d are supplied, Nature is an
indispensable participant. She renders her assistance in an infinite
variety of ways, of which the properties of the soil which man
cultivates form only one; but the sunshine and rain which enable the
farmer to grow his crops; the coal and iron ore beneath the surface of
the earth, can be regarded for our present purpose as forming part of
the land with which they are associated. We can thus concentrate upon
land as the representative of the free gifts of nature, which are of
economic significance. Land in modern communities is for the most part
privately owned. It can be bought and sold for a price, and acquired
by inheritance. Moreover, it is a common practice, particularly in the
United Kingdom, for an owner who does not wish himself to cultivate or
otherwise use the land, not to sell it to the man who does, but to
lease it to him for a term of years for an annual payment which we
term rent. It is therefore natural and convenient to envisage the
problems, which we shall consider in this chapter, as problems
concerning the price and rent of land. But, once again, the laws and
principles which we shall state and illustrate in terms of the current
systems of ownership and tenure, possess a much deeper significance
than this terminology might suggest.

The fact that land is a free gift of Nature distinguishes it in
various ways from commodities which are produced by man. The
peculiarities which are most important from the economic standpoint
are (1) that the supply of land is, broadly speaking, fixed and
unalterable, and (2) that its quality and value vary, from piece to
piece, with a variation which is immense in its range, but fairly
continuous in its gradation. These are thus two aspects from which
the phenomena of price and rent can be regarded; aspects which it is
usual to call, (1) the scarcity aspect, (2) the differential aspect.

Sec.2. _The Scarcity Aspect_. The fact that the supply of land is fixed
has the following significance. If the demand for land increases, the
price will tend to rise. This is also true, for a short period at
least, of an ordinary commodity. But, in the latter case, there would
ensue an increase in supply which would serve to check the rise in
price, and possibly, if production on a larger scale led to improved
methods of production, bring the price down eventually below its
original level. In the case of land, no such reaction is
possible. There is nothin