herefore making out of you a surplus profit, which would be quite
unnecessary in any well-arranged society." Such an argument is a gross
caricature of the marginal conception. The half-witted incompetent
will, as we know well enough, speedily disappear under the stress of
competition, and his place will be taken by more efficient men. There
is an essential difference between him and the "marginal coal mine" of
which we spoke above. For the probabilities are that of the coal
resources, whose existence is clearly known, the more fertile and
better situated parts will already be in process of exploitation; and
there is not likely, therefore, to be a supply of substantially better
seams which can be substituted for the worst of those in actual use.
There _is_ likely, on the other hand, to be available a supply of
decent business capacity which can be substituted for the most
inefficient of existing business men. The marginal concern, in other
words, must be conceived as that working under the least advantageous
conditions in respect of the assistance it derives from the strictly
limited resources of nature, but under average conditions as regards
managerial capacity and human qualities in general. Thus in
agriculture we can speak of a marginal farm, which we should conceive
as the least fertile and worst situated farm which it is just worth
while to cultivate (of which more will be said when we come to the
phenomenon of rent), but we must assume it to be cultivated by a
farmer of average ability.

Sec.5. _Some Consequences of a Higher Price Level_. The foregoing
controversy will be of service to us, if it makes clear the manner and
the spirit in which the marginal conception should be handled. It
should be regarded not as a rigid formula which we can apply to
diverse problems without considering the special features they
present, but rather as a signpost which will enable us to find our
way, a compass by which we may steer between the shoals of triviality
and sophistry to the crux of any problem with which we have to deal.
Let us illustrate its practical uses by an example which is of great
interest and far-reaching practical importance at the present day. As
has been already observed, the war has left behind it in all countries
a great and almost certainly permanent increase in nominal purchasing
power. Since the armistice prices have moved upwards and downwards
with unprecedented violence; and it would be very rash to p