he way of one another. At least, this scenario is what the law of diminishing returns predicts will occur.
Development of the Law of Diminishing Returns
The first clear enunciation of the concept upon which the law of diminishing returns is based was presented by the French physiocrat Anne Robert Jacques Turgot in 1726 (Brue, 1993, p. 186). Turgot was concerned with the addition of capital inputs to production from a fixed amount of land.
Later in the eighteenth century, James Anderson of Scotland, in 1777, "published a pamphlet that clearly stated the principle of diminishing returns, albeit in an embryonic form" (Ekelund & Hebert, 1991, pp. 124-125). Anderson made more direct reference to the factors of production involved in economic endeavor and analysis than did Turgot.
In the second decade of the nineteenth century, in 1815, four economists·Edward West, Thomas Malthus, Robert Torrens, and David Ricardo·separately published versions of the law of diminishing returns (Brue, 1993, p. 186). Each of these versions of the law of diminishing returns was applied to land rent. Each of these versions of the law of diminishing returns was developed in response to investigations and actions by the British parliament with respect to grain prices that had risen sharply as a result of the disruption of international trade by the Napoleonic Wars. The primary action that spurred the development of these versions of the law of diminishing returns was the enactment of the so-called "Corn Law" (Ekelund & Hebert, 1991, p. 125).
As a consequence of the interruption in international trade, British corn prices rose on the average 18 percent per year from 1790 through 1810. Land rents increased during the period to the point where the best interest of land owners were served by a continuation of the restrictions on grain imports. Parliament enacted the Corn Law that in effect did the bidding of the land owners. Thus, arose the ...