The marginal farmer and the marginal capital-
goods must, on the long time average, be main-
tained, and the hire of the capital-goods must be
paid. As land which will not produce this much
will not be brought under cultivation, it is clearly
the return demanded by farmers for labor and the
use of capital-goods which determines the margin
of cultivation, and not the productivity of the
marginal land which determines the amount which
is paid for the use of capital-goods. But why is
it that more must be paid for the use of capital-
goods than sufficient to keep such goods intact?
In other words, why must a hire be paid for the
use of capital-goods ?

First, the supply is limited. The supply can-
not be increased indefinitely without some sacri-
fice of the gratification of present desires. Men
are usually desirous of laying up something for
the future, but they are more concerned with the
gratification of present wants until the latter are
partially satisfied. That is, men value the means
of gratifying their present wants more highly than
they do the means of gratifying the wants of
of the future, and as a result, after saving has
reached a certain point, they will not refrain from
consuming wealth to-day in order that it may be
turned into capital-goods, unless they have the
assurance that a greater amount of wealth will be

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AGRICULTURAL ECONOMICS

returned to them in the future. In old countries
where there is much wealth already accumulated
in the various forms of capital-goods, the present
wants, of the wealthier classes at least, are more
completely satisfied, and future wants are esti-
mated relatively more highly than in a poor coun-
try where present wants are more intense. Hence
the amount of hire which must be paid for the use
of capital-goods will be smaller in wealthy coun-
tries than in countries where little wealth has been
accumulated.
