Note 152-3 — Chapter II

Ricardo says that if air, water, elasticity and steam were of different qualities, and might be made objects of exclusive possession; and that if each kind could be had only in a moderate supply, they would, like land, produce a rent, according as they were brought into use, one kind after another. In the class of natural forces, also, the possession of a secret of production or of inimitable skill, or a legal right to its exclusive use, may produce something similar to rent. (Senior, Outlines, 91.) Hermann, Staatswirthsch. Unters., 163 ff., had already laid the foundation of this doctrine, and earlier yet, Canard, 17 seq., and Hufeland. I, 303 ff. See supra, § 120. Hence v. Mangoldt uses the word rent to designate all rarity-premiums. John Stuart Mill, III, ch. 5, 4. Schäffle speaks of the universal existence of a surplus; that is, of the factor of rent (Nat. Oek., I, Aufl., 140 ff.), and has recently developed this into a theory thoroughly systematic and detailed. (Nationalökonomische Theorie der ausschliessenden Absatzverhältnisse, 1867.)

According to him, rent is "the premium paid for the most economic course taken in the interest of society in general;" and hence he finds rent as much in superior labor and in a very advantageous outlay of capital. Yet he grants, that "exclusive custom (Kundschaft) on the basis of natural advantages occurs only in the case of land-rent." (59.) And even granting that he is right, that no rent is by itself forever secure (74 seq.), and that much rent is a premium paid for a search after and the appropriation of the best land, divination of the best situations, etc. (60 ff., 74 ff.), there still remains the great difference between rent and the extra income from labor and capital; that here the very transitory nature of the substratum, or basis, and the personal merit of the recipient, is the rule, while in the former case it is a rare exception. Willingly, therefore, as I recognize the possibility and fruitfulness of Schäffle's way of conceiving this subject (the latter, especially, for monographic purposes), I prefer, so far as the entire system is concerned, the keeping apart of the three branches of income corresponding to the three factors of production as has been usual since Adam Smith's time.