course of time, and a regular annual production is therefore necessary to sustain their supply at the existing level.  But land remains, whether it is used or not; and its supply is, broadly speaking, just as incapable of being diminished, as it is of being increased.  Changes in the demand for land in either direction are thus likely to affect its price in a much greater degree than that in which the price of an ordinary commodity will be affected by a corresponding change in its demand.

For most purposes, however, it is of more interest to compare land with other agents of production, especially with capital and labor, rather than with ordinary commodities.  Now, as we have already noted, there is some doubt as to the manner in which the supply of capital or labor is likely to be affected by alterations in demand price.  But the supply of capital and the supply of labor, even if we suppose them to be as entirely unresponsive to price changes as is the supply of land, are at any rate not fixed.  Not only may they vary for many reasons, but they are in fact likely to vary in direct proportion to the population.  An increase in population implies an increase in the supply of labor; and it is likely to be accompanied by an increase in the supply of capital; in other words, the supply of these agents will expand, as the demand for them expands.  But the supply of land will remain what it was.  This fact is enormously important in connection with the broad problem of population, which will form the theme of Volume VI.

But it is important also in other connections.  It has been the dominating factor in many absorbing controversies upon high policy regarding the ownership of land, or the taxation of land values, upon which we can touch but lightly here.  It has seemed to many writers a reasonable proposition to lay down, that the ordinary course of the progress of society, the increase of population and industry, must mean, as a broad general rule, a constant increase in the demand for land.  And, if that be granted, it seems to follow that the price and rent of land will tend constantly to increase.  John Stuart Mill, accordingly, in the middle of the last century, asserted that “the ordinary progress of a society, which increases in wealth, is at all times tending to augment the incomes of landlords; to give them both a greater amount and a greater proportion of the wealth of the community, independently of any trouble or outlay, incurred by themselves,"[1] and upon the strength of this assertion, he justified the policy of imposing a special tax upon what we have come to call the “unearned increment” of land.  But how far does actual experience bear his assertion out?  In Great Britain we have seen in the last half-century an undoubted increase in urban rents; but over long periods at least, there was a marked fall in both the prices and rents of agricultural land, despite the fact that the country was “increasing in wealth”