An Essay on Economic Theory

1.11. The Par Value or Ratio between the Value of Land and Labor

An Essay on Economic Theory by Richard Cantillon
Richard Cantillon

William Petty set off the search for a par value between land and labor. Cantillon provides a theoretical answer (referenced in Adam Smith’s Wealth of Nations) that property owners must provide their labor with the production of at least twice the land necessary to sustain the worker in order that enough children are raised to maintain the workforce over time. The amount of land will actually vary from job to job, person to person, and among different countries and societies. Therefore, the practical circumstances of the world dictate that there is no such “par” value between land and labor, only money— a “most certain measure”—can be used for income measurements and comparisons.

From Part 1: Production, Distribution, and Consumption. Narrated by Millian Quinteros.