The Law of the Limit to Land Productivity and China’s

Using a new concept—the law of the limit to land productivity—this article builds a three (physical, economic, and institutional) worlds’ land-use model with inverse logics of different development stages in a time perspective: before, in, and after the population trap. This model extends the span of the Malthusian population model to history after the Industrial Revolution and makes static property rights theory dynamic. It argues that 1) cost/return ratios decide the effects of land rights; 2) changes in cost/return ratios alter the effects of land rights; and 3) changes in land/labor ratios first alter cost/return ratios and then patterns of land rights. Using this model and statistical data, the article, from the supply side, explores the validity of the concept of China’s “hidden agricultural revolution” advanced by Philip C. C. Huang, and simultaneously tests the model’s inverse logics and dynamic land rights theory. The result is that Douglass North’s property rights theory has reversed the causality of things: although the state can set the property regime, it cannot control what kind of effects will flow from the regime it chooses. Hence the state should select property regimes according to their real effects rather than the effects subjectively derived from North’s “theory.