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• Introduction
• Principles of Political Economy
• Introduction
• Chapter I: On the Definitions of Wealth and Productive Labour
• Chapter II: On the Nature and Measures of Value
• Chapter III: Of the Rent of Land
• Chapter IV: Of the Wages of Labour
• Chapter V: Of the Profits of Capital
• Chapter VI: Of the Distinction Between Wealth and Value
• Chapter VII: On the Immediate Causes of the Progress of Wealth

chapter iii

Of the Rent of Land

section i

Of the Nature and Causes of Rent

The rent of land may be defined to be that portion of the value of the whole produce which remains to the owner of the land, after all the outgoings belonging to its cultivation, of whatever kind, have been paid, including the profits of the capital employed, estimated according to the usual and ordinary rate of the profits of agricultural stock at the time being.

It sometimes happens that, from accidental and temporary circumstances, the farmer pays more, or less, than this; but this is the point towards which the actual rents paid are constantly gravitating, and which is therefore always referred to when the term is used in a general sense.

Rent then being the excess of price above what is necessary to pay the wages of the labour and the profits of the capital employed in cultivation, the first object which presents itself for inquiry, is, the cause or causes of this excess of price.

After very careful and repeated revisions of the subject, I do not find myself able to agree entirely | i the view taken of it, either by Adam Smith, or the Economists; and still less, by some more modern writers.

Almost all these writers appear to me to consider rent as too nearly resembling, in its nature, and the laws by which it is governed, that excess of price above the cost of production, which is the characteristic of a common monopoly.

Adam Smith, though in some parts of the eleventh chapter of his first book he contemplates rent quite in its true light,* and has interspersed through his work more just observations on the subject than any other writer, has not explained the most essential cause of the high price of raw produce with sufficient distinctness, though he often touches on it; and by applying occasionally the term monopoly to the rent of land, without stopping to mark its more radical peculiarities, he leaves the reader without a definite impression of the real difference between the cause of the high price of the necessaries of life, and of monopolized commodities. |

Some of the views which the Economists have taken of the nature of rent appear to me also, to be quite just; but they have mixed them with so much error, and have drawn such unwarranted inferences from them, that what is true in their doctrines has produced little effect. Their great practical conclusion, namely, the propriety of taxing exclusively the neat rents of the landlords, evidently depends upon their considering these rents as completely disposeable, like that excess of price above the cost of production, which distinguishes a common monopoly.

M. Say, in his valuable Treatise on Political Economy, in which he has explained with great clearness many points not sufficiently developed by Adam Smith, has not treated the subject of rent in a manner entirely satisfactory. In speaking of the different natural agents which, as well as the land, co-operate with the labours of man, he observes: “Heureusement personne n’a pu dire, le vent et le soleil m’appartiennent, et le service qu’ils rendent doit m’être paye´.”* And, though he acknowledges that, for obvious reasons, property in land is necessary, yet he evidently considers rent as almost exclusively owing to such appropriation, and to external demand. (45)

In the excellent work of M. de Sismondi, De la Richesse Commerciale, he says, in a note on the | subject of rent: “Cette partie de la rente foncière est celle que les Economistes ont de´core´e du nom du produit net, comme e´tant le seul fruit du travail qui ajoutât quelque chose à la richesse nationale. On pourroit, au contraire, soutenir contre eux, que c’est la seule partie du produit du travail, dont la valeur soit purement nominale, et n’ait rien de re´elle: c’est en effet le re´sultat de l’augmentation de prix qu’obtient un vendeur en vertu de son privilège, sans que la chose vendue en vaille re´ellement davantage.”†

The prevailing opinions among the more modern writers in our own country have appeared to me to incline towards a similar view of the subject; and, not to multiply citations, I shall only add, that in a very respectable edition of the Wealth of Nations, lately published by Mr. Buchanan, of Edinburgh, the idea of monopoly is pushed still farther. And, while former writers, though they considered rent as governed by the laws of monopoly, were still of opinion that this monopoly in the case of land was necessary and useful, Mr. Buchanan sometimes speaks of it even as prejudicial, and as depriving the consumer of what it gives to the landlord. (46)

In treating of productive and unproductive labour in the last volume, he observes, that,‡ “The neat surplus by which the Economists estimate the utility of agriculture, plainly arises from the high price of its produce, which, however advantageous | to the landlord who receives it, is surely no advantage to the consumer who pays it. Were the produce of agriculture to be sold for a lower price, the same neat surplus would not remain, after defraying the expenses of cultivation; but agriculture would be still equally productive to the general stock; and the only difference would be, that, as the landlord was formerly enriched by the high price, at the expense of the community, the community will now profit by the low price, at the expense of the landlord. The high price in which the rent or neat surplus originates, while it enriches the landlord who has the produce of agriculture to sell, diminishes, in the same proportion, the wealth of those who are its purchasers; and on this account it is quite inaccurate to consider the landlord’s rent as a clear addition to the national wealth.”

In other parts of this work he uses the same, or even stronger language, and in a note on the subject of taxes, he speaks of the high price of the produce of land as advantageous to those who receive it, but proportionably injurious to those who pay it. “In this view,” he adds, “it can form no general addition to the stock of the community, as the neat surplus in question is nothing more than a revenue transferred from one class to another, and, from the mere circumstance of its thus changing hands, it is clear that no fund can arise out of which to pay taxes. The revenue which pays for the produce of land exists already in the hands of those who purchase that produce; | and, if the price of subsistence were lower, it would still remain in their hands, where it would be just as available for taxation, as when by a higher price it is transferred to the landed proprietor.”*

That there are some circumstances connected with rent, which have a strong affinity to a natural monopoly, will be readily allowed. The extent of the earth itself is limited, and cannot be enlarged by human demand. The inequality of soils occasions, even at an early period of society, a comparative scarcity of the best lands; and this scarcity is undoubtedly one of the causes of rent properly so called. On this account, perhaps the term partial monopoly may be fairly applicable to it. But the scarcity of land, thus implied, is by no means alone sufficient to produce the effects observed. And a more accurate investigation of the subject will shew us how different the high price of raw produce is, both in its nature and origin, and the laws by which it is governed, from the high price of a common monopoly.

The causes of the excess of the price of raw produce above the costs of production, may be stated to be three.

First, and mainly, That quality of the earth, by which it can be made to yield a greater portion of the necessaries of life than is required for the maintenance of the persons employed on the land. (47)

2dly, That quality peculiar to the necessaries of life of being able, when properly distributed, to | create their own demand, or to raise up a number of demanders in proportion to the quantity of necessaries produced. (48)

And, 3dly, The comparative scarcity of fertile land, either natural or artificial.

The quality of the soil here noticed as the primary cause of the high price of raw produce, is the gift of nature to man. It is quite unconnected with monopoly, and yet is so absolutely essential to the existence of rent, that without it no degree of scarcity or monopoly could have occasioned an excess of the price of raw produce above what was necessary for the payment of wages and profits.

If, for instance, the soil of the earth had been such, that, however well directed might have been the industry of man, he could not have produced from it more than was barely sufficient to maintain those whose labour and attention were necessary to its products; though, in this case, food and raw materials would have been evidently scarcer than at present, and the land might have been in the same manner monopolized by particular owners; yet it is quite clear, that neither rent nor any essential surplus produce of the land in the form of high profits and high wages could have existed. (49)

On the other hand, it will be allowed, that in whatever way the produce of a given portion of land may be actually divided, whether the whole is distributed to the labourers and capitalists, or a part is awarded to a landlord, the power of such land to yield rent is exactly proportioned to its fertility, or to the general surplus which it can be | made to produce beyond what is strictly necessary to support the labour and keep up the capital employed upon it. If this surplus be as 1, 2, 3, 4, or 5, then its power of yielding a rent will be as 1, 2, 3, 4, or 5; and no degree of monopoly—no possible increase of external demand can essentially alter their different powers.

But if no rent can exist without this surplus, and if the power of particular soils to pay rent be proportioned to this surplus, it follows that this surplus from the land, arising from its fertility, must evidently be considered as the foundation or main cause of all rent.

Still however, this surplus, necessary and important as it is, would not be sure of possessing a value which would enable it to command a proportionate quantity of labour and other commodities, if it had not a power of raising up a population to consume it, and, by the articles produced in return, of creating an effective demand for it. (50)

It has been sometimes argued, that it is mistaking the principle of population to imagine, that the increase of food or of raw produce alone can occasion a proportionate increase of population. This is no doubt true; but it must be allowed, as has been justly observed by Adam Smith, that “when food is provided, it is comparatively easy to find the necessary clothing and lodging.” And it should always be recollected, that land does not produce one commodity alone, but, in addition to that most indispensable of all commodities—food, | it produces the materials for clothing, lodging, and firing.*

It is therefore strictly true, that land produces the necessaries of life—produces the means by which, and by which alone, an increase of people may be brought into being and supported. In this respect it is fundamentally different from every other kind of machine known to man; and it is natural to suppose that the use of it should be attended with some peculiar effects.

If an active and industrious family were possessed of a certain portion of land, which they could cultivate so as to make it yield food, and the materials of clothing, lodging, and firing, not only for themselves but for five other families, it follows, from the principle of population, that, if they properly distributed their surplus produce, they would soon be able to command the labour of five other families, and the value of their landed produce would soon be worth five times as much as the value of the labour which had been employed in raising it. But if, instead of a portion of land | which would yield all the necessaries of life, they possessed only, in addition to the means of their own support, a machine which would produce hats or coats for fifty people besides themselves, no efforts which they could make would enable them to ensure a demand for these hats or coats, and give them in return a command over a quantity of labour considerably greater than their fabrication had cost. For a long time, and by possibility for ever, the machine might be of no more value than that which would result from its making hats or coats for the family. Its further powers might be absolutely thrown away from the want of demand; and even when, from external causes totally independent of any efforts of their own, a population had risen to demand the fifty hats, the value of them in the command of labour and other commodities might permanently exceed but very little the value of the labour employed in making them. (51)

After the new cotton machinery had been introduced into this country, a hundred yards of muslin of a certain quality would not probably command more labour than twenty-five yards would before; because the supply had increased faster than the demand, and there was no longer a demand for the whole quantity produced at the same price. But after great improvements in agriculture have been adopted upon a limited tract of land, a quarter of wheat will in a short time command just as much labour as before; because the increased produce, occasioned by the improvements in cultiva-|tion, is found to create a demand proportioned to the supply, which must still be limited; and the value of corn is thus prevented from falling like the value of muslins.

Thus the fertility of the land gives the power of yielding a rent, by yielding a surplus quantity of necessaries beyond the wants of the cultivators; and the peculiar quality belonging to the necessaries of life, when properly distributed, tends strongly and constantly to give a value to this surplus by raising up a population to demand it.

These qualities of the soil and of its products have been, as might be expected, strongly insisted upon by the Economists in different parts of their works; and they are evidently admitted as truths by Adam Smith, in those passages of the Wealth of Nations, in which he approaches the nearest to the doctrines of the Economists. But modern writers have in general been disposed to overlook them, and to consider rent as regulated upon the principles of a common monopoly, although the distinction is of great importance, and appears obvious and striking in almost any instance that we can assume.

If the fertility of the mines of the precious metals all over the world were diminished one half, it will be allowed that, as population and wealth do not necessarily depend upon gold and silver, such an event might not only be consistent with an undiminished amount of population and wealth, but even with a considerable increase of both. In this case however it is quite certain | that the rents, profits, and wages paid at the different mines in the world might not only not be diminished, but might be considerably increased. But if the fertility of all the lands in the world were to be diminished one half;* inasmuch as population and wealth strictly depend upon the quantity of the necessaries of life which the soil affords, it is quite obvious that a great part of the population and wealth of the world would be destroyed, and with it a great part of the effective demand for necessaries. (52) The largest portion of the lands in most countries would be thrown completely out of cultivation, and wages, profits, and rents, particularly the latter, would be greatly diminished on all the rest. I believe there is hardly any land in this country employed in producing corn, which yields a rent equal in value to the wages of the labour and the profits of the stock necessary to its cultivation. If this be so, then, in the case supposed, | the quantity of produce being only half of what was before obtained by the same labour and capital, it may be doubted whether any land in England could be kept in tillage. All effective demand for corn of home growth would be at an end; and if a supply could not be obtained from abroad, the population of the country must be diminished to perhaps one-fifth of its former amount.

The produce of certain vineyards in France, which, from the peculiarity of their soil and situation, exclusively yield wine of a certain flavour, is sold, of course, at a price very far exceeding the cost of production. And this is owing to the greatness of the competition for such wine, compared with the scantiness of its supply, which confines the use of it to so small a number of persons that they are able, and, rather than go without it, willing to give an excessively high price. But, if the fertility of these lands were increased so as very considerably to increase the produce, this produce might so fall in value as to diminish most essentially the excess of its price above the cost of production. While, on the other hand, if the vineyards were to become less productive, this excess might increase to almost any extent.* |

The obvious cause of these effects is, that, in all common monopolies, the demand is exterior to, and independent of, the production itself. The number of persons, who might have a taste for scarce wines, and would be desirous of entering into a competition for the purchase of them, might increase almost indefinitely, while the produce itself was decreasing; and its price, therefore, would have no other limit than the numbers, powers, and caprices of the competitors for it.

