Diminishing Returns in View of Progress in Agricultural Production

Abstract

Although the State of Iowa was fully settled by 1890, it has since then doubled its crop production, notwithstanding a 20 per cent decline in farm population.2 The increased productivity of the farm people of Iowa is, I believe, an instance of general significance for undoubtedly what has taken place in Iowa is to a degree characteristic of the development of much of the agriculture of the United States. In this paper I want to give the results of a study of Iowa crop production and as the subject indicates, to comment upon certain aspects of the phenomenon of diminishing Because of the nature of the study the discussion will be restricted to its secular interpretation which is, in the opinion of many economists, the most important phase of the law of diminishing returns. We might ask is it reasonable to look upon agriculture as being peculiarly subject to diminishing returns in view of the greater efficiency of farm people, the technical developments in farm production and the resultant food surpluses which have for some time depressed the agriculture of the world? When we consider the changes that time has wrought in farming methods and note the increase in the area of land that has become submarginal and observe the decline that has taken place in the purchasing power of land values, do we not have to conclude that these are prima facie evidences of increasing instead of diminishing returns? More specifically, however, I should like to raise the question whether or not the experience of agriculture, since the appearance of the first edition of Marshall's Principles, which is the period covered by the crop statistics of this study, tends to invalidate the admirable and well qualified interpretation which