The Individual Factors of Imputation (continued). II. -- Demand and Complementary Goods In the case of goods for immediate consumption, demand and want coincide: the amount of agricultural produce required for the full satisfaction of personal want forms the demand for agricultural produce. It is otherwise with production goods; here personal want does not always create a demand. If land, of its own accord and without cultivation, were to bring forth fruits in superfluity, there would be no demand for agricultural implements. And likewise, on the other hand, if land refused to make any return, if all land were waste and barren, there would be no demand for agricultural implements, there could be no use for them. A demand for means of production arises only when, on the one hand, we are obliged to employ them or else go without what they produce; and when, on the other hand, we can employ them, inasmuch as we have at our disposal the necessary complementary goods. So long as the complementary goods are wanting, we can, at best, speak of a latent demand; the demand is effective only when we have also acquired the complementary goods.(1*)It follows from this that the effective demand for means of production must vary, not only when there is a variation in personal want, but also when there is a variation in the quantity of complementary goods.(2*) In both directions we must examine the effect upon the imputation, and thus, in looking at demand in the case of production goods, we have a far more complicated causal connection than in the case of consumption goods. We shall find, however, that the law remains the same for both. The contribution imputable to production goods always varies with the demand, just as does the value of consumption goods. If demand increases, from whatever cause, so does the contribution, and, as demand sinks, the contribution sinks with it. To prove this in the shortest manner possible.
First: it may be granted that the effective demand rises when the abundance of complementary goods increases, personal want remaining the same. Suppose e.g. that the amount of agricultural capital and available agricultural labour power increase, and that the effective demand for land also increases thereby, inasmuch as latent demand becomes active; suppose, that is to say, that it is now and henceforth possible, -- so far as depends on complementary goods, -- to cultivate more land and more completely satisfy want. How will this affect the calculation of agricultural return? Evidently there are again several cases which must be distinguished from each other. It may be that the ground will not permit of any further cultivation, so that, in spite of increased facilities in capital and labour, production cannot be extended, -- as might readily happen with vine-growing land in a specially favourable situation. Or the return may increase in perfect proportion with the increase of capital and labour, as we may assume to be possible on the slightly cultivated land of a new colony. Or, finally -- and this is the general rule in old countries -- the return may indeed be increased, but not entirely in proportion to the increase of complementary goods; here indeed all the new capital and labour find employment, but with diminished results.
Different as these cases are, the final result is the same in all, although it comes about in a variety of ways. In every case a larger share of the return will be imputed to the land.
(a) If production cannot be extended, the value of the products remains the same as before, as no reason for change has emerged. What does change is the distribution of the imputation.