In the production of the necessaries of life, on the contrary, the demand is dependent on the produce itself, and the effects are therefore widely different. In this case it is physically impossible that the number of demanders should increase, while the quantity of produce diminishes, since the demanders can only exist by means of the produce. (54)

In all common monopolies, an excess of the value of the produce above the value of the labour employed in obtaining it, may be created by external demand. In the partial monopoly of the land which produces necessaries, such an excess can only be created by the qualities of the soil. (55)

In common monopolies, and all productions except necessaries, the laws of nature do very little towards proportioning their value in exchange to their value in use. The same quantity of grapes or cottons might, under different circumstances, be worth permanently three or three hundred days la-|bour. In the production of necessaries alone, the laws of nature are constantly at work to regulate their exchangeable value according to their value in use; and though from the great difference of external circumstances, and particularly the greater plenty or scarcity of land, this is seldom or ever fully effected; yet the exchangeable value of a given quantity of necessaries in commanding labour always tends to approximate towards the value of the quantity of labour which it can maintain, or in other words, to its value in use. (56)

In all common monopolies, the price of the produce, and consequently the excess of price above the cost of production, may increase without any definite bounds. In the partial monopoly of the land which produces necessaries, the price of the produce cannot by any possibility exceed the value of the labour which it can maintain; and the excess of its price above the cost of its production is subjected to a limit as impassable. This limit is the surplus of necessaries which the land can be made to yield beyond the lowest wants of the cultivators, and is strictly dependent upon the natural or acquired fertility of the soil. Increase this fertility, the limit will be enlarged, and the land may yield a high rent; diminish it, the limit will be contracted, and a high rent will become impossible; diminish it still further, the limit will coincide with the cost of production, and all rent will disappear. (57)

In short, in the one case, the power of the produce to exceed in price the cost of the production depends mainly upon the degree of the monopoly; | in the other, it depends entirely upon the degree of fertility. This is surely a broad and striking distinction.*

Is it, then, possible to consider the price of the necessaries of life as regulated upon the principle of a common monopoly? Is it possible, with M. de Sismondi, to regard rent as the sole produce of labour, which has a value purely nominal, and the mere result of that augmentation of price which a seller obtains in consequence of a peculiar privilege: or, with Mr. Buchanan, to consider it as no addition to the national wealth, but merely as a transfer of value, advantageous only to the landlords, and proportionably injurious to the consumers?†

Is it not, on the contrary, a clear indication of a most inestimable quality in the soil, which God has bestowed on man—the quality of being able to maintain more persons than are necessary to work it? Is it not a part, and we shall see farther on that it is an absolutely necessary part, of that surplus produce from the land, which has been justly stated to be the source of all power and enjoyment; and without which, in fact, there would | be no cities, no military or naval force, no arts, no learning, none of the finer manufactures, none of the conveniences and luxuries of foreign countries, and none of that cultivated and polished society, which not only elevates and dignifies individuals, but which extends its beneficial influence through the whole mass of the people?

section ii

On the necessary Separation of the Rent of Land from the Profits of the Cultivator and the Wages of the Labourer

In the early periods of society, or more remarkably perhaps, when the knowledge and capital of an old society are employed upon fresh and fertile land, the surplus produce of the soil shews itself chiefly in extraordinary high profits, and extraordinary high wages, and appears but little in the shape of rent. While fertile land is in abundance, and may be had by whoever asks for it, nobody of course will pay a rent to a landlord. But it is not consistent with the laws of nature, and the limits and quality of the earth, that this state of things should continue. Diversities of soil and situation must necessarily exist in all countries. All land cannot be the most fertile: all situations cannot be the nearest to navigable rivers and markets. But the accumulation of capital beyond the means of employing it on land of the greatest natural fertility, and the most advanta-|geously situated, must necessarily lower profits; while the tendency of population to increase beyond the means of subsistence must, after a certain time, lower the wages of labour.

The expense of production will thus be diminished; but the value of the produce, that is, the quantity of labour, and of the other products of labour (besides corn) which it can command, instead of diminishing, will be increased. There will be an increasing number of people demanding subsistence, and ready to offer their services in any way in which they can be useful. The exchangeable value of food will therefore be in excess above the cost of production, on all the more fertile lands; and this excess is that portion of the general surplus derived from land which has been peculiarly denominated rent.

The quality of the earth first mentioned, or its power to yield a greater portion of the necessaries of life than is required for the maintenance of the persons employed in cultivation, is obviously the foundation of this rent, and the limit to its possible increase. The second quality noticed, or the tendency of an abundance of food to increase population, is necessary both to give a value to the surplus of necessaries which the cultivators can obtain on the first land cultivated; and also to create a demand for more food than can be procured from the richest lands. And the third cause, or the comparative scarcity of fertile land, which is clearly the natural consequence of the second, is finally necessary to separate a portion of the ge-|neral surplus from the land, into the specific form of rent to a landlord.*

Nor is it possible that rents should permanently remain as parts of the profits of stock, or of the wages of labour. (60) If profits and wages were not to fall, then, without particular improvements in cultivation, none but the very richest lands could be brought into use. The fall of profits and wages which practically takes place, undoubtedly transfers a portion of produce to the landlord, and forms a part, though, as we shall see farther on, only a part of his rent. But if this transfer can be considered as injurious to the consumers, then every increase of capital and population must be considered as injurious; and a country which might maintain well ten millions of inhabitants ought to be kept down to a million. The transfer from profits and wages, and such a price of produce as yields | rent, which have been objected to as injurious, and as depriving the consumer of what it gives to the landlord, are absolutely necessary in order to obtain any considerable addition to the wealth and revenue of the first settlers in a new country; and are the natural and unavoidable consequences of that increase of capital and population for which nature has provided in the propensities of the human race.

When such an accumulation of capital takes place on the lands first chosen, as to render the returns of the additional stock employed less than could be obtained from inferior land,* it must evidently answer to cultivate such inferior land. But the cultivators of the richer land, after profits had fallen, if they paid no rent, would cease to be mere farmers, or persons living upon the profits of agricultural stock; they would evidently unite the characters of landlords and farmers—a union by no means uncommon, but which does not alter in any degree the nature of rent, or its essential separation from profits and wages.

If the profits of stock on the inferior land taken into cultivation were thirty per cent. and portions of the old land would yield forty per cent., ten per cent. of the forty would obviously be rent by whomsoever received. When capital had further accumulated, | and labour fallen† on the more eligible lands of a country, other lands, less favourably circumstanced with respect of fertility or situation, might be occupied with advantage. The expense of cultivation, including profits, having fallen, (62) poorer land, or land more distant from rivers and markets, though yielding at first no rents, might fully repay these expenses, and fully answer to the cultivator. And again, when either the profits of stock, or the wages of labour, or both, have still further fallen, land still poorer or still less favourably situated, might be taken into cultivation. And at every step it is clear, that if the price of produce do not fall, the rent of land must rise. (63) And the price of produce will not fall so long as the industry and ingenuity of the labouring classes, assisted by the capitals of those not employed upon the land, can find something to give in exchange to the cultivators and landlords, which will stimulate them to continue undiminished their agricultural exertions, and maintain their excess of produce. |

It may be laid down, therefore, as an incontrovertible truth, that as a nation reaches any considerable degree of wealth, and any considerable fullness of population, the separation of rents, as a kind of fixture upon lands of a certain quality, is a law as invariable as the action of the principle of gravity; (64) and that rents are neither a mere nominal value, nor a value unnecessarily and injuriously transferred from one set of people to another; but a most real and essential part of the whole value of the national property, and placed by the laws of nature where they are, on the land, by whomsoever possessed, whether by few or many, whether by the landlord, the crown, or the actual cultivator.

This then is the mode in which rent would separate itself from profits and wages, in a natural state of things, the least interrupted by bad government, or any kind of unnecessary monopoly; but in the different states in which mankind have lived, it is but too well known that bad government and unnecessary monopolies have been frequent; and it is certain that they will essentially modify this natural progress, and often occasion a premature formation of rent.

In most of the great eastern monarchies, the sovereign has been considered in the light of the owner of the soil. This premature monopoly of the land joined with the two properties of the soil, and of its products first noticed, has enabled the government to claim, at a very early period, a certain portion of the produce of all cultivated land; and under whatever name this may be taken, it is | essentially rent. It is an excess both of the quantity, and of the exchangeable value of what is produced above the actual costs of cultivation. (65)

But in most of these monarchies there was a great extent of fertile territory; the natural surplus of the soil was very considerable; and while the claims upon it were moderate, the remainder was sufficient to afford such ample profits and wages as could not be obtained in any other employment, (66) and would allow of a rapid increase of population.

It is obvious, however, that it is in the power of a sovereign who is owner of the soil in a very rich territory to obtain, at an early stage of improvement, an excessive rent. (67) He might, almost from the first, demand all that was not necessary to allow of a moderate increase of the cultivators, which, if their skill was not deficient, would afford him a larger proportion of the whole produce in the shape of a tax or rent, than could probably be obtained at any more advanced period of society; but then of course only the most fertile lands of the country could be cultivated; and profits, wages and population would come to a premature stop.

It is not to be expected that sovereigns should push their rights over the soil to such an extreme extent, as it would be equally contrary to their own interest, and to that of their subjects; but there is reason to believe that in parts of India, and many other eastern countries, and probably even in China, the progress of taxation on the land, founded upon the sovereign’s right to the soil, together with other customary payments out of the raw produce, have | forcibly and prematurely lowered the profits of stock, and the wages of labour on the land, and have thrown great obstacles in the way of progressive cultivation and population in latter times, while much good land has remained waste. This will always be the case, when, owing to an unnecessary monopoly, a greater portion of the surplus produce is taken in the shape of rent or taxes, than would be separated by the natural fall of profits and wages. But whatever may be the nature of the monopoly of land, whether necessary or artificial, it will be observed that the power of paying a rent or taxes on the land, is completely limited by its fertility; and those who are disposed to underrate the importance of the two first causes of rent which I have stated, should look at the various distributions of the produce in kind which take place in many parts of India, where, when once the monopoly has enabled the sovereign to claim the principal part of the rent of the soil, every thing else obviously depends upon the surplus of necessaries which the land yields, and the power of these necessaries to command labour (68) .

It may be thought, perhaps, that rent could not be forcibly and prematurely separated from profits and wages so as unnaturally to reduce the latter, because capital and labour would quit the land if more could be made of them elsewhere; but it should be recollected, that the actual cultivators of the soil in these countries are generally in a very low and degraded condition; that very little capital is employed by them, and scarcely any which they | can remove and employ in another business; that the surplus produce possessed by the government soon raises up a population to be employed by it, so as to keep down the price of labour in other departments to the level of the price in agriculture; and that the small demand for the products of manufacturing and commercial industry, owing to the poverty of the great mass of society, affords no room for the employment of a large capital, with high profits in manufactures and commerce. (69) On account of these causes which tend to lower profits, and the difficulty of collecting money, and the risk of lending it which tend to raise interest, I have long been of opinion, that though the rate of interest in different countries is almost the only criterion from which a judgment can be formed of the rate of profits; yet that in such countries as India and China, and indeed in most of the eastern and southern regions of the globe, it is a criterion subject to the greatest uncertainty. In China, the legal interest of money is three per cent. per month.* But it is impossible to suppose, when we consider the state of China, so far as it is known to us, that capital employed on land can yield profits to this amount; or, indeed, that capital can be employed in any steady and well-known trade with such a return.

In the same way extraordinary accounts have been given of the high rate of interest in India; | but the state of the actual cultivators completely contradicts the supposition, that, independently of their labour, the profits upon their stock is so considerable; and the late reduction of the government paper to six per cent. fully proves that, in common and peaceable times, the returns of capital, which can be depended upon in other sorts of business, are by no means so great as to warrant the borrowing at a very high rate of interest.

It is probable that, with the exception of occasional speculations, the money that is borrowed at the high rates of interest noticed in China and India, is borrowed in both countries, rather with a view to expenditure or the payment of debts, than with a view to profit.

Some of the causes, which have been noticed as tending prematurely and irregularly to raise rents and lower profits in the countries of the east, operated without doubt to a certain extent in the early stages of society in Europe. At one period most of the land was cultivated by slaves, and in the metayer systems which succeeded, the division of the crop was so arranged as to allow the cultivator but little more than a scanty subsistence. In this state of things the rate of profits on the land could have but little to do with the general rate of profits. The peasant could not, without the greatest difficulty, realize money and change his profession; and it is quite certain that no one who had accumulated a capital in manufactures and commerce, would employ it in cultivating the lands of others as a metayer. There would thus be little or no | interchange of capital between trade and agriculture, and their profits might in consequence be very unequal.

It is probable however, as in the case of China and India above mentioned, that profits would not be excessively high. This would depend indeed mainly upon the supply of capital in manufactures and commerce; if capital were scarce, compared with the demand for the products of these kinds of industry, profits would certainly be high; (70) and all that can be said safely is, that we cannot infer that they were very high, from the very high rates of interest occasionally mentioned.

