petitive character, and to the influence of kindly, personal considerations. And hence it is generally admitted that, taking a broad view of agricultural land, English rents have not reached an extreme competitive limit. But these considerations, however instructive, are not perhaps of such importance in the relations of the theory to practice as others which are more easily overlooked.
The assumption of competition implies that landlords and tenants are independent, intelligent agents, able to carry their services and commodities to the best market. It implies, therefore, that farmers are able and willing to move to any county or trade where they will secure more favourable conditions, that they know, and can compare, the different advantages of different soils and districts and trades. But it is not always the case that tenants are thus independent, intelligent agents; and, even if they are, they may yet be unable to take their wares and services to the best market. They may have given hostages to the land, which they cultivate, by investing capital in its improvement; and this is one theoretical justification of the Agricultural Holdings Acts of 1875 and 1883. Those Acts have recognised the inability of a tenant to remove his improvements, and provided for compensation for such part as may be 'unexhausted' at the close of a tenancy. It would not be difficult to show that they are not in conflict, but rather in harmony, with the theory of rent in making such a provision; for the tenants have sunk capital in the cultivation of land, which they cannot withdraw and offer for sale in the best market.
Again, the theory of rent assumes that tenants cultivate with a single eye to the sale of the produce in the market; for it is only by starting with the conditions determining the selling-price that we arrive at the establishment of differential advantages enjoyed by different producers, and the consequent existence of rent. It has sometimes been argued that it is difficult to bring the case of peasant proprietors within the comprehension of the theory, because they combine in their own person the functions of landlords, tenants, and labourers. But for the purposes of theoretical inquiry we may separate what are sometimes conjoined in fact; and one of the most important of recent advances in economic theory has been due to the distinction established between the functions of the employer and those of the capitalist, although these functions are, sometimes indeed, and to some extent usually, exercised by different persons, but are also, often entirely, and generally in some degree, combined in the same individual. The existence of a
