of nitrogen were applied in the fertilizer. Forty-three pounds were applied to one; 86 pounds to another; 129 pounds to another; and 172 pounds to another. The following table shows the results:

According to this table the yields show diminishing returns for each successive dose of 43 pounds of nitrogen. The gain on Plot No. 16 over Plot No. 8 was so slight, being only five eighths of a bushel, as to be obviously unprofitable. Therefore this plot was discontinued at the end of eight years, but the other four were continued for forty-eight years, with the following results:

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The number of plots is too small to be finally conclusive, but so far as they go they show interesting results. The first two doses of 43 pounds each (on Plot No. 6 and Plot No. 7) show

1 These tables are presented in the excellent article by Eugene Davenport, in Bailey's "Cyclopedia of American Agriculture" (The Macmillan Company, New York); compare also the author's volume "Principles of Rural Economics" (Ginn and Company, Boston, 1911), pp. 183-184.

constant returns, and the third dose (on Plot No. 8) shows sharply diminishing returns. Allowing $6.50 as a fair price for 43 pounds of nitrogen and $1 as a fair price for a bushel of wheat we get the following results:

If the price of wheat were $2 a bushel the net gains would have been $11.50 on Plot No. 6, $11.50 on Plot No. 7, and $1 on Plot No. 8. In other words, the last dose of 43 pounds of nitrogen would have paid a profit of $1 instead of a loss of $2.75. But if the price of wheat had been 50 cents a bushel, nitrogen costing the same, there would have been a loss on every dose of nitrogen.

Problems to be worked out.

These tables present a number of interesting problems which the student may work out for himself. Taking Tables II and III as a basis, the following problems are suggested:

1. With 43 pounds of nitrogen costing $6.50, at what average price must wheat sell in order that the farmer may come out just even, with neither profit nor loss, on the third dose of 43 pounds of nitrogen (Plot No. 8)?

2. With wheat selling at $1 a bushel, at what price must 43 pounds of nitrogen sell in order that the farmer may come out even on the same plot with the same application of nitrogen?

We may, without doing violence to language, turn about and speak of "applying" doses of land-plus-other-factors to nitrogen. Let us start with 129 pounds of nitrogen, to which one plot, or dose of land-plus-other-factors, is applied, yielding (according to Tables II and III) 363 bushels. Adding two more

plots to this combination (that is, spreading our 129 pounds. of nitrogen over three plots instead of one) we get a much larger crop. Assuming that Plot No. 6 is exactly equal to Plot No. 8 we get 72 bushels; that is, on Plot No. 6 one dose of nitrogen with one dose of land-plus-other-factors yields, according to our tables, 24 bushels. Three doses of 43 pounds of nitrogen added to three doses of land-plus-other-factors should give us three times as much, which makes 72 bushels.

Since three doses of nitrogen with one dose of land-plusother-factors yields 72, it follows that the adding of two doses of land-plus-other-factors adds 35 bushels.

A large number of experiments of the same kind needed. We have not plots enough to carry this analysis much further, but it is probably clear enough by this time that by varying the ratios in which different factors are mixed in any productive combination we get varying results. That being the case, any economist who is not willing to consider the relation of the variation in the factors to the variation in the product is not much of an economist. It must also be apparent by this time that the relation between the variation in the quantity of any factor in the combination and the variation in the product must have a great deal to do with determining the value of the factor.

This method gives the key to all correct valuation. Earlier in the chapter the term "marginal productivity" was applied to the variation in the product which followed a minute variation in the quantity of any factor in the combination. In each of the Tables I, II, III, the figures in the third column would be called the marginal product of nitrogen. Objection has occasionally been raised to the use of the word "product" in this sense. It is contended that even these increments of product are not in any sense the exclusive product of the 43 pounds of nitrogen which were added in order to get that increment,that 43 pounds of nitrogen, alone and unrelated to the other factors, would not produce even the small increments of wheat indicated in the third column. No one, of course, claims that they would or could. It is not worth while to discuss this or

that possible meaning of the word "product" or "productivity." The essential thing to consider is, How much could a farmer afford to pay for a given quantity of nitrogen to be used in a given combination? It is obvious that this must depend on the way it would affect the crop. How much more wheat could he grow by using more nitrogen or how much less would he grow by using less? There is no question more practical than this. It is, moreover, a question which must be raised with respect to each and every factor in that combination of factors called a farm, or in any other business establishment. It is in the answers to such questions that we must find the key to any clear understanding of the problem of the distribution of wealth, which is, as pointed out in the beginning of this chapter, the problem of the valuation of the factors of production.

CHAPTER XXXIV

THE PROBLEM OF DISTRIBUTION

How intensely is a man's labor desired? The price of labor, like the price of commodities, depends upon how much it is desired in comparison with other things. It is important in discussing wages, as in discussing the price of commodities, that we remember that it is not labor in general, but specific units of labor, which are purchased. The question is not how intense is the need or desire for labor in general nor how great would be the loss if all labor were destroyed. The question is how intense is the need for a given number of units of a given kind of labor or how great would be the loss if that given number of units were subtracted from the total supply. In the case of labor, as in the case of commodities, the practical everyday question on the part of the prospective purchaser is, How much do I need this particular article or the labor of this particular man? How much better off shall I be with the advantage of his help than without it?

The need for more labor, rather than the absolute need for labor. It may be true that if there were no labor of a given class, say that of ditch-diggers, the community would suffer terribly. Nevertheless, there may be so many ditch-diggers that the addition of one to the total number would add very little to, and the subtraction of one would subtract very little from, the well-being of the community. When this is the case the labor of any one of the total number will not be very much desired. Would-be employers will be somewhat indifferent to his offers to help and to his threats to stop working or to emigrate. The indispensable man, like the indispensable commodity, commands the high price; the man who can be easily spared, like the superfluous commodity, brings the low price.