Rent then has been traced to the same common nature with that general surplus from the land, which is the result of certain qualities of the soil and its produce; and it has been found to commence its separation from profits and wages, as soon as they begin to fall from the scarcity of fertile land whether occasioned by the natural progress of a country towards wealth and population, or by any premature and unnecessary monopoly of the soil.

section iii

Of the Causes which tend to raise Rents in the ordinary Progress of Society

In tracing more particularly the laws which govern the rise and fall of rents, the main causes | which diminish the expenses of cultivation, or reduce the costs of the instruments of production, compared with the price of produce, require to be more specifically enumerated. The principal of these seem to be four:—1st, Such an accumulation of capital as will lower the profits of stock; (71) 2dly, such an increase of population as will lower the wages of labour; (72) 3dly, such agricultural improvements, or such increase of exertions as will diminish the number of labourers necessary to produce a given effect; (73) and 4thly, such an increase in the price of agricultural produce, from increased demand, as, without nominally lowering the expense of production, will increase the difference between this expense and the price of produce.

If capital increases so as to become redundant in those departments where it has been usually employed with a certain rate of profits, it will not remain idle, but will seek employment either in the same or other departments of industry, although with inferior returns, and this will tend to push it upon less fertile soils.

In the same manner, if population increases faster than the demand for it, the labourers must content themselves with a smaller quantity of necessaries; and, the expense of labour in kind being thus diminished, land may be cultivated which could not have been cultivated before. (74) .

The two first causes, however, here mentioned sometimes act so as to counterbalance one another. An increase of capital raises the wages of labour, and a fall of wages raises the profits of stock; but | these are only temporary effects. In the natural and regular progress of a country towards the accumulation of stock and the increase of population, the rate of profits and the real wages of labour permanently fall together. This may be effected by a permanent rise in the money price of corn, accompanied by a rise, but not a proportionate rise, in the money wages of labour. The rise in the money price of corn is counterbalanced to the cultivator by the diminished quantity of produce obtained by the same capital; and his profits, as well as those of all other capitalists, are diminished, by having to pay out of the same money returns higher money wages; while the command of the labourer over the necessaries of life is of course contracted by the inadequate rise of the price of labour compared with the price of corn.

But this exact and regular rise in the money price of corn and labour is not necessary to the fall of profits; indeed it will only take place in the regular way here described, when money, under all the changes to which a country is subjected, remains of the same value, according to the supposition of Mr. Ricardo,* a case which may be said never to happen. Profits may undoubtedly fall, and rent be separated, under any variations of the value of money. All that is necessary to the most regular and permanent fall of profits (and in this Mr. Ricardo would agree with me) is, that an increased proportion of the value of the whole produce obtained by a given quantity of capital, should be absorbed by labour. On the land, this | is effected by a diminution of the produce, obtained by the same capital without a proportionate diminution of the part absorbed by labour, which leaves less for profits, at the same time that the real wages of the labourer are diminished. (75) But it is obvious that if a smaller quantity of the necessaries of life derived from a given capital employed on the land, be sufficient to supply both the capitalist and the labourer,† the expenses of cultivation will be diminished, poorer land may be cultivated under the new rates of wages and profits, and rent will rise on that which was before in cultivation. (77)

The third cause enumerated as tending to raise rents by lowering the expenses of cultivation compared with the price of the produce is, such agricultural improvements or such increase of exertions, as will diminish the number of labourers necessary to produce a given effect. (78)

In improving and industrious countries, not deficient in stimulants, this is a cause of great efficacy. If the improvements introduced were of such a nature as considerably to diminish the costs of | production, without increasing in any degree the quantity of produce, then, as it is quite certain that no alteration would take place in the price of corn, the extravagant profits of the farmers would soon be reduced by the competition of capitals from manufactures and commerce; and as the whole arena for the employment of capital would rather have been diminished than increased, profits on land as well as elsewhere would soon be at their former level, and the increased surplus from the diminished expenses of cultivation would go to increase the rents of the landlords. (79)

But if these improvements, as must always be the case, would facilitate the cultivation of new land, and the better cultivation of the old with the same capital, more corn would certainly be brought to market. This would lower its price; but the fall would be of short duration. The operation of that important cause noticed in the early part of this chapter, which distinguishes the surplus produce of the land from all others, namely, the power of the necessaries of life, when properly distributed, to create their own demand, or in other words the tendency of population to press against the means of subsistence, would soon raise the prices of corn and labour, and reduce the profits of stock to their former level, while in the mean time every step in the cultivation of poorer lands facilitated by these improvements, and their application to all the lands of a better quality before cultivated, would universally have raised rents: and thus, under an improving system of cultivation, rents might continue rising without any rise in the exchangeable | value of corn, or any fall in the real wages of labour, or the general rate of profits. (80)

The very great improvements in agriculture which have taken place in this country are clearly demonstrated by the profits of stock being as high now as they were nearly a hundred years ago, when the land supported but little more than half of its present population. And the power of the necessaries of life, when properly distributed, to create their own demand is fully proved by the palpable fact, that the exchangeable value of corn in the command of labour and other commodities is, to say the least, undiminished, notwithstanding the many and great improvements which have been successively introduced in cultivation, both by the introduction of better implements, and by an improved system of managing the land. (81) In fact, these improvements have gone wholly to the increase of rents and the payment of taxes.

It may be added that, when improvements are introduced in particular districts, which tend to diminish the costs of production, the advantages derived from them go immediately, upon the renewal of leases, to landlords, as the profits of stock must necessarily be regulated by competition, according to the general average of the whole country. (82) Thus the very great agricultural improvements which have taken place in some parts of Scotland, the north of England, and Norfolk, have raised, in a very extraordinary manner, the rents of those districts, and left profits where they were.166 It must be allowed then, that facility of pro-|duction in necessaries,* unlike facility of production in all other commodities, is never attended with a permanent fall of price. They are the only commodities of which it can be said that their permanent value in the command of labour is nearly proportioned to their quantity. And consequently, in the actual state of things, all savings in the cost of producing them will permanently increase the surplus which goes to rent.

The fourth cause which tends to raise rents, is such an increase in the price of agricultural produce from whatever source arising, as will increase the difference between the price of produce, and the costs of production.

We have already adverted to a rise in the price of raw produce, which may take place in consequence of a regular increase of capital and population while money remains nearly of the same value. But this sort of rise is confined within narrow limits, and has little share in those great variations in the price of corn, which are most frequently the subject of observation. The kind of increased price, the effects of which I wish now more particularly to consider, is a rise of price from increased demand, terminating in an alteration in the value of the precious metals. |

If a great and continued demand should arise among surrounding nations for the raw produce of a particular country, the price of this produce would of course rise considerably; and the expenses of cultivation rising only slowly and gradually to the same proportion, the price of produce might for a long time keep so much a head as to give a prodigious stimulus to improvement, and encourage the employment of much capital in bringing fresh land under cultivation, and rendering the old much more productive. If however the demand continued, the price of labour would ultimately rise to its former level, compared with corn; a decided fall in the value of money supported by the abundant exportation of raw produce might generally take place; labour would become extremely productive in the purchase of all foreign commodities; and rents might rise without a fall of profits or wages. (83)

The state of money prices, and the rapid progress of cultivation in North America, tend strongly to illustrate the case here supposed. The price of wheat in the eastern states is nearly as high as in France and Flanders; and owing to the continued demand for hands, the money price of day-labour is nearly double what it is in England. But this high price of corn and labour has given great facilities to the farmers and labourers in the purchase of clothing and all sorts of foreign necessaries and conveniences. And it is certain that if the money prices of corn and labour had been both lower, yet had maintained the same proportion to each other, | land of the same quality could not have been cultivated, nor could equal rents have been obtained with the same rate of profits and the same real wages of labour. (84)

Effects of a similar kind took place in our own country from a similar demand for corn during the twenty years from 1793 to the end of 1813, though the demand was not occasioned in the same way. For some time before the war, which commenced in 1793, we had been in the habit of importing a certain quantity of foreign grain to supply our habitual consumption. The war naturally increased the expense of this supply by increasing the expense of freight, insurance, &c.; and, joined to some bad seasons and the subsequent decrees of the French government, raised the price, at which wheat could be imported, in the quantity wanted to supply the demand, in a very extraordinary manner.

This great rise in the price of imported corn, although the import bore but a small proportion to what was grown at home, necessarily raised in the same proportion the whole mass, and gave the same sort of stimulus to domestic agriculture as would have taken place from a great demand for our corn in foreign countries. In the mean time, the scarcity of hands, occasioned by an extending war, an increasing commerce, and the necessity of raising more food, joined to the ever ready invention of an ingenious people when strongly stimulated, introduced so much saving of manual labour into every department of industry, that the new | and inferior land taken into cultivation to supply the pressing wants of the society, was worked at a less expense of labour than richer soils some years before. Yet still the price of grain necessarily kept up as long as the most trifling quantity of foreign grain, which could only be obtained at a very high price, was wanted in order to supply the existing demand. With this high price, which at one time rose to nearly treble in paper and above double in bullion, compared with the prices before the war, it was quite impossible that labour should not rise nearly in proportion, and with it, of course, as profits had not fallen, all the commodities into which labour had entered.

We had thus a general rise in the prices of commodities, or fall in the value of the precious metals, compared with other countries, which our increasing foreign commerce and abundance of exportable commodities enabled us to sustain. That the last land taken into cultivation in 1813 did not require more labour to work it than the last land improved in the year 1790, is incontrovertibly proved by the acknowledged fact, that the rate of interest and profits was higher in the later period than the earlier. But still the profits were not so much higher as not to have rendered the interval most extremely favourable to the rise of rents. This rise, during the interval in question, was the theme of universal remark; and though a severe and calamitous check, from a combination of unfortunate circumstances, has since occurred; yet the great drainings and permanent | improvements, which were the effects of so powerful an encouragement to agriculture, have acted like the creation of fresh land, and have increased the real wealth and population of the country, without increasing the labour and difficulty of raising a given quantity of grain.

It is obvious then that a fall in the value of the precious metals, commencing with a rise in the price of corn, has a strong tendency, while it lasts, to encourage the cultivation of fresh land and the formation of increased rents. (85)

A similar effect would be produced in a country which continued to feed its own people, by a great and increasing demand for its manufactures. These manufactures, if from such a demand the value of their amount in foreign countries was greatly to increase, would bring back a great increase of value in return, which increase of value could not fail to increase the value of the raw produce. The demand for agricultural as well as manufactured produce would be augmented; and a considerable stimulus, though not perhaps to the same extent as in the last case, would be given to every kind of improvement on the land.

Nor would the result be very different from the introduction of new machinery, and a more judicious division of labour in manufactures. It almost always happens in this case, not only that the quantity of manufactures is very greatly increased, but that the value of the whole mass is augmented, from the great extension of the demand for them both abroad and at home, occasioned by | their cheapness. We see, in consequence, that in all rich manufacturing and commercial countries, the value of manufactured and commercial products bears a very high proportion to the raw products;* whereas, in comparatively poor countries, without much internal trade and foreign commerce, the value of their raw produce constitutes almost the whole of their wealth.

In those cases where the stimulus to agriculture originates in a prosperous state of commerce and manufactures, it sometimes happens that the first step towards a rise of prices is an advance in the wages of commercial and manufacturing labour. This will naturally have an immediate effect upon the price of corn, and an advance of agricultural labour will follow. It is not, however, necessary, even in those cases, that labour should rise first. If, for instance, the population were increasing as fast as the mercantile and manufacturing capital, the only effect might be an increasing number of workmen employed at the same wages, which would occasion a rise in the price of corn before any rise had taken place in the wages of labour.

We are supposing, however, now, that labour does ultimately rise nearly to its former level compared with corn, that both are considerably higher, | and that money has suffered a decided change of value. Yet in the progress of this change, the other outgoings, besides labour, in which capital is expended, can never all rise at the same time, or even finally in the same proportion. A period of some continuance can scarcely fail to occur when the difference between the price of produce and the cost of production is so increased as to give a great stimulus to agriculture; and as the increased capital, which is employed in consequence of the opportunity of making great temporary profits, can seldom or ever be entirely removed from the land, a part of the advantage so derived is permanent; together with the whole of that which is occasioned by a greater rise in the price of corn than in some of the materials of the farmer’s capital.

Mr. Ricardo acknowledges that, in a fall of the value of money, taxed commodities will not rise in the same proportion with others; and, on the supposition of the fall in the value of money being peculiar to a particular country, the same must unquestionably be said of all the various commodities which are either wholly or in part imported from abroad, many of which enter into the capital of the farmer. He would, therefore, derive an increased power from the increased money price of corn compared with those articles. A fall in the value of money cannot indeed be peculiar to one country without the possession of peculiar advantages in exportation; but with these advantages, which we know are very frequently possessed, and are very frequently increased by stimulants, a fall | in the value of money can scarcely fail permanently to increase the power of cultivating poorer lands, and of advancing rents. (86)

Whenever then, by the operation of the four causes above mentioned, the difference between the price of produce and the cost of the instruments of production increases, the rents of land will rise.

