"After all the fertile land in the immediate neighbourhood of the first settlers were cultivated, if capital and population increased, more food would be required, and it could only be procured from land not so advantageously situated"

David Ricardo’s analysis explores how economic growth interacts with the availability and quality of land, a foundational resource in agricultural societies. He observes that when settlers first arrive in a new area, they inevitably occupy and cultivate the most fertile, accessible tracts of land. These lands are advantageous not only because their natural productivity yields greater crops with less effort, but also because their locations lower transportation and labor costs. However, population growth and the accumulation of capital, tools, machines, and investment, create higher demand for food and agricultural products over time.

As the demand for food rises due to increased population and wealth, these prime lands can no longer satisfy society’s expanding needs on their own. To produce more, new land must be brought into cultivation. However, these additional lands tend to be less fertile, located farther from population centers or water sources, have poorer soils, or present other challenges that make cultivation more costly and less productive. Each new parcel of land brought into use yields less output relative to the original, best lands.

This progression leads to what Ricardo would later term "diminishing returns". While technological improvements and added capital can help increase productivity, they have diminishing impact once inferior lands are in use. More effort and resources must be expended to grow the same amount of food, and the cost of food tends to rise, affecting wages, profits, and economic growth across the society. These laws of land use and diminishing returns have far-reaching implications for the distribution of income, land rents, and long-term economic sustainability, suggesting intrinsic limits on growth based solely on expanding land cultivation rather than improving productivity. Ricardo’s insight lays the groundwork for understanding how resource scarcity and economic pressures shape agricultural economies and ultimately influence wider social and economic development.