably produce four times, perhaps five times, as much. A minuter subdivision of industry will become possible, and a more effective assistance in those parts of the work which require the actual co-operation of the different members.

Much in the same way is it with the application of capital to land. Let four men be working upon a square mile of arable land, having the use of a capital to the value of $25, comprising rude spades, axes, and hoes. Now, double that capital, allowing an improvement in the quality of the tools or an increase in the quantity as may be desired. There will be, if that additional capital have been judiciously used, an increase of product over the product of the same men when employing the smaller capital, which increase we will call A. If we place in the hands of these men another $25 of capital, in forms appropriate to their wants, making $75 capital in all, we shall have another increment of product; but it will not be A only, but A plus something. And if. again, we give them an additional capital of $75, making $150 in all, including now a horse, a plough, and a cart, the addition made thereby to their product will not be 3A merely: it may be 5A; it may be 10A; it may be 20A.

This process of increasing the labor and capital to be applied to a square mile of arable land might, as we need not take space to show, be continued to a very considerable extent; and all the while it would remain true that the product was increased more than proportionally, so

that a continually larger share could be assigned to each individual laborer, and to each dollar of capital. The two principal causes for such increase of product, if we confine our attention to the increase in the number of laborers -as, for simplicity's sake, we shall hereafter do-are those already indicated, namely: 1st, the ability of men actually working together to do things to which any one of them would be singly incompetent, or would do slowly, painfully, and imperfectly; and 2d, the advantages which men acquire by dividing their tasks, so that each may confine himself to a single line of duties, and acquire a higher degree of efficiency therein.

But now appears a new opportunity for at once employ ing more laborers on our square-mile tract, and increasing the remuneration of each. Let us suppose there are 12 laborers, and that the increase of capital has been such as to give them a sufficiency of the ordinary tools used in agriculture at the time. Let us also suppose that out of their previous production they have been able to save a considerable store of provisions and other necessaries of life, all included under the generic name capital. They have also bred livestock till they have a pretty full supply of working animals.

Up to this time they have been cultivating only certain portions of the tract to which we have assigned them. They could not cultivate the whole successfully with so few hands, and they have accordingly made selection of those parts which were best suited to their immediate purposes.' A skilled agriculturist walking over the tract, kicking a clod now and then on the cultivated parts with his toe, and breaking a hole with his heel, here and there, through the natural turf, would say that they had thus far made use only of the light, warm, sandy soils which yield

1 "The principle which guides the American farmer is to take the most paying crop which can be grown with the least cost of labor."James Caird's Prairie Farming, p. 21.

quick returns on the application of little labor, but that there were other portions of the tract, as yet wet and cold, with a strong, deep soil, which would some time, with labor and capital, be much better worth cultivating. Moreover, a portion of the tract is covered with wood, and a hundred acres, or so, lie in swamp, useless, and even pestiferous, to our young community.

Now, having reached the comparative freedom of life we have described, feeling strong in their united labor and their accumulated capital,' they resolve to undertake the thorough drainage of the swamp; and with this view invite four new laborers from outside to join fortunes with them. The draining of the swamp involves a year's labor, and requires the community to give up a year's crop, a thing which they would have been unable to do at an earlier period in their history, but which their accumulations now render possible. The ground thus drained and opened, rich with the vegetable deposits of centuries, proves to be by far the most productive portion of their land. So far as they still work upon the old lands they achieve as large a product as before; so far as they work upon the new land the product is greater; and consequently (as we are assuming a community of land, of labor, and of wealth) the share of each is greater in spite of, or indeed by reason of, the increase in their numbers.

A few years pass. The store of provisions and other necessaries, of implements and of livestock, which was drawn down very low by the great effort of draining the swamp, has now, from the increased productiveness of the joint estate, grown to dimensions larger than ever before. The community is now, therefore, in a position to undertake any improvement which, though involving large pre

1 "In a new country and among poor settlers . . . poor land is a relative term. Land is called poor which is not suitable to a poor man, which, on mere clearing and burning, will not yield good first crops. Thus that which is poor land for a poor man may prove rich land to a rich man."-Prof. Johnston's Notes on North America, ii. 116, 117.

....

sent expenditures, promises to be remunerative in the final result. The incentive thus arising from the possession of capital joining, as it chances, with the arrival of four new laborers who desire to cast in their fortunes with the young community, leads to the resolution to thoroughly underdrain the rich, deep soils which have been lying so long cold and wet, on the further side of a sharp, rocky ridge, while the thinner but dryer and warmer parts have been cultivated for the sake of their quick returns. Another harvest is foregone and the year given up to the improvement, which again brings the stock of provisions and clothing very low, and reduces the tools and livestock of the community to the smallest dimensions consistent with working efficiency; but the thing is done, and done once for all soils richer and stronger have been opened to tillage, and the community, now consisting of 20 laborers, is able to withdraw, in the main, from the lighter, sandy soils, and concentrate their energies principally on the site of the former swamp, and on the parts last brought under cultivation; and now the product per man is notably increased, while the capabilities of the soil are so liberal that the land responds to every increase of capital with constantlyincreasing returns.

It will not be necessary to recite the cutting down of the timber, the clearing up of the ground, and the opening of what is, after all, the best land of the whole tract. Suffice it to say that the poorer lands are now given up entirely, and the community, increased by accessions from abroad to 24 laborers, working on none but those soils which are really in the broad view the most productive, obtains a larger percapita crop than ever before.

So far certainly we have not reached a condition of "diminishing returns." On the contrary, returns have increased with and through the increase of population. But we will now suppose that 24 laborers are as many as can be employed to the best advantage on the good lands of the tract which we have been considering, and that if