It is, however, not necessary that all these four causes should operate at the same time; it is only necessary that the difference here mentioned should increase. If, for instance, the price of produce were to rise, while the wages of labour and the price of the other branches of capital did not rise in proportion, and at the same time improved modes of agriculture were coming into general use, it is evident that this difference might be increased, although the profits of agricultural stock were not only undiminished, but were to rise decidedly higher. (87)

Of the great additional quantity of capital employed upon the land in this country during the last twenty years, by far the greater part is supposed to have been generated on the soil, and not to have been brought from commerce or manufactures. And it was unquestionably the high profits of agricultural stock, occasioned by improvements in the modes of agriculture, and by the constant rise of prices, followed only slowly by a proportionate rise in the materials of the farmer’s capital, that afforded the means of so rapid and so advantageous an accumulation. |

In this case cultivation has been extended, and rents have risen, although one of the instruments of production, capital, has been dearer. (88)

In the same manner a fall of profits, and improvements in agriculture, or even one of them separately, might raise rents, notwithstanding a rise of wages.

It is further evident, that no fresh land can be taken into cultivation till rents have risen, or would allow of a rise upon what is already cultivated.

Land of an inferior quality requires a great quantity of capital to make it yield a given produce; and if the actual price of this produce be not such as fully to compensate the cost of production, including profits, the land must remain uncultivated. It matters not whether this compensation is effected by an increase in the money price of raw produce, without a proportionate increase in the money price of the instruments of production; or by a decrease in the price of the instruments of production, without a proportionate decrease in the price of produce. What is absolutely necessary is, a greater relative cheapness of the instruments of production, to make up for the quantity of them required to obtain a given produce from poor land.

But whenever, by the operation of one or more of the causes before mentioned, the instruments of production become cheaper, and the difference between the price of produce and the expenses of cultivation increases, rents naturally rise. (89) It fol-|lows therefore as a direct and necessary consequence, that it can never answer to take fresh land of a poorer quality into cultivation till rents have risen, or would allow of a rise, on what is already cultivated.

It is equally true, that without the same tendency to a rise of rents,* it cannot answer to lay out fresh capital in the improvement of old land; at least upon the supposition, that each farm is already furnished with as much capital as can be laid out to advantage, according to the actual rate of profits. (90)

It is only necessary to state this proposition to make its truth appear. It certainly may happen, (and I fear it happens very frequently) that farmers are not provided with all the capital which could be employed upon their farms at the actual rate of agricultural profits. But supposing they are so provided, it implies distinctly, that more could not be applied without loss, till, by the operation of one or more of the causes above enumerated, rents had tended to rise.

It appears then, that the power of extending cultivation and increasing produce, both by the cultivation of fresh land and the improvement of the old, depends entirely upon the existence of such prices, compared with the expense of pro-|duction, as would raise rents in the actual state of cultivation.

But though cultivation cannot be extended and the produce of a country increased, except in such a state of things as would allow of a rise of rents; yet it is of importance to remark, that this rise of rents will be by no means in proportion to the extension of cultivation or the increase of produce. Every relative fall in the price of the instruments of production may allow of the employment of a considerable quantity of additional capital; and when either new land is taken into cultivation or the old improved, the increase of produce may be considerable, though the increase of rents be trifling. We see, in consequence, that in the progress of a country towards a high state of cultivation, the quantity of capital employed upon the land and the quantity of produce yielded by it bear a constantly increasing proportion to the amount of rents, unless counterbalanced by extraordinary improvements in the modes of cultivation.† |

According to the returns lately made to the Board of Agriculture, the average proportion which rent bears to the value of the whole produce seems not to exceed one-fifth;* whereas formerly, when there was less capital employed and less value produced, the proportion amounted to one-fourth, one-third, or even two-fifths. Still, however, the numerical difference between the price of produce and the expenses of cultivation increases with the progress of improvement; and though the landlord has a less share of the whole produce, yet this less share, from the very great increase of the produce, yields a larger quantity, and gives him a greater command of corn and labour. If the produce of land be represented by the number six, and the landlord has one-fourth of it, his share will be represented by one and a half. If the produce of land be as ten, and the landlord has one-fifth of it, his share will be represented by two. In the latter case, therefore, though the proportion of the landlord’s share to the whole produce is greatly diminished, his real rent, independently of nominal price, will be increased in the proportion of from three to four. And, in general, in all cases of increasing produce, if the landlord’s share of this produce do not diminish in the same proportion, which, though it often happens during the currency of leases, rarely or never happens on the renewal of them, the real rents of land must rise. | We see then that a progressive rise of rents seems to be necessarily connected with the progressive cultivation of new land, and the progressive improvement of the old: and that this rise is the natural and necessary consequence of the operation of four causes, which are the most certain indications of increasing prosperity and wealth—namely, the accumulation of capital, the increase of population, improvements in agriculture, and the high market price of raw produce, occasioned either by a great demand for it in foreign countries, or by the extension of commerce and manufactures.

section iv

Of the Causes which tend to lower Rents

The causes which lead to a fall of rents are, as may be expected, exactly of an opposite description to those which lead to a rise: namely, diminished capital, diminished population, a bad system of cultivation, and the low market price of raw produce. They are all indications of poverty and decline, and are necessarily connected with the throwing of inferior land out of cultivation, and the continued deterioration of the land of a superior quality.*(91)

The necessary effects of a diminished capital and diminished population in lowering rents, are too | obvious to require explanation; nor is it less clear that an operose and bad system of cultivation might prevent the formation of rents, even on fertile land, by checking the progress of population and demand beyond what could be supplied from the very richest qualities of soil. I will only therefore advert to the fourth cause here noticed.

We have seen that a rise in the price of corn, terminating in an alteration in the value of the precious metals, would give a considerable stimulus to cultivation for a certain time, and some facilities permanently, and might occasion a considerable and permanent rise of rents. And this case was exemplified by what had happened in this country during the period from 1794 to 1814.

It may be stated in like manner, that a fall in the price of corn terminating in a rise in the value of money, must, upon the same principles, tend to throw land out of cultivation and lower rents. (92) And this may be exemplified by what happened in this country at the conclusion of the war. The fall in the price of corn at that period necessarily disabled the cultivators from employing the same quantity of labour at the same price. Many labourers, therefore, were unavoidably thrown out of employment; and, as the land could not be cultivated in the same way, without the same number of hands, the worst soils were no longer worked, much agricultural capital was destroyed, and rents universally fell; while this great failure in the power of purchasing, among all those who either rented or possessed land, naturally occasioned a | general stagnation in all other trades. In the mean time, the fall in the price of labour from the competition of the labourers joined to the poverty of the cultivators, and the fall of rents both from the want of power and the want of will to pay the former rents, restored by degrees the prices of commodities, the wages of labour, and the rents of land, nearly to their former proportions, though all lower than they were before. The land which had been thrown out of tillage might then again be cultivated with advantage; but in the progress from the lower to the higher value of money, a period would have elapsed of diminished produce, diminished capital, and diminished rents. The country would recommence a progressive movement from an impoverished state; and, owing to a fall in the value of corn greater than in taxed commodities, foreign commodities, and others which form a part of the capital of the farmer and of the necessaries and conveniences of the labourer, the permanent difficulties of cultivation would be great compared with the natural fertility of the worst soil then actually in tillage.

It appeared that, in the progress of cultivation and of increasing rents, it was not necessary that all the instruments of production should fall in price at the same time; and that the difference between the price of produce and the expense of cultivation might increase, although either the profits of stock or the wages of labour might be higher, instead of lower.

In the same manner, when the produce of a | country is declining, and rents are falling, it is not necessary that all the instruments of production should be dearer. In the natural progress of decline, the profits of stock are necessarily low; because it is specifically the want of adequate returns which occasions this decline. (93) After stock has been destroyed, profits may become high and wages low; but the low price of raw produce joined to the high profits of a scanty capital may more than counterbalance the low wages of labour, and render it impossible to cultivate land where much capital is required.

It has appeared also, that in the progress of cultivation, and of increasing rents, rent, though greater in positive amount, bears a less and less proportion to the quantity of capital employed upon the land, and the quantity of produce derived from it. According to the same principle, when produce diminishes and rents fall, though the amount of rent will always be less, the proportion which it bears to capital and produce will be greater. And as, in the former case, the diminished proportion of rent was owing to the necessity of yearly taking fresh land of an inferior quality into cultivation, and proceeding in the improvement of old land, when it would return only the common profits of stock, with little or no rent; so, in the latter case, the high proportion of rent is owing to the discouragement of a great expenditure in agriculture, and the necessity of employing the reduced capital of the country in the exclusive cultivation of the richest lands, and leaving the re-|mainder to yield what rent can be got for them in natural pasture, which, though small, will bear a large proportion to the labour and capital employed. In proportion, therefore, as the relative state of prices is such as to occasion a progressive fall of rents, more and more lands will be gradually thrown out of cultivation, the remainder will be worse cultivated, and the diminution of produce will proceed still faster than the diminution of rents.

If the doctrine here laid down respecting the laws which govern the rise and fall of rents, be near the truth, the doctrine which maintains that, if the produce of agriculture were sold at such a price as to yield less neat surplus, agriculture would be equally productive to the general stock, must be very far from the truth. (94) With regard to my own conviction, indeed, I feel no sort of doubt that if, under the impression that the high price of raw produce, which occasions rent, is as injurious to the consumer as it is advantageous to the landlord, a rich and improved nation were determined by law to lower the price of produce, till no surplus in the shape of rent any where remained, it would inevitably throw not only all the poor land, but all except the very best land, out of cultivation, and probably reduce its produce and population to less than one-tenth of their former amount. (95) |

section v

On the Dependance of the actual Quantity of Produce obtained from the Land, upon the existing Rents and the existing Prices

From the preceding account of the progress of rent, it follows that the actual state of the natural rent of land is necessary to the actual produce; and that the price of corn, in every progressive country, must be just about equal to the cost of production on land of the poorest quality actually in use, with the addition of the rent it would yield in its natural state; or to the cost of raising additional produce on old land, which additional produce yields only the usual returns of agricultural stock with little or no rent.(96)

It is quite obvious that the price cannot be less; or such land would not be cultivated, nor such capital employed. Nor can it ever much exceed this price, because it will always answer to the landlord to continue letting poorer and poorer lands, as long as he can get any thing more than they will pay in their natural state; and because it will always answer to any farmer who can command capital, to lay it out on his land, if the additional produce resulting from it will fully repay the profits of his stock, although it yields nothing to his landlord.

It follows then, that the price of corn, in reference | to the whole quantity raised, is sold at the natural or necessary price, that is, at the price necessary to obtain the actual amount of produce, although by far the largest part is sold at a price very much above that which is necessary to its production, owing to this part being produced at less expense, while its exchangeable value remains undiminished.(97)

The difference between the price of corn and the price of manufactures, with regard to natural or necessary price, is this; that if the price of any manufacture were essentially depressed, the whole manufacture would be entirely destroyed; whereas, if the price of corn were essentially depressed, the quantity of it only would be diminished. There would be some machinery in the country still capable of sending the commodity to market at the reduced price.(98)

The earth has been sometimes compared to a vast machine, presented by nature to man for the production of food and raw materials; but, to make the resemblance more just, as far as they admit of comparison, we should consider the soil as a present to man of a great number of machines, all susceptible of continued improvement by the application of capital to them, but yet of very different original qualities and powers.

This great inequality in the powers of the machinery employed in producing raw produce, forms one of the most remarkable features which distinguishes the machinery of the land from the machinery employed in manufactures.

When a machine in manufactures is invented, | which will produce more finished work with less labour and capital than before, if there be no patent, or as soon as the patent has expired, a sufficient number of such machines may be made to supply the whole demand, and to supersede entirely the use of all the old machinery. The natural consequence is, that the price is reduced to the price of production from the best machinery, and if the price were to be depressed lower, the whole of the commodity would be withdrawn from the market.

The machines which produce corn and raw materials, on the contrary, are the gifts of nature, not the works of man; and we find, by experience, that these gifts have very different qualities and powers. The most fertile lands of a country, those which, like the best machinery in manufactures, yield the greatest products with the least labour and capital, are never found sufficient, owing to the second main cause of rent before stated, to supply the effective demand of an increasing population. The price of raw produce, therefore, naturally rises till it becomes sufficiently high to pay the cost of raising it with inferior machines, and by a more expensive process; and, as there cannot be two prices for corn of the same quality, all the other machines, the working of which requires less capital compared with the produce, must yield rents in proportion to their goodness.

Every extensive country may thus be considered as possessing a gradation of machines for the production of corn and raw materials, including in this | gradation not only all the various qualities of poor land, of which every large territory has generally an abundance, but the inferior machinery which may be said to be employed when good land is further and further forced for additional produce. As the price of raw produce continues to rise, these inferior machines are successively called into action; and as the price of raw produce continues to fall, they are successively thrown out of action. The illustration here used serves to shew at once the necessity of the actual price of corn to the actual produce, in the existing state of most of the countries with which we are acquainted, and the different effect which would attend a great reduction in the price of any particular manufacture, and a great reduction in the price of raw produce.

We must not however draw too large inferences from this gradation of machinery on the land. It is what actually exists in almost all countries, and accounts very clearly for the origin and progress of rent, while land still remains in considerable plenty. But such a gradation is not strictly necessary, either to the original formation, or the subsequent regular rise of rents. All that is necessary to produce these effects, is, the existence of the two first causes of rent formerly mentioned, with the addition of limited territory, or a scarcity of fertile land.

