[12].Forthetenantsincentivetouseanamountofinputlessthanthatstipulatedinasharecontract,seechapter3,ngto”shirking”problemsandenforcementco,apiece-ratecontractwillbepreferredtoawagecon,withpieceratestheworkerisinclinedtobe”sloppy”,apiece-ratecontractwillbelesspreferableifthephysicalattributesofthep,missionpayments(aswithinsurancesalesmen)arepreferredtootherformswhenthevalueofoutputdependsontheintensityofworkpersale;”tipping”payments(asinthecaseofwaitresses)arepreferredtootherformswhenthequalityofservicesissignificant-ineithercase,thecostsofenforcing”intensity”and”quality”ofworkappeartoberelativelyhigh.
[13].Inhorticulture,forexample,theusua,ownermanagementinvo,oneexpectsthatwagecontractswouldbeinfrequentwhenthelandholdingislarge,forhighcostsoflaborsupervisionwouldbeincurred.
[14].,”CapitalAssetPrices:ATheoryofMarketEquilibriumunderConditionsofRisk,”JournalofFinance(September,1964);JackHirshleifer,”InvestmentDecision:Choice-TheoreticApproaches”;andidem,”InvestmentDecisionunderUncertainty:ApplicationsoftheState-PreferenceApproach,”QuarterlyJournalofEconomics(May,1966).”Risk-exchange”modelsderivedfromthecurrentstate-preferenceandmean-varianceapproaches,withtheaidofanEdgeworth-Bowleybox,suggestthatrisksharingispreferred-ifweignoretransactioncosts.
[15].Foratheoreticaltreatmentofassetpricesandriskpremiumsasdeterminedinthemarketplace,seeSharpe,”CapitalAssetPrices.”
[16].ArthurYoung,TravelsinFranceduringtheYears1787,1788,and1789,www.youxs.org.(CambridgeUniversityPress,1929),www.youxs.org.
[17].Tointerprettheexis”farmers”inEngland,”farmers”isasfollows:acollectingagentwhoisallowedtotakethedifferencebetweenwhathecancollectandwhathehastopaytheCrownhasagreater,Ibelieve,iscorrect,andcanbeexpressedalternatively:transactioncostsdiffer,amongotherthings,becausedifferentsetsofstipulationsrequirevaryingeffortsinenforcementandnegotiation;andforcollectiona”farming””farming”agentaswellasan”insuring”agent.
[18].SeeTakekazuOgura,ed.,AgriculturalDevelopmentinModernJapan(Tokyo:JapanFAOAssociation,1963),heintroductionofthepulsorycropinsurance.
[19].See,forexample,www.youxs.org;,”FarmTenancyandProductivityinAgriculture:TheCaseoftheUnitedStates,”FoodResearchInstituteStudies,www.youxs.org(1963).
[20].SeeAppendixB;DepartmentofInternalAffairs,PublicReportsofInternalAffairs,www.youxs.org(1932);LegislativeYuan,StatisticalMonthly2,5(1930);andShu-ChingLee,”TheHeartofChinasProblem,theLandTenureSystems,”JournalofFarmEconomics(October,1946).
www.youxs.org(China,1925-40)
InthisandthefollowingsectionIshallanaementsarechosentodisperseriskbearingandminimizetransactioncost,butalsotof,,butalsoonthefactthatduringthisperiodinChina,some93percentofthefarmlandwasheldunderprivateownership.[1]Letmebeginbytranslatingafewsamplecontractsoffixedrent.
Samplea-fixed(crop)rentcontractwithdefiniteleaseduration(ShantungProvince):
TenantAnowleasesfromlandownerB[somanyacres],withthepresenceofrefereeD,thattheannualrentperacreincludes[somanycatties]ofwheat,and[somanycatties]ofmillet,soybeans,,,rentalpaymentsshallbeadjusted[downward][somanyyears].[2]
Sampleb-fixed(crop)rentcontractwithindefiniteleasedura-tion(KiangsiProvince):
Wecontractuallyestablishaniron-sheet[firmlyfixed]rent……Regardlessofgoodorbadyears,notafractionofrentcanbereduced……Intheeventthattherentalpaymentisreducedordelayed,thelandownerisfreetotakebacktheland,togetherwithallexistingcrops,andtocontractanewtenantforcultivation……Furthermore,thelandownershallpaythetenant20coppercoinsforthedeliveryofevery100cattiesofgrains.[3]
Samplec-fixed(crop)rentcontractwithlandownerprovidingnonlandfarminginputs(TsinghaiProvince):