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Ground Rent
Improved land is land that people have modified, either to make agriculture possible or to boost agricultural productivity. Smith argues that land improvement offers the highest profit rate of any capital investment, so all countries should invest primarily in it until all of their farmable land is improved.
Improved Land Quotes in The Wealth of Nations
The The Wealth of Nations quotes below are all either spoken by Improved Land or refer to Improved Land. For each quote, you can also see the other terms and themes related to it (each theme is indicated by its own dot and icon, like this one:
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Book 2, Chapter 1
Quotes
Every fixed capital is both originally derived from, and requires to be continually supported by, a circulating capital. All useful machines and instruments of trade are originally derived from a circulating capital, which furnishes the materials of which they are made, and the maintenance of the workmen who make them. They require, too, a capital of the same kind to keep them in constant repair.
No fixed capital can yield any revenue but by means of a circulating capital. The most useful machines and instruments of trade will produce nothing, without the circulating capital, which affords the materials they are employed upon, and the maintenance of the workmen who employ them. Land, however improved, will yield no revenue without a circulating capital, which maintains the labourers who cultivate and collect its produce.
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Book 3, Chapter 1
Quotes
The inhabitants of the town, and those of the country, are mutually the servants of one another. The town is a continual fair or market, to which the inhabitants of the country resort, in order to exchange their rude for manufactured produce. It is this commerce which supplies the inhabitants of the town, both with the materials of their work, and the means of their subsistence. The quantity of the finished work which they sell to the inhabitants of the country, necessarily regulates the quantity of the materials and provisions which they buy. Neither their employment nor subsistence, therefore, can augment, but in proportion to the augmentation of the demand from the country for finished work; and this demand can augment only in proportion to the extension of improvement and cultivation.
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Improved Land Term Timeline in The Wealth of Nations
The timeline below shows where the term Improved Land appears in The Wealth of Nations. The colored dots and icons indicate which themes are associated with that appearance.
Book 1, Chapter 11
...land produces, minus the tenant’s cost of subsistence. They charge rent even for infertile or unimproved land, and rent prices aren’t proportional to improvements they make to this land, so rent...
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...such areas in the Scottish highlands has tripled in the previous century. Farmers working on improved land can choose to produce either a lot of grain or a little beef, but...
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...profits, and the higher rents that accompany them, only reflect the much higher cost of improving or cultivating land for those other uses—like fruit gardens, enclosed kitchen gardens, and especially vineyards,...
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...Rent.” Besides food, humans’ primary needs are clothing and lodging, which both also require land. Unimproved land can satisfy these needs better than food, but it’s the opposite for improved land....
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...wood starts out at a price of zero, then becomes more expensive as land gets improved and trees become scarcer.
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The point when cattle reach this price is an important milestone for agriculture: manure makes improved agriculture possible, but feeding the cattle needed to produce enough manure is impossible unless land...
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...is in part because hides are more difficult to preserve and transport than wool. In improved countries, policies that reduce wool and/or hide prices naturally raise meat prices, as farmers must...
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...country’s land is dedicated to such livestock, which in turn means that this land is unimproved.
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...of the Chapter.” As a society’s circumstances improve, rents rise and landlords grow more powerful. Land improvement raises the rent directly: the real value of the land’s produce increases, but not of...
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Book 2, Chapter 1
...for profit, and fixed capital, or capital used to improve production processes by buying machines, improving land, and so on. Merchants have only circulating capital. Most tradespeople have mainly circulating capital,...
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...into capital if lent out.) Society’s fixed capital stock comprises machines, buildings that earn revenue, land improvement s, and the talents that people acquire through education and training. Finally, society’s circulating capital...
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Book 3, Chapter 2
These wealthy families generally don’t improve their land , for several reasons: they care more about defense than profit, they lack the necessary...
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...as rivals. Metayers had an incentive to produce as much as possible, but not to improve the land , because this would mean investing their own capital for the landlord’s benefit. Eventually, a...
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Long-term leases give farmers an incentive to improve the land , but they often don’t because landlords can too easily evict them. Yet farmers who...
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Book 3, Chapter 4
...a market for the country’s produce, both rude and manufactured. Second, city merchants bought and improved rural land. Third and most importantly, businesspeople brought order, freedom, and security to the country.
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...raised rents. But they offered the remaining tenants long-term leases, which led those tenants to improve the land and build their own wealth independently. This eroded the landlords’ power and ended their wars,...
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...take their capital to another country—and often do in the case of war or revolution—but land improvement s continue to benefit the country in an enduring way for generations.
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Book 4, Chapter 5
...and labor. But both policies unjustly violated people’s natural liberty. Specifically, the grain policy discouraged land improvement by forcing farmers to split their capital between agriculture and trade. It thus backfired, making...
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Book 4, Chapter 7
...better political institutions. Specifically, they ban the hoarding of land by making possession conditional on improving it, distribute property more equally among heirs rather than giving everything to the firstborn, and...
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By increasing merchants’ profits, the exclusive trade also reduces wages, discourages land improvement , reduces land rents, and raises interest rates in Europe. In short, it benefits merchants...
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Book 4, Chapter 9
...class”), and manufacturers and merchants (or the “unproductive class”). Agriculture requires landlords to invest in improving their land, and farmers in planting and cultivating it, so the cost of these investments—plus...
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...merchants, whose profit rates rise. This draws capital away from agriculture at a stage when land improvement is still the most productive investment for society. Yet just as the human body can...
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Book 5, Chapter 2
...Constant land taxes, like the one in Britain, lead to inequality because some land gets improved, and some does not. Such taxes are easy to collect, and Britain’s has enriched the...
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...tax system would not be very expensive to administer, and it would encourage people to improve their land s (although they should not have to pay taxes on those improvements for the first...
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Proportional land taxes can adapt to changes in land improvement , the economy, and silver prices. Different countries have administered them in diverse ways. Prussia,...
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...a barren land’s produce could be most of their rent. Such taxes discourage landlords from improving their lands and farmers from cultivating them well.
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Book 5, Chapter 3
...the nation’s land and capital from private to public ownership, it reduces landlords’ investment in land improvement s and encourages capital owners to invest in other countries. Thus, every state that has...
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...uncultivated land (like Jamaica) have been the least reliable because planters prefer to invest in land improvement s rather than paying their debts. So while America can afford to pay taxes in...
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