Whatever may be the qualities of any commodity, it is well known that it can have no exchangeable value, if it exists in a great excess above the wants of those who are to use it. But | such are the qualities of the necessaries of life that, in a limited territory, and under ordinary circumstances, they cannot be permanently in excess; and if all the land of such a country were precisely equal in quality, and all very rich, there cannot be the slightest doubt, that after the whole of the land had been taken into cultivation, both the profits of stock, and the real wages of labour, would go on diminishing till profits had been reduced to what were necessary to keep up the actual capital, and the wages to what were necessary to keep up the actual population, while the rents would be high, just in proportion to the fertility of the soil.

Nor would the effect be essentially different, if the quantity of stock which could be employed with advantage upon such fertile soil were extremely limited, so that no further capital were required for it than what was wanted for ploughing and sowing. Still there can be no doubt that capital and population might go on increasing in other employments, till they both came to a stand, and rents had reached the limits prescribed by the powers of the soil, and the habits of the people.

In these cases it is obvious that the rents are not regulated by the gradations of the soil, or the different products of capital on the same land; and that it is too large an inference from the theory of rent to conclude with Mr. Ricardo, that “It is only because land is of different qualities with respect to its productive powers, and because in the progress of population, land of an inferior quality, | or less advantageously situated, is called into cultivation, that rent is ever paid for the use of it.”*(99)

There is another inference which has been drawn from the theory of rent, which involves an error of much greater importance, and should therefore be very carefully guarded against.

In the progress of cultivation, as poorer and poorer land is taken into tillage, the rate of profits must be limited in amount by the powers of the soil last cultivated, as will be shewn more fully in a subsequent chapter. It has been inferred from this, that when land is successively thrown out of cultivation, the rate of profits will be high in proportion to the superior natural fertility of the land which will then be the least fertile in cultivation.(100)

If land yielded no rent whatever in its natural state, whether it were poor or fertile, and if the relative prices of capital and produce remained the same, then the whole produce being divided between profits and wages, the inference might be just. But the premises are not such as are here supposed. In a civilized country uncultivated land always yields a rent in proportion to its natural power of feeding cattle or growing wood; and of course, when land has been thrown out of tillage, particularly if this has been occasioned by the importation of cheaper corn from other countries, and consequently without a diminution of population, | the last land so thrown out may yield a moderate rent in pasture, though considerably less than before. As was said in the preceding section, rent will diminish, but not so much in proportion either as the capital employed on the land, or the produce derived from it. No landlord will allow his land to be cultivated by a tillage farmer paying little or no rent, when by laying it down to pasture, and saving the yearly expenditure of capital upon it, he can obtain a much greater rent. Consequently, as the produce of the worst lands actually cultivated can never be wholly divided between profits and wages, and in the case above supposed, not nearly so, the state of such land or its degree of fertility cannot possibly regulate the rate of profits upon it.(101)

If to this circumstance we add the effect arising from a rise in the value of money, and the probable fall of corn more than of working cattle, it is obvious that permanent difficulties will be thrown in the way of cultivation, and that richer land may not yield superior profits. The higher rent paid for the last land employed in tillage, together with the greater expense of the materials of capital compared with the price of produce, may fully counterbalance, or even more than counterbalance, the difference of natural fertility.(102)

With regard to the capital which the tenant may lay out on his farm in obtaining more produce without paying additional rent for it, the rate of its returns must obviously conform itself to the general rate of profits. If the prices of manufac-|tured and mercantile commodities were to remain the same notwithstanding the fall of labour, profits would certainly be raised; but they would not remain the same, as was shewn in the preceding chapter. The new prices of commodities and the new profits of stock would be determined upon principles of competition; and whatever the rate was, as so determined, capital would be taken from the land till this rate was attained. The profits of capital employed in the way just described must always follow, and can never lead or regulate.

It should be added, that in the regular progress of a country towards general cultivation and improvement, and in a natural state of things, it may fairly be presumed, that if the last land taken into cultivation be rich, capital is scarce, and profits will then certainly be high; but if land be thrown out of cultivation on account of means being found of obtaining corn cheaper elsewhere, no such inference is justifiable. On the contrary, capital may be abundant, compared with the demand for corn and commodities, in which case and during the time that such abundance lasts, whatever may be the state of the land, profits must be low.

This is a distinction of the greatest practical importance, which it appears to me has been quite overlooked by Mr. Ricardo.(103)

It will be observed, that the rents paid for what the land will produce in its natural state, though they make a most essential difference in the questions relating to profits and the component parts of price, in no respect invalidate the important doc-|trine that, in progressive countries in their usual state with gradations of soil, corn is sold at its natural or necessary price, that is, at the price necessary to bring the actual quantity to market. This price must on an average be at the least equal to the costs of its production on the worst land actually cultivated, together with the rent of such land in its natural state: because, if it falls in any degree below this, the cultivator of such land will not be able to pay the landlord so high a rent as he could obtain from the land without cultivation, and consequently the land will be left uncultivated, and the produce will be diminished. The rent of land in its natural state is therefore obviously so necessary a part of the price of all cultivated products, that, if it be not paid they will not come to market, and the real price actually paid for corn is, on an average, absolutely necessary to the production of the same quantity, or, in the words before stated, corn, in reference to the whole quantity produced, is sold at its necessary price.

I hope to be excused for presenting to the reader in various forms the doctrine, that corn, in reference to the quantity actually produced, is sold at its necessary price, like manufactures; because I consider it as a truth of high importance, which has been entirely overlooked by the Economists, by Adam Smith, and all those writers who have represented raw produce as selling always at a monopoly price. |

section vi

Of the Connexion between great comparative Wealth, and a high comparative Price of raw Produce

Adam Smith has very clearly explained in what manner the progress of wealth and improvement tends to raise the price of cattle, poultry, the materials of clothing and lodging, the most useful minerals, &c. compared with corn; but he has not entered into the explanation of the natural causes which tend to determine the price of corn. He has left the reader indeed to conclude, that he considers the price of corn as determined only by the state of the mines, which at the time supply the circulating medium of the commercial world. But this is a cause, which, though it may account for the high or low price of corn positively, cannot account for the relative differences in its price, in different countries, or compared with certain classes of commodities in the same country.

I entirely agree with Adam Smith, that it is of great use to inquire into the causes of high price, as from the result of such inquiries it may turn out, that the very circumstance of which we complain, may be the necessary consequence and the most certain sign of increasing wealth and prosperity. But of all inquiries of this kind, none surely can be so important, or so generally interesting, as an inquiry into the causes which affect | the price of corn, and occasion the differences in this price so observable in different countries.

These causes, in reference to the main effects observed, seem to be two:

1. A difference in the value of the precious metals, in different countries under different circumstances.(104)

2. A difference in the quantity of labour and capital necessary to produce corn.(105)

[To the first cause is to be attributed the main differences in the prices of corn in different countries, particularly in those situated at a great distance from each other.

If the value of money were the same in all countries, then the differences of price would arise exclusively from the different costs of production, under all the actual circumstances of each country.

Nations richer than others must, under similar circumstances, either have their corn at a higher price, or be dependent upon their neighbours for their support.

High price, or the importation of necessaries, are the natural alternatives belonging to a great increase of wealth, though liable to various modifications from circumstances.

Corn has a natural tendency to rise in the progress of society, from the increasing cost of production, and manufactures have a constant tendency to fall from an opposite cause.

Whichever of the two causes of the high price of corn we consider, this high price is generally connected with wealth, contrary to the statement of Adam Smith.]

section vii

On the Causes which may mislead the Landlord in letting his Lands, to the Injury both of himself and the Country

In the progress of a country towards a high state of improvement, the positive wealth of the landlord ought, upon the principles which have been laid down, gradually to increase; although his relative condition and influence in society will probably rather diminish, owing to the increasing number and wealth of those who live upon a still more important surplus* —the profits of stock.(106)

The progressive fall, with few exceptions, in the value of the precious metals throughout Europe; the still greater fall, which has occurred in the richest countries, together with the increase of produce which has been obtained from the soil, | must all conduce to make the landlord expect an increase of rents on the renewal of his leases. But, in re-letting his farms, he is liable to fall into two errors, which are almost equally prejudicial to his own interests, and to those of his country.

[By letting his lands to the best bidder, without any further attention; or by mistaking a temporary for a permanent rise of price, he may prevent the improvement of his farms.]

A similar caution is necessary in raising rents, even when the rise of prices seems as if it would be permanent. In the progress of prices and rents, rent ought always to be a little behind; not only to afford the means of ascertaining whether the rise be temporary or permanent, but even in the latter case, to give a little time for the accumulation of capital on the land, of which the landholder is sure to feel the full benefit in the end.

There is no just reason to believe, that if the landlords were to give the whole of their rents to their tenants, corn would be more plentiful and cheaper. If the view of the subject, taken in the preceding inquiry, be correct, the last additions made to our home produce are sold at nearly the cost of production, and the same quantity could not be produced from our own soil at a less price, even without rent. (107) The effect of transferring all rents to tenants, would be merely the turning them | into gentlemen, and tempting them to cultivate their farms under the superintendence of careless and uninterested bailiffs, instead of the vigilant eye of a master, who is deterred from carelessness by the fear of ruin, and stimulated to exertion by the hope of a competence. The most numerous instances of successful industry, and well-directed knowledge, have been found among those who have paid a fair rent for their lands; who have embarked the whole of their capital in their undertaking; and who feel it their duty to watch over it with unceasing case, and add to it whenever it is possible.

[But when a proper spirit of industry and enterprize prevails among a tenantry, it is of importance that they should have the means of accumulation and improvement.

Irregularities in the currency are another source of error to the landlord. When they continue long he must raise his rents accordingly, and lower them again when the value of money is restored.

With these cautions, the landlord may fairly look to a permanent increase of rents, and if in a country, the cultivation of which is extending, they do not rise more than in proportion to the price of corn, it can only be owing to taxation.]

Though it is by no means true, as stated by the Economists, that all taxes fall on the neat rents of the landlords, yet it is certainly true that they have little power of relieving themselves. It is also true that they possess a fund more disposable, and better adapted for taxation than any other. They are in consequence more frequently taxed, both directly and indirectly. And if they pay, as they certainly do, many of the taxes which fall on the capital of the farmer and the wages of the labourer, as well as those directly imposed on themselves, they must necessarily feel it in the diminution of that portion of the whole produce, which under other circumstances would have fallen to their share.(108)

section viii

On the strict and necessary Connexion of the Interests of the Landlord and of the State in a Country which supports its own Population

It has been stated by Adam Smith, that the interest of the landholder is closely connected with that of the state;* and that the prosperity or adversity of the one involves the prosperity or adversity of the other. The theory of rent, as laid down in the present chapter, seems strongly to confirm | this statement. If under any given natural resources in land, the main causes which conduce to the interest of the landholder are increase of capital, increase of population, improvements in agriculture, and an increasing demand for raw produce occasioned by the prosperity of commerce, it seems scarcely possible to consider the interests of the landlord as separated from those of the state and people.

Yet it has been said by Mr. Ricardo that, “the interest of the landlord is always opposed to that of the consumer and the manufacturer,”† that is, to all the other orders in the state. To this opinion he has been led, very consistently, by the peculiar view he has taken of rent, which makes him state, that it is for the interest of the landlord that the cost attending the production of corn should be increased,‡ and that improvements in agriculture tend rather to lower than to raise rents.(109)

If this view of the theory of rent were just, and it were really true, that the income of the landlord is increased by increasing the difficulty, and diminished by increasing* the facility, of production, the opinion would unquestionably be well founded. But if, on the contrary, the landlord’s income is practically found to depend upon natural fertility of soil, improvements in agriculture, and inventions to save labour, we may still think, with Adam Smith, that the landlord’s interest is not opposed to that of the country. |

It is so obviously true, as to be hardly worth stating, that if land of the greatest fertility were in such excessive plenty compared with the population, that every man might help himself to as much as he wanted, there would be no rents or landlords properly so called. It will also be readily allowed, that if in this or any other country you could suppose the soil suddenly to be made so fertile, that a tenth part of the surface, and a tenth part of the labour now employed upon it, could more than support the present population, you would for some time considerably lower rents.

But it is of no sort of use to dwell upon, and draw general inferences from suppositions which never can take place.

What we want to know is, whether, living as we do in a limited world, and in countries and districts still more limited, and under such physical laws relating to the produce of the soil and the increase of population as are found by experience to prevail, the interests of the landlord are generally opposed to those of the society. (110) And in this view of the subject, the question may be settled by an appeal to the most incontrovertible principles confirmed by the most glaring facts.

Whatever fanciful suppositions we may make about sudden improvements in fertility, nothing of this kind which we have ever seen or heard of in practice, approaches to what we know of the power of population to increase up to the additional means of subsistence.

Improvements in agriculture, however consi-|derable they may finally prove, are always found to be partial and gradual. And as, where they prevail to any extent, there is always an effective demand for labour, the increase of population occasioned by the increased facility of procuring food, soon overtakes the additional produce. Instead of land being thrown out of employment, more land is cultivated, owing to the cheapness of the instruments of cultivation, and under these circumstances rents must rise instead of fall. These results appear to me to be so completely confirmed by experience, that I doubt, if a single instance in the history of Europe, or any other part of the world, can be produced, where improvements in agriculture have been practically found to lower rents.

