the old formula for rent we need to be careful to make it mean that
the rent of the good piece is its total product less the product that
can be had by taking from the good piece the labor and capital it now
absorbs and setting them at work on a piece of the poorest land which
is enough larger than the good one to enable us to secure a crop which
will be worth just the amount of wages and interest we must pay. The
larger size of the poor piece of land is an essential condition.

_Real Significance of Rent Formula._--It will be seen that this
formula amounts to saying that the rent of land is what the land
itself adds to the marginal product of labor and capital. Put a
certain amount of labor and capital on a piece of land of good
quality, and you get a certain amount of product. Withdraw the land
from the combination, and you force the labor and capital to become
marginal increments of these agents. They must go elsewhere and get
what they can. One alternative that is open to them is that of seeking
out land of a grade so poor that it has not been previously utilized
and doing what they can to get a product out of it. Whatever they can
make such land yield is, in an economic sense, wholly their own
product. There is an indefinite quantity of this kind of land to be
had, and wherever labor and capital utilize any part of it, they can
have all that they produce. Now if we subtract what they there create
from what was created when they were working on the good land, we have
the rent of that land.

_Rent as a Product Imputable to Land._--The difference between what
the labor and capital produce at the margin of cultivation of land
and what they can produce on good land, or land that lies within the
margin, is clearly attributable to the qualities of the land itself.
Given _X_ units of labor and _Y_ units of capital, combine with them
no land except such as is too poor to have been previously utilized,
and you get a certain product. It is the product of the labor and
capital using something which is free to any one. Now put a piece of
good land into the combination; to the _X_ units of labor and _Y_
units of capital add a piece of productive land and see what you can
create. We do this by taking these units of labor and capital away
from the worthless marginal land and setting them to tilling that
which is of the better quality. The product is of course larger than
they got before, and the difference measures what the land