Rent is considered to be a payment, which is constantly increasing, made to a class which has not earned it. That Ricardo entertained the idea of a continuous growth of rent as a characteristic feature of progressive civilisation cannot be questioned, and he generalised from the conspicuous circumstances of his times. The law of diminishing returns seemed to be rigorously applying to English agriculture, and the margin of cultivation to be extending to poorer and yet poorer soils. Population was rapidly increasing, and the importation of food from abroad on any large scale appeared to be as far removed from the sphere of practical possibilities as the introduction of any notable improvements in agricultural science or practice. There seemed to be no doubt that the natural tendency of rent was to rise at the expense of wages and profits, as the pressure of population on the resources of land became more urgent.
Later experience has, however, shown that what Ricardo himself regarded as improbable, although he recognised its possibility, has actually occurred. The law of diminishing returns may be postponed or counteracted in various ways. A denser population may conceivably permit of greater organisation and division of labour, and its effective application to the cultivation of land, so as to result in an increasing rather than a diminishing return. Some special application of capital on an extensive scale may so alter the character of land, or the circrunstances and conditions of production from it, as to cause for some time more and not less abundant returns. Intensive cultivation may be substituted for extensive methods, or improved machinery or fresh manures be employed. Or lastly, an alteration in the means of conveying the produce to the market may diminish the cost of transportation: and in these various ways the practical consequences of the law of diminishing returns may be postponed or counteracted.
Again, changes in transportation may open the resources of more lands than before to certain markets, or bring within the range of certain lands more markets than before. They may alter the relative situation of different soils with reference to the market, and, while producing perhaps a fresh increment of rent in some cases, they may occasion a decrement in others. The serious fall in English agricultural rents of recent years has, for example, been largely due to the immense improvement in the means, and decrease in the cost, of transporting grain from the rich virgin soils of America and from India. These changes also tend to equalise the advantages of different lands in situation with