I should further say, that not only have improvements in agriculture never lowered rents, but that they have been hitherto, and may be expected to be in future, the main source of the increase of rents, in almost all the countries with which we are acquainted.

It is a fundamental part of the theory which has been explained in this chapter, that, as most countries consist of a gradation of soils, rents rise as cultivation is pushed to poorer lands; but still the connexion between rent and fertility subsists in undiminished force. The rich lands are those which yield the rents, not the poor ones. The poor lands are only cultivated, because the increasing population is calling forth all the resources of | the country, and if there were no poor soils, these resources would still be called forth; a limited territory, however fertile, would soon be peopled; and without any increase of difficulty in the production of food, rents would rise.

It is evident then, that difficulty of production has no kind of connexion with increase of rent, except as, in the actual state of most countries, it is the natural consequence of an increase of capital and population, and a fall of profits and wages; or, in other words, of an increase of wealth.

But after all, the increase of rents which results from an increase of price occasioned solely by the greater quantity of labour and capital necessary to produce a given quantity of corn on fresh land, is very much more limited than has been supposed; and by a reference to most of the countries with which we are acquainted, it will be seen that, practically, improvements in agriculture and the saving of labour on the land, both have been, and may be expected in future to be, a much more powerful source of increasing rents.

It has already been shewn, that for the very great increase of rents which have taken place in this country during nearly the last hundred years, we are mainly indebted to improvements in agriculture, as profits have rather risen than fallen, and little or nothing has been taken from the wages of families, if we include parish allowances, and the earnings of women and children. Consequently these rents must have been a creation from the | skill and capital employed upon the land, and not a transfer from profits and wages, as they existed nearly a hundred years ago (111)

[This position may be illustrated by the state of England, Scotland, Ireland, Poland, India, and South America.

In all these countries the future increase of rents will depend mainly upon an improved system of agriculture.

The United States of America seem to be the only country which would admit of any considerable rise of rents by a mere transfer from profits and wages.

In old states, an operose and ignorant system of cultivation may keep the profits of stock and the wages of labour low with much good land remaining uncultivated; and this seems to be a very frequent case.

But if, independently of importation, every thing which tends to enrich a country increases rents, and every thing which tends to impoverish it, diminishes them; it must be allowed that the interests of the landlord and of the state are closely united.]

Mr. Ricardo, as I have before intimated, takes only one simple and confined view of the progress of rent. (112) He considers it as occasioned solely by the increase of price, arising from the increased | difficulty of production.* But if rents in many countries may be doubled or trebled by improvements in agriculture, while in few countries they could be raised a fourth or a fifth, and in some not a tenth, by the increase of price arising from the increased difficulty of production, must it not be acknowledged, that such a view of rent embraces only a very small part of the subject, and consequently that any general inferences from it must be utterly inapplicable to practice?

It should be further observed, in reference to improvements in agriculture, that the mode in which Mr. Ricardo estimates the increase or decrease of rents is quite peculiar; and this peculiarity in the use of his terms tends to separate his conclusions still farther from truth as enunciated in the accustomed language of political economy.

In speaking of the division of the whole produce of the land and labour of the country between the three classes of landlords, labourers, and capitalists, he has the following passage.

“It is not by the absolute quantity of produce obtained by either class, that we can correctly judge of the rate of profit, rent, and wages, but by the quantity of labour required to obtain that produce. | By improvements in machinery and agriculture the whole produce may be doubled; but if wages, rent and profits be also doubled, they will bear the same proportions to one another as before. But if wages partook not of the whole of this increase; if they, instead of being doubled, were only increased one half; if rent, instead of being doubled, were only increased three-fourths, and the remaining increase went to profit, it would, I apprehend, be correct for me to say, that rent and wages had fallen while profits had risen. For if we had an invariable standard by which to measure the value of this produce, we should find that a less value had fallen to the class of labourers and landlords, and a greater to the class of capitalists than had been given before.”*

A little farther on, having stated some specific proportions, he observes, “In that case I should say, that wages and rent had fallen and profits risen, though, in consequence of the abundance of commodities, the quantity paid to the labourer and landlord would have increased in the proportion of 25 to 44.”†

In reference to this statement, I should observe, that if the application of Mr. Ricardo’s invariable standard of value naturally leads to the use of such language, the sooner the standard is got rid of, the better, as in an inquiry into the nature and causes of the wealth of nations, it must necessarily occasion perpetual confusion and error. For what does | it require us to say? We must say that the rents of the landlord have fallen and his interests have suffered, when he obtains as rent above three-fourths more of raw produce than before, and with that produce will shortly be able, according to Mr. Ricardo’s own doctrines, to command three-fourths’ more labour. In applying this language to our own country, we must say that rents have fallen considerably during the last forty years, because, though rents have greatly increased in exchangeable value,—in the command of money, corn, labour and manufactures, it appears, by the returns to the Board of Agriculture, that they are now only a fifth of the gross produce,‡ whereas they were formerly a fourth or a third.(113)

In reference to labour, we must say that it is low in America, although we have been hitherto in the habit of considering it as very high, both in money value and in the command of the necessaries and conveniences of life. And we must call it high in Sweden; because, although the labourer only earns low money wages, and with these low wages can obtain but few of the necessaries and conveniences of life; yet, in the division of the whole produce of a laborious cultivation on a poor soil, a larger proportion may go to labour.*(114) |

Into this unusual language Mr. Ricardo has been betrayed by the fundamental error of confounding cost and value, and the further error of considering raw produce in the same light as manufactures. It might be true, that if, by improvements in machinery, the produce of muslins were doubled, the increased quantity would not command in exchange a greater quantity of labour and of necessaries than before, and would have little or no effect therefore on population. But Mr. Ricardo has himself said, that “if improvements extended to all the objects of the labourer’s consumption, we should find him probably, at the end of a very few years, in possession of only a small, if any addition to his enjoyments.”† Consequently, according to Mr. Ricardo, population will increase in proportion to the increase of the main articles consumed by the labourer.

But if population increases according to the necessaries which the labourer can command, the increased quantity of raw produce which falls to the share of the landlord must increase the exchangeable value of his rents estimated in labour, corn and commodities. And it is certainly by real value in exchange, and not by an imaginary standard, which is to measure proportions or cost in labour, that the rents and interests of landlords | will be estimated. It would often happen, that after improvements had been taking place, rents would rise according to the accustomed and natural meaning attached to the term, while they might fall according to the new mode of estimating them adopted by Mr. Ricardo.

I need hardly say, that, in speaking of the interests of the landlord, I mean always to refer to what I should call his real rents and his real interests; that is, his power of commanding labour, and the necessaries and conveniences of life, whatever proportion these rents may form of the whole produce, or whatever quantity of labour they may have cost in producing.‡ But in fact, improvements in agriculture tend, in a moderate time, even according to the concessions of Mr. Ricardo, to increase the proportion of the whole produce which falls to the landlord’s share; so that in any way we can view the subject, we must allow that, in-|dependently of the question of importations, the interest of the landlord is strictly and necessarily connected with that of the state. (116)

section ix

On the Connexion of the Interests of the Landlord and of the State, in Countries which import Corn

The only conceivable doubt which can arise respecting the strictest union between the interest of the landlord and that of the state, is in the question of importation. And here it is evident, that at all events the landlord cannot be placed in a worse situation than others, and by some of the warmest friends of the freedom of trade, he has justly been considered as placed in a much better. No person has ever doubted that the individual interests of the manufacturers of woollen, silk, or linen goods, might be injured by foreign competition; and few would deny that the importation of a large body of labourers would tend to lower wages. Under the most unfavourable view, therefore, that we can take of the subject, the case of the landlord with regard to importation is not separated from that of the other classes of society. (117)

[Adam Smith was of opinion that the landlords were not injured by foreign competition, though he allowed that manufacturers were.

The statement of Adam Smith is too strong; but it is certainly true that the producers of corn and cattle are less injured by foreign competition than the producers of particular manufactures.

On the question of importation it is important to remark that, in the way in which capital is practically employed upon the land, the interests of the state and the cultivator are not proportioned to each other.

The cultivation of the country is chiefly carried on by tenants, and a large part of the permanent improvements in agriculture, of late years, has been effected by the capitals of the same class of people.]

But if it be true, as I fully believe it is, that a very large part of the improvements which have taken place on the soil, has been derived from the capital, skill and industry of tenants, no truth can | be more distinct and incontrovertible than that the advantage which such individuals have derived from a capital employed in agriculture, compared with a capital employed in commerce and manufactures, cannot have been proportioned to the advantages derived by the country; or, in other words, that the interests of individuals in the employment of capital, have not in this case been identified with the interest of the state.

This position will be made perfectly clear, if we examine attentively what would be the relative effect to the individual and the state of the employment of a capital of 10,000l. in agriculture, or in manufactures under the circumstances described.

Let us suppose that a capital of 10,000l. might be employed in commerce or manufactures for twenty years, at a profit of about twelve per cent., and that the capitalist might retire, at the end of that term, with his fortune doubled. It is obvious that, to give the same encouragement to the employment of such a capital in agriculture, the same or nearly the same advantages must be offered to the individual. But in order to enable a person who employs his capital on rented land to convert his 10,000l. in the course of twenty years into 20,000l. it is certain that he must make annually higher profits, in order to enable him to recover that part of his capital which he has actually sunk upon the land, and cannot withdraw at the end of the term; and then, if he has been an essential improver, he must necessarily leave the land to his | landlord, at the end of the lease, worth a considerably higher rent, independently of any change in the value of the circulating medium, than at the commencement of it. But these higher annual returns, which are necessary to the farmer with a temporary tenure to give him the common profits of stock, are continued, in part at least, in the shape of rent at the end of the lease, and must be so much gained by the state. (118)

In the case of the capital employed in commerce and manufactures, the profit to the state is proportioned to the profit derived by the individual; in the case of the capital employed in agriculture it is much greater; and this would be true, whether the produce were estimated in money, or in corn and labour. In either way, under circumstances which in all probability have actually occurred, the profits to the state derived from the capital employed in agriculture might be estimated perhaps at fourteen or fifteen per cent., while the profits to the individuals, in both cases, may have been only twelve per cent.

Sir John Sinclair, in his Husbandry of Scotland, has given the particulars of a farm in East Lothian, in which the rent is nearly half the produce; and the rent and profits together yield a return of fifty-six per cent. on the capital employed. But the rent and profits together are the real measure of the wealth derived by the country from the capital so employed; and as the farm described is one where the convertible husbandry is practised, a system in which the greatest improvements have been made | of late years, there is little doubt that a considerable part of this increase of wealth had been derived from the capital of the tenant who held the farm previous to the renewal of the lease, although such increase of wealth to the state could not have operated as a motive of interest to the individual so employing his stock. (119)

If then during the war no obstacles had occurred to the importation of foreign corn, and the profits of agriculture had in consequence been only ten per cent. while the profits of commerce and manufactures were twelve, the capital of the country would of course have flowed towards commerce and manufactures; and measuring the interest of the state, as usual, by the interest of individuals, this would have been a more advantageous direction of it, in the proportion of twelve to ten. But, if the view of the subject just taken be correct, instead of a beneficial direction of it to a profit of twelve per cent. from a profit of ten per cent. as measured by the interests of the individuals concerned, it might have been a disadvantageous direction of it to a profit of only twelve per cent. from a profit of fourteen per cent. as measured by the interest of the state. (120)

It is obvious therefore that the natural* restrictions upon the importation of foreign corn during the war, by forcibly raising the profits of domestic | cultivation, may have directed the capital of the country into a channel more advantageous than that into which it would otherwise have flowed, and instead of impeding the progress of wealth and population, as at first one should certainly have expected, may have decidedly and essentially promoted it.

And this, in fact, such restrictions not only may, but must do, whenever the demand for corn grown at home is such, that the profits of capitals employed on the new lands taken into cultivation, joined to the rents which they generate, form together greater returns in proportion to the stock employed, than the returns of the capitals engaged in commerce and manufactures; because, in this case, though foreign corn might be purchased, without these restrictions, at a cheaper money price than that at which it could be raised at home, it would not be purchased at so small an expense of capital and labour† , which is the true proof of the advantageous employment of stock. (121)

But if the progress of wealth has been rather accelerated than retarded by such restrictions upon | the importation of foreign corn, on account of the greater quantity of raw produce that has been purchased by a given quantity of capital and labour at home, than could have been purchased by the same quantity of capital and labour from abroad, (123) it is quite obvious that the population must have been accelerated rather than retarded; and certainly the unusually rapid increase of population which is known to have taken place during the last ten or fifteen years of the war so much beyond the average of the century, tends strongly to confirm this conclusion.

The position here laid down may appear to be rather startling; but the reader will see how it is limited. (124) It depends for its general effects upon permanent improvements being made by a capital which has only a temporary interest in the fruits of such improvements; and, in reference to restrictions upon importation, it depends upon the circumstance that these restrictions by the increased demand for the products of domestic agriculture which they create, should have the effect of occasioning improvements which would otherwise not have taken place. But neither of these usual concomitants are absolutely necessary.

