law of production from the soil on which we have so frequently had occasion to expatiate, the law that increased labor, in any given state of agricultural skill, is attended with a less than proportional increase of produce. The cost of production of the fruits of the earth increases, cæteris paribus, with every increase of the demand.
Mr. Cairnes has made some essential contributions to the discussion of changes of value arising from the progress of society:296 “When a colony establishes itself in a new country, the course of its industrial development naturally follows the character of the opportunities offered to industrial enterprise [pg 481] by the environment. These will, of course, vary a good deal, according to the part of the world in which the new society happens to be placed; but, speaking broadly, they will be such as to draw the bulk of the industrial activity of the new people into some one or more of those branches of industry which have been conveniently designated ‘extractive.’ Agriculture, pastoral and mining pursuits, and the cutting of lumber, are among the principal of such industries.” To these pursuits apply “that law of Political Economy, or, more properly, of physical nature, which Mr. Mill has rightly characterized as the most important proposition in economic science—the law, as he phrased it, of ‘diminishing productiveness.’ It may be thus briefly stated: In any given state of the arts of production, the returns to human industry employed upon natural agents will, up to a certain point, be the maximum which those natural agents, cultivated with the degree of skill brought to bear upon them, are capable of yielding; but, after this point has been passed, though an increased application of labor and capital will obtain an increased return, it will not obtain a proportionally increased return; on the contrary, every further increase