chaos. Thus rent, like interest, will be found
indispensable as a measure under any efficient system of society, even
if it might not always represent the payment of sums of money to
private individuals. And that is why the principles governing rent
possess, as I indicated at the outset of this chapter, an importance
more fundamental than our present system of ownership and tenure.

Sec.6. _The Question of Real Costs_. But we must not forget the
preliminary question that started us upon our analysis of the agents
of production. The rent which a manufacturer or farmer has to pay for
his land he naturally includes in his cost of production. But does
this money cost to the individual correspond to, and measure, any real
cost to the community as a whole? Here let us note in the first place
that if only we could disregard the variety of uses to which land is
put, if we could suppose that all industry was agriculture, and that
agriculture was a single industry with a single product, we could
argue that rent does not enter into marginal costs at all. For we
could regard the marginal producer as the one working on a marginal
farm, whereas we have seen there is no pure rent. The rent which other
producers have to pay would thus represent merely the destination of
the surplus profits which arise wherever actual costs fall short of
marginal costs. This way of looking at the matter has proved
attractive to some thinkers, not in the least because of a desire to
palliate the effects of landlordism, but because it fits in so well
with our general sense of rent as a "surplus," and a surplus as
something distinct from a necessary price. But it is clearly
illegitimate in an economic theory which professes "to describe the
facts." The marginal land for many purposes fetches, as we have seen,
a considerable rent; and this rent is certainly part of the marginal
costs and of the necessary price of the products of the particular
industry. The answer to our question is, however, not now very
difficult to see. Land, greatly as it differs in many respects from
the other agents of production, resembles them in the very important
respect that, being used for one purpose, it is not available for
other purposes, and that the productive powers of the community in
other directions are thereby diminished. This is the real cost to the
community, which attaches to the products of any industry, in virtue
of the land which it occupies; not any human labo