Considerable quantities of capital might be employed upon the land, and a temporary increase of demand for domestic produce might take place, without permanent improvements in agriculture. All that is meant to be said is, that when, under such circumstances, permanent improvements in agriculture are really made, and rent is created, it is impossible to resist the conclusion, that to such | extent the interest of the state in the exchangeable value created by such capital,* is decidedly greater than the interest of the individual.

This consideration, combined with those before adverted to, may make it at least a matter of doubt, whether even in the case of restrictions upon the importation of foreign corn, the interest of the state may not sometimes be the same as that of the landlords. But no such doubt exists respecting a restriction upon the importation of other commodities. And when we add, that in a state of perfectly free intercourse, it is eminently the interest of those who live upon the rents of land, that capital and population should increase, while to those who live upon the profits of stock and the wages of labour, an increase of capital and population is, to say the least of it, a much more doubtful benefit; it may be most safely asserted, that the interest of no other class in the state is so nearly and necessarily connected with its wealth and power, as the interest of the landlord. |

section x

General Remarks on the Surplus Produce of the Land.

It seems rather extraordinary that the very great benefit which society derives from that surplus produce of the land which, in the progress of society, falls mainly to the landlord in the shape of rent, should not yet be fully understood and acknowledged. I have called this surplus a bountiful gift of Providence, and am most decidedly of opinion, that it fully deserves the appellation. But Mr. Ricardo has the following passage:—

“Nothing is more common than to hear of the advantages which the land possesses over every other source of useful produce, on account of the surplus which it yields in the form of rent. Yet when land is most abundant, when most productive and most fertile, it yields no rent; and it is only, when its powers decay, and less is yielded in return for labour, that a share of the original produce of the more fertile portions is set apart for rent. It is singular that this quality in the land, which should have been noticed as an imperfection, compared with the natural agents by which manufactures are assisted, should have been pointed out as constituting its peculiar pre-eminence. If air, water, the elasticity of steam, and the pressure of the atmosphere were of various qualities, if they could be appropriated, and each quality existed | only in moderate abundance, they, as well as the land, would afford a rent, as the successive qualities were brought into use. With every worse quality employed, the value of the commodities in the manufacture of which they were used would rise, because equal quantities of labour would be less productive. Man would do more by the sweat of his brow, and nature perform less, and the land would be no longer pre-eminent for its limited powers.”

“If the surplus produce which the land affords in the form of rent be an advantage, it is desirable that every year the machinery newly constructed should be less efficient than the old, as that would undoubtedly give a greater exchangeable value to the goods manufactured, not only by that machinery, but by all the other machinery in the kingdom; and a rent would be paid to all those who possessed the most productive machinery.”*

Now, in referring to a gift of Providence, we should surely speak of its value in relation to the laws and constitution of our nature, and of the world in which we live. But, if any person will take the trouble to make the calculation, he will see that if the necessaries of life could be obtained without limit, and the number of people could be doubled every twenty-five years, the population which might have been produced from a single pair since the Christian aera, would have been sufficient, not only to fill the earth quite full of people, so that | four should stand in every square yard, but to fill all the planets of our solar system in the same way, and not only them, but all the planets revolving round the stars which are visible to the naked eye, supposing each of them to be a sun, and to have as many planets belonging to it as our sun has. Under this law of population, which, excessive as it may appear when stated in this way, is, I firmly believe, best suited to the nature and situation of man, it is quite obvious that some limit to the production of food, or some other of the necessaries of life, must exist. Without a total change in the constitution of human nature, and the situation of man on earth, the whole of the necessaries of life could not be furnished in the same plenty as air, water, the elasticity of steam, and the pressure of the atmosphere. It is not easy to conceive a more disastrous present—one more likely to plunge the human race in irrecoverable misery, than an unlimited facility of producing food in a limited space. A benevolent Creator then, knowing the wants and necessities of his creatures, under the laws to which he had subjected them, could not, in mercy, have furnished the whole of the necessaries of life in the same plenty as air and water. This shews at once the reason why the former are limited in quantity, and the latter poured out in profusion. But if it be granted, as it must be, that a limitation in the power of producing food is obviously necessary to man confined to a limited space, then the value of the actual quantity of land which he has received, depends upon the small quantity of labour neces-|sary to work it, compared with the number of persons which it will support; or, in other words, upon that specific surplus so much under-rated by Mr. Ricardo, which by the laws of nature terminates in rent.(126)

If manufactured commodities, by the gradations of machinery supposed by Mr. Ricardo, were to yield a rent, man, as he observes, would do more by the sweat of his brow;* and supposing him still to obtain the same quantity of commodities, (which, however, he would not,) the increase of his labour would be in proportion to the greatness of the rent so created.(127) But the surplus, which a given quantity of land yields in the shape of rent, is totally different. Instead of being a measure of the increase of labour, which is necessary altogether to produce the quantity of corn which the land can yield, it is finally an exact measure of the relief from labour in the production of food granted to him by a kind Providence. If this final surplus be small, the labour of a large portion of the society must be constantly employed in procuring, by the sweat of their brows, the mere necessaries of life, and so-|ciety must be most scantily provided with convenient luxuries and leisure; while if this surplus be large, manufactures, foreign luxuries, arts, letters and leisure may abound.

It is a little singular, that Mr. Ricardo, who has, in general, kept his attention so steadily fixed on permanent and final results, as even to define the natural price of labour to be that price which would maintain a stationary population, although such a price cannot generally occur under moderately good governments, and in an ordinary state of things, for hundreds of years, has always, in treating of rent, adopted an opposite course, and referred almost entirely to temporary effects.

It is obviously with this sort of reference, that he has objected to Adam Smith for saying that, in rice countries a greater share of the produce would belong to the landlord than in corn countries, and that rents in this country would rise, if potatoes were to become the favourite vegetable food of the common people, instead of corn.* Mr. Ricardo could not but allow, indeed he has allowed,† that rents would be finally higher in both cases.(128) But he immediately supposes that this change is put in execution at once, and refers to the temporary result of land being thrown out of cultivation. Even on this supposition however, all the lands which had been thrown up, would be cultivated again in a very much less time, than it would take to reduce the price of labour, in a natural state of things, to | the maintenance only of a stationary population.(129) And therefore, with a view to permanent and final results, which are the results which Mr. Ricardo has mainly considered throughout his work, he ought to have allowed the truth of Adam Smith’s statements.

But, in point of fact, there is every probability that not even a temporary fall of rent would take place. No nation ever has changed or ever will change the nature of its food all at once. The process, both in reference to the new system of cultivation to be adopted, and the new tastes to be generated, must necessarily be very slow. In the greater portion of Europe, it is probable, that a change from corn to rice could never take place; and where it could, it would require such great preparations for irrigation, as to give ample time for an increase of population fully equal to the increased quantity of food produced. In those countries where rice is actually grown, the rents are known to be very high. Dr. Buchanan, in his valuable travels through the Mysore, says, that in the watered lands below the Gh‡ts, the government was in the habit of taking two-thirds of the crop.‡ This is an amount of rent which probably no lands cultivated in corn can ever yield; and in those parts of India and other countries, where an actual change has taken place from the cultivation of corn to the cultivation of rice, I have little doubt that rents have not only finally risen very considerably, but have risen even during the progress of the change.(130) |

With regard to potatoes, we have very near to us an opportunity of studying the effects of their becoming the vegetable food of the great mass of a people. The population of Ireland has increased faster, during the last hundred years, than that of any other country in Europe; and under its actual government, this fact cannot be rationally accounted for, but from the introduction and gradual extension of the use of the potatoe. I am persuaded, that had it not been for the potatoe, the population of Ireland would not have more than doubled, instead of quadrupled, during the last century. This increase of population has prevented lands from being thrown out of cultivation, or given greater value to natural pasture, at the same time that it has occasioned a great fall in the comparative money wages of labour. This fall, experience tells us, has not been accompanied by a proportionate rise of profits, and the consequence is a considerable rise of rents.(131) The wheat, oats and cattle of Ireland are sold to England and bear English money prices, while they are cultivated and tended by labour paid at half the money price; a state of things which must greatly increase either the revenue derived from profits, or the revenue derived from rents; and practical information assures us, that it is the latter which has derived the greatest benefit from it.

I think, therefore, that though it must lead to great errors, not to distinguish very decidedly the temporary rates of wages from their final rates, it would lead to no such error to consider the tempo-|rary effects of the changes of food which have been referred to, as of the same kind with their final effects, that is, as tending always to raise rents. And I am convinced, that if we make our comparisons with any tolerable fairness, that is, if we compare countries under similar circumstances, with respect to extent, and the quantity of capital employed upon the soil, which is obviously the only fair mode of comparing them, we shall find that rent will be in proportion to the natural and acquired fertility of the land.(132)

If the natural fertility of this island had been double what it is, and the people had been equally industrious and enterprising, the country would, according to all just theory, have been at this time doubly rich and populous, and the rents of land much more than double what they are now. On the other hand, if the soil of the island had possessed only half its present fertility, a small portion of it only, as I stated on a former occasion, would have admitted of corn cultivation, the wealth and population of the country would have been quite inconsiderable, and rents not nearly one half of what they are now. But if, under similar circumstances, rent and fertility go together, it is no just argument against their natural connexion to say that rent is higher in England, where a great mass of capital has been employed upon the land, than in the more fertile country of South America, where, on the same extent of territory, not a twentieth part has been employed, and the population is extremely scanty.(133) |

The fertility of the land, either natural or acquired, may be said to be the only source of permanently high returns for capital. If a country were exclusively manufacturing and commercial, and were to purchase all its corn at the market prices of Europe, it is absolutely impossible that the returns for its capital should for any great length of time be high.(134) In the earlier periods of history, indeed, when large masses of capital were extremely rare, and were confined to a very few towns, the sort of monopoly which they gave to particular kinds of commerce and manufactures tended to keep up profits for a much longer time; and great and brilliant effects were undoubtedly produced by some states which were almost exclusively commercial.(135) But in modern Europe, the general abundance of capital, the easy inter-course between different nations, and the laws of domestic and foreign competition prevent the possibility of large permanent returns being received for any other capitals than those employed on the land. No great commercial and manufacturing state in modern times, whatever may have been its skill, has yet been known permanently to make higher profits than the average of the rest of Europe.(136) But the capitals successfully employed on moderately good land, may permanently and without fear of interruption or check, sometimes yield twenty per cent., sometimes thirty or forty, and sometimes even fifty or sixty per cent.

A striking illustration of the effects of capitals employed on land compared with others, appeared in | the returns of the property-tax in this country. The taxable income derived from the capitals employed on land, was such as to yield to the property-tax nearly 6½ millions, while the income derived from the capitals employed in commerce and manufactures was only such as to yield two millions.* It is probably true, that a larger proportion of the incomes derived from the capitals employed in trade and manufactures, escaped the tax, partly from their subdivision, and partly from other causes; but the deficiency so occasioned could in no respect make up for the extraordinary productiveness of the capitals employed in agriculture.† And indeed it is quite obvious that, in comparing two countries together with the same capitals and the same rate of profits, one of which has land on which to grow its corn, and the other is obliged to purchase it, that which has the land, particularly if it be fertile, must be much richer, more populous, and have a larger disposable income for taxation.(137)

Another most desirable benefit belonging to a fertile soil is, that states so endowed are not obliged to pay much attention to that most distressing and disheartening of all cries to every man of humanity—the cry of the master manufacturers and merchants for low wages, to enable them to find a market for | their exports. If a country can only be rich by running a successful race for low wages, I should be disposed to say at once, perish such riches!(138) But, though a nation which purchases the main part of its food from foreigners, is condemned to this hard alternative, it is not so with the possessors of fertile land. The peculiar products of a country, though never probably sufficient to enable it to import a large proportion of its food* as well as of its conveniences and luxuries, will generally be sufficient to give full spirit and energy to all its commercial dealings, both at home and abroad; while a small sacrifice of produce, that is, the not pushing cultivation too far, would, with prudential habits among the poor,†(139) enable it to maintain the whole of a large population in wealth and plenty. Prudential habits, among the labouring classes of a country mainly depending upon manufactures and commerce, might ruin it.(140) In a country of fertile land, such | habits would be the greatest of all conceivable blessings.

Among the inestimable advantages which belong to that quality in the land, which enables it to yield a considerable rent, it is not one of the least, that in the progress of society it affords the main security to man that nearly his whole time, or the time of nearly the whole society, shall not be employed in procuring mere necessaries. According to Mr. Ricardo, not only will each individual capital in the progress of society yield a continually diminishing revenue, but the whole amount of the revenue derived from profits will be diminished; and there is no doubt that the labourer will be obliged to employ a greater quantity of labour to produce that portion of his wages which must be spent in necessaries.(141) Both these great classes of society, therefore, may be expected to have less power of giving leisure to themselves, or of commanding the labour of those who administer to the enjoyments of society, as contradistinguished from those who administer to its necessary wants. But, fortunately for mankind, the neat rents of the land, under a system of private property, can never be diminished by the progress of cultivation. Whatever proportion they may bear to the whole produce, the actual amount must always go on increasing, and will always afford a fund for the enjoyments and leisure of the society, sufficient to leaven and animate the whole mass.

