Economists like Adam Smith, Prof. Marshall and Ricardo related the law of diminishing marginal production with agriculture. They were of the view that if no improvement is made in agricultural techniques, then by increasing the quantity of labour and capital used on land, there will be less increase in general proportion of total produce. Modern economists do not agree with this concept. According to modem economists, this law applies in the sphere of manufacturing. The supporters of this ideology are economists John Robinson, Benham, Stigler, Bolding, etc.
According to modem economists, this law is ultimately applicable to every field of production. Initially, the production increase law applies, then, the law of equal production, and finally diminishing production law applies. Hence, these economists call this ideology “the law of returns of the variable proportions of means”. This name seems more appropriate, since it explains all the three states of production.