If the only condition on which we could obtain lands yielding rent were, that they should remain | with the immediate descendants of the first possessors, though the benefits to be derived from the present would no doubt be very greatly diminished, yet from its general and unavoidable effects on society, it would be most unwise to refuse it as of little or no value. But, happily, the benefit is attached to the soil, not to any particular proprietors. Rents are the reward of present valour and wisdom, as well as of past strength and cunning. Every day lands are purchased with the fruits of industry and talents.* They afford the great prize, the “otium cum dignitate” to every species of laudable exertion; and, in the progress of society, there is every reason to believe, that, as they become more valuable from the increase of capital and population, and the improvements in agriculture, the benefits which they yield may be divided among a much greater number of persons. |

In every point of view, then, in which the subject can be considered, that quality of land which, by the laws of our being, must terminate in rent, appears to be a boon most important to the happiness of mankind; and I am persuaded, that its value can only be underrated by those who still labour under some mistake, as to its nature, and its effects on society.(142) |

[* ]cannot, however, agree with him in thinking that all land which yields food must necessarily yield rent. The land which is successively taken into cultivation in improving countries, may only pay profits and labour. A fair profit on the stock employed, including, of course, the payment of labour, will always be a sufficient inducement to cultivate. But, practically, the cases are very rare, where land is to be had by any body who chooses to take it: and probably it is true, almost universally, that all appropriated land which yields food in its natural state, always yields a rent, whether cultivated or uncultivated.

[* ]Vol. II. p. 124. Of this work a new and much improved edition has lately been published, which is highly worthy the attention of all those who take an interest in these subjects.

[† ]Vol. I. p. 49.

[‡ ]Vol. IV. p. 134.

[* ]Vol. III. p. 212.

[* ]It is however certain that, if either these materials be wanting, or the skill and capital necessary to work them up be prevented from forming, owing to the insecurity of property or any other cause, the cultivators will soon slacken in their exertions, and the motives to accumulate and to increase their produce will greatly diminish. But in this case there will be a very slack demand for labour: and, whatever may be the nominal cheapness of provisions, the labourer will not really be able to command such a portion of the necessaries of life, including, of course, clothing, lodging, &c. as will occasion an increase of population.

[* ]Mr. Ricardo has supposed a case (p. [403].) of a diminution of fertility of one-tenth, and he thinks that it would increase rents by pushing capital upon less fertile land. I think, on the contrary, that in any well cultivated country it could not fail to lower rents, by occasioning the withdrawing of capital from the poorest soils. If the last land before in use would do but little more than pay the necessary labour and a profit of 10 per cent. upon the capital employed, a diminution of a tenth part of the gross produce would certainly render many poor soils no longer worth cultivating. And, on Mr. Ricardo’s supposition, where, I would ask, is the increased demand and increased price to come from, when, from the greater quantity of labour and capital necessary for the land, the means of obtaining the precious metals, or any other commodities, to exchange for corn, would be greatly reduced?

[* ]Mr. Ricardo says, (p. [405].) in answer to this passage, that, “given the high price, rent must be high in proportion to abundance and not scarcity,” whether in peculiar vineyards or on common corn lands. But this is begging the whole of the question. (53) The price cannot be given. By the force of external demand and diminished supply the produce of an acre of Champaigne grapes might permanently command fifty times the labour that had been employed in cultivating it; but no possible increase of | external demand or diminution of supply could ever permanently enable the produce of an acre of corn to command more labour than it would support.

[* ]Yet this distinction does not appear to Mr. Ricardo to be well founded!c. xxxi. p. [405]. 2d edit.

[† ]It is extraordinary that Mr. Ricardo (p. [400].) should have sanctioned these statements of M. Sismondi and Mr. Buchanan. Strictly, according to his own theory, the price of corn is always a natural or necessary price. In what sense then can he agree with these writers in saying, that it is like that of a common monopoly, or advantageous only to the landlords, and proportionably injurious to the consumers? (58)

[* ]Mr. Ricardo has quite misunderstood me, when he represents me as saying that rent immediately and necessarily rises or falls with the increased or diminished fertility of the land. (p. [404].) How far my former words would bear this interpretation the reader must judge; but I was not aware that they could be so construed; and having stated three causes as necessary to the production of rent, I could not possibly have meant to say that rent would vary always and exactly in proportion to one of them. I distinctly stated, indeed, that in the early periods of society, the surplus produce from the land, or its fertility, appears but little in the shape of rent. (59) Surely he has expressed himself most inadvertently while correcting me, by referring to the comparative scarcity of the most fertile land as the only cause of rent, (p. [403].) although he has himself acknowledged, that without positive fertility, no rent can exist. (p. [404].) If the most fertile land of any country were still very poor, such country could yield but very little rent.

[* ]The immediate motive for the cultivation of fresh land can only be the prospect of employing an increasing capital to greater advantage than on the old land. A rise in the market-price of corn could not alone furnish such a motive.

[† ]When a given portion of labour and capital yields smaller returns, whether on new land or old, the loss is generally divided between the labourers and capitalists, and wages and profits fall at the same time. This is quite contrary to Mr. Ricardo’s language. But the wages we refer to are totally different. He speaks of the cost of producing the necessaries of the labourer; I speak of the necessaries themselves. In the same language Mr. Ricardo says, (p. [114].) that the rise of rent never falls upon the farmer. Yet does not the fall of profits go to rent? It is of very little consequence to the farmer and labourer, even on Mr. Ricardo’s theory, that they continue to receive between them the same nominal sum of money, if that sum in exchange for necessaries is not worth half what it was before. (61)

[* ]Penal Code, Staunton, p. 158. The market-rate of interest at Canton is said, however, to be only from twelve to eighteen per cent. Id. note XVII.

[* ]Princ. of Polit. Econ. ch. i. p. [54]. 2d ed.

[† ]Mr. Ricardo has observed (p. [411].) in reference to the second cause which I have here stated, as tending to raise rents, “that no fall of wages can raise rents; for it will neither diminish the portion, nor the value of the portion of the produce which will be allotted to the farmer and labourer together.” But where, I would ask, will the high real wages of America finally go? to profits? or to rent? If labourers were permanently to receive the value of a bushel of wheat a day, none but the richest lands could pay the expense of working them. An increase of population and a fall of such wages would be absolutely necessary to the cultivation of poor land. How then can it be said that a fall of wages is not one of the causes of a rise of rents? (76)

[* ]Properly speaking, facility of production in necessaries can only be temporary, where there are gradations of land as far as barrenness, except when capital is prevented from increasing by the want of will to save. It may then be permanent. But though corn will, in that case, cost but little labour, its exchangeable value will be high, that is, it will command a great deal.

[* ]According to the calculations of Mr. Colquhoun, the value of our trade, foreign and domestic, and of our manufactures, exclusive of raw materials, is nearly equal to the gross value derived from the land. In no other large country probably is this the case.—Treatise on the Wealth, Power, and Resources of the British Empire, p. 96.

[* ]Rents may be said to have a tendency to rise, when more capital is ready to be laid out upon the old land, but cannot be laid out without diminished returns. When profits fall in manufactures and commerce from the diminished price of goods, capitalists will be ready to give higher rents for the old farms.

[† ]To the honour of Scotch cultivators it should be observed, that they have applied their capitals so very skilfully and economically, that at the same time that they have prodigiously increased the produce, they have increased the landlord’s proportion of it. The difference between the land-lord’s share of the produce in Scotland and in England is quite extraordinary —much greater than can be accounted for, either by the natural soil or the absence of tithes and poors-rates.—See Sir John Sinclair’s valuable Account of the Husbandry of Scotland; and the General Report not long since published—works replete with the most useful and interesting information on agricultural subjects.

[* ]See Evidence before the House of Lords, given by Arthur Young, p. 66.

[* ]The effects of importing foreign corn will be considered more particularly in the next section, and a subsequent part of this chapter.

[* ]Principles of Political Economy, ch. ii. p. [70, n.]. This passage was copied from the first edition. It is slightly altered in the second, p. [70]. but not so as materially to vary the sense.

[* ]I have hinted before, that profits may, without impropriety, be called a surplus. But, whether surplus or not, they are the most important source of wealth, as they are, beyond all question, the main source of accumulation.

[* ]Wealth of Nations, Book I. c. xi. p. 394. 6th edit.

[† ]Princ. of Polit. Econ. c. xxiv. p. [335]. 2d edit.

[‡ ]Ibid.

[* ][In original, ‘diminishing’.]

[* ]Mr. Ricardo always seems to assume, that increased difficulties thrown in the way of production will be overcome by increased price, and that the same quantity will be produced. But this is an unwarranted assumption. Where is the increased price to come from? An increase of difficulty in the actual state of a country’s resources will always tend to diminish produce.

[* ]Princ. of Polit. Econ. chap. i. p. [64]. 2d edit.

[† ]Id. p. [65].

[‡ ]Reports from the Lords on the Corn Laws, p. 66.

[* ]It is specifically this unusual application of common terms which has rendered Mr. Ricardo’s work so difficult to be understood by many people. It requires indeed a constant and laborious effort of the mind to recollect at all times what is meant by high and low rents, and high or low wages. In other respects, it | has always appeared to me that the style in which the work is written, is perfectly clear. It is never obscure, but when either the view itself is erroneous, or terms are used in an unusual sense.

[† ]Princ. of Polit. Econ. ch. i. p. [16].

[‡ ]This interpretation of the term rent is, I conceive, strictly consistent with my first definition of it. I call it that portion (not proportion) of the value of the produce which goes to the landlord; and if the value of the whole produce of any given quantity of land increases, the portion of value which goes to the landlord may increase considerably, although the proportion which it bears to the whole may diminish. Mr. Ricardo has himself expressly stated, p. [401]. that whatever sum the produce of land sells for above the costs of cultivating it, is money rent. But if it continually happens that money rent rises, and is at the same time of greater real value in exchange, although it bears a less proportion to the value of the whole produce from the land in question, it is quite obvious that neither money rent nor real rent is regulated by this proportion. (115)

[* ]It is of great importance always to recollect that the high price of corn from 1798 to 1814 was occasioned by the war and the seasons,—not by corn-laws; and that a country with open ports may be subjected to very great alternations of price in war and in peace.

[† ]If restrictions upon importation necessarily increased the quantity of labour and capital required to obtain corn, (122) they could not of course be defended for a moment, with a view to wealth and productive power. But if by directing capital to the land they occasion permanent improvements, the whole question is changed. Permanent improvements in agriculture are like the acquisition of additional land. Even however, if they had no effect of this kind, they might be desirable on other grounds yet more important. Late events must make us contemplate with no small alarm a great increase in the proportion of our manufacturing population, both with reference to the happiness and to the liberty of our country.

[* ]I refer to exchangeable value and rate of profits, not to abundance of conveniences and luxuries. (125) In almost all improvements in machinery, the state is ultimately more benefited than the producers, but not in reference to rate of profits and real value in exchange.

[* ]Princ. of Polit. Econ. ch. ii. p. [75].

[* ]That is, supposing the gradations were towards worse machinery, some of which it was necessary to use, but not otherwise. The reason why manufactures and necessaries will not admit of comparison with regard to rents is, that necessaries, in a limited territory, are always tending to the same exchangeable value, whether they have cost little or much labour; but manufactures, if not subjected to an artificial monopoly, must fall with the facility of producing them. We cannot therefore suppose the price to be given; but if we could, facility of production would, in both cases, be equally a measure of relief from labour.

[* ]Wealth of Nations, vol. i. Book I. c. xi. pp. 248–250. 6th edit.

[† ]Princ. of Polit. Econ. ch. xxiv. p. [334].

[‡ ]Vol. ii. p. 212.

[* ]The Schedule D. included every species of professions. The whole amounted to three millions, of which the professions were considered to be above a million.

[† ]It must always be recollected, that the national profits on land must be considered as including rents as well as the common agricultural profits.

[* ]Cottons are no more a peculiar product of this country than silks: and woe will, I fear, befal us, greater than ever we have yet experienced, if the prosperity of our cotton trade should become necessary to purchase the food of any considerable body of our people!

[† ]Under similar circumstances, with respect to capital, skill, &c., it is obvious that land of the same degree of barrenness could not be cultivated, if by the prevalence of prudential habits the labourers were well paid; but to forego the small increase of produce and population arising from the cultivation of such land, would, in a large and fertile territory, be a slight and imperceptible sacrifice, while the happiness which would result from it to the great mass of the population, would be beyond all price.

[* ]Mr. Ricardo himself is an instance of what I am stating. He is now become, by his talents and industry, a considerable landholder; and a more honourable and excellent man, a man who for the qualities of his head and heart more entirely deserves what he has earned, or employs it better, I could not point out in the whole circle of landholders.

It is somewhat singular that Mr. Ricardo, a considerable receiver of rents, should have so much underrated their national importance; while I, who never received, nor expect to receive any, shall probably be accused of overrating their importance. Our different situations and opinions may serve at least to shew our mutual sincerity, and afford a strong presumption, that to whatever bias our minds may have been subjected in the doctrines we have laid down, it has not been that, against which perhaps it is most difficult to guard, the insensible bias of situation and interest.