The Online Library of Liberty

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• Advertisement to the Second Edition.
• Memoir of Robert Malthus.
• Principles of Political Economy.
• Introduction.
• Book I
• Chapter I.: Of the Definitions of Wealth and of Productive Labour.
• Section I.—: On the Definitions of Wealth.
• Section II.—: On Productive Labour.
• Chapter II.: On the Nature, Causes, and Measures of Value.
• Section I.—: On the Different Sorts of Value.
• Section II.—: Of Demand and Supply As They Affect Exchangeable Value.
• Section III.—: Of the Cost of Production As Affected By the Demand and Supply, and On the Mode of Representing Demand.
• Section IV.—: Of the Labour Which Has Been Employed On a Commodity Considered As a Measure of Its Exchangeable Value.
• Section V.—: Of the Labour Which a Commodity Will Command, Considered As a Measure of Value In Exchange.
• Section VI.—: On the Practical Application of the Measure of Value, and Its General Use and Advantages.
• Section VII.—: On the Variations In the Value of Money In the Same, and Different Countries.
• Chapter III.: Of the Rent of Land.
• Section I.—: Of the Nature and Causes of Rent.
• Section II.—: On the Necessary Separation of the Rent of Land From the Profits of the Cultivator and the Wages of the Labourer.
• Section III.—: Of the Causes Which Tend to Raise Rents In the Ordinary Progress of Civilized and Improved Societies.
• Section IV.—: Of the Causes Which Tend to Lower Rents.
• Section V.—: On the Dependance of the Actual Quantity of Produce Obtained From the Land, Upon the Existing Prices of Produce, and Existing Rents, Under the Same Agricultural Skill and the Same Value of Money.
• Section VI.—: Of the Connexion Between Great Comparative Wealth, and a High Comparative Price of Raw Produce.
• Section VII.—: On the Causes Which May Mislead the Landlord In Letting His Lands, to the Injury Both of Himself and the Country.
• Section VIII.—: On the Strict and Necessary Connection of the Interests of the Landlord and of the State.
• Section IX.—: General Remarks On the Surplus Produce of the Land.
• Chapter IV.: Of the Wages of Labour.
• Section I.—: On the Definition of the Wages of Labour, and Their Dependance Upon Supply and Demand.
• Section II.—: Of the Causes Which Principally Affect the Habits of the Labouring Classes.
• Section III.—: Of the Causes Which Principally Influence the Demand For Labour, and the Increase of the Population.
• Section IV.—: A Review of the Corn Wages of Labour From the Reign of Edward III.
• Section V.—: On the Conclusions to Be Drawn From the Preceding Review of the Prices of Corn and Labour During the Five Last Centuries.
• Chapter V.: Of the Profits of Capital.
• Section I.—: Of the Nature of Profits, and the Mode In Which They Are Estimated.
• Section II.—: Of the Limiting Principle of Profits.
• Section III.—: Of the Regulating Principle of Profits.
• Section IV.—: Of Profits As Affected By the Causes Practically In Operation.
• Section V. —: Remarks On Mr. Ricardo’s Theory of Profits.
• Chapter VI.: Of the Distinction Between Wealth and Value.
• Book II.
• Chapter I.: On the Progress of Wealth.
• Section I.—: Statement of the Particular Object of Inquiry.
• Section II.—: Of the Increase of Population Considered As a Stimulus to the Continued Increase of Wealth.
• Section III.—: Of Accumulation, Or the Saving From Revenue to Add to Capital, Considered As a Stimulus to the Increase of Wealth.
• Section IV.—: Of the Fertility of the Soil, Considered As a Stimulus to the Continued Increase of Wealth.
• Section V.—: Of Inventions to Save Labour, Considered As a Stimulus to the Continued Increase of Wealth.
• Section VI.—: Of the Necessity of a Union of the Powers of Production With the Means of Distribution, In Order to Ensure a Continued Increase of Wealth.
• Section VII.—: Of the Distribution Occasioned By the Division of Landed Property Considered As the Means of Increasing the Exchangeable Value of the Whole Produce.
• Section VIII.—: Of the Distribution Occasioned By Commerce, Internal and External, Considered As the Means of Increasing the Exchangeable Value of Produce.
• Section IX.—: Of the Distribution Occasioned By Personal Services and Unproductive Consumers, Considered As the Means of Increasing the Exchangeable Value of the Whole Produce.
• Section X.—: Application of Some of the Preceding Principles to the Distresses of the Labouring Classes Since 1815, With General Observations.

Section III.—

Of the Causes which tend to raise Rents in the ordinary Progress of civilized and improved Societies.

In tracing more particularly the laws which govern the rise and fall of rents, the main causes which practically tend to increase the difference between the price of the produce, and the expenses of cultivation including ordinary profits, require to be more specifically enumerated. The principal of these seem to be four:—1st, Such an accumulation of capital compared with the means of employing it, as will lower the profits of stock; 2dly, such an increase of population as will lower the corn wages of labour; 3dly, such agricultural improvements, or such increase of exertions as will diminish the number of labourers necessary to produce a given effect; and 4thly, such an increase in the price of agricultural produce, from increased demand, as, while it probably raises the money price of labour, or occasions a fall in the value of money, is nevertheless, accompanied by a diminution either temporary or permanent, of the money outgoings of the farmer, compared with his money returns.

If capital increases in some departments, and the additional quantity cannot be employed with the same profits as before, it will not remain idle, but will seek employment either in the same or in 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 funds for the maintenance of labour, the labourers must content themselves with a smaller quantity of necessaries. The value of produce will consequently rise; the same quantity of corn will set more labour in motion, and land may be cultivated which could not have been cultivated before.

These two first causes sometimes act so as to counterbalance one another. An increase of capital tends to raise the wages of labour, and a fall of wages tends to raise the profits of stock; but these are only temporary effects. In the natural and regular progress of a country towards its full complement of capital and population, the rate of profits and the corn wages of labour permanently fall together. Practically this is often effected by a rise in the money price of corn, accompanied by a rise, but not a proportionate rise, in the money wages of labour. The greater rise in the money price of corn as compared with labour, is more than counterbalanced to the cultivator by the diminished quantity of produce obtained by the same agricultural capital; and the profits 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 as compared with that of corn.

But this exact and regular rise in the money price of corn and labour is not necessary to the fall of profits. Profits and corn wages may 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, is, that an increased proportion of the produce obtained by a given quantity of labour should be absorbed in paying that labour. In the continued progress of cultivation, this is generally effected by a diminution of the produce, obtained by the same labour without a proportionate diminution of the quantity absorbed by labour, which leaves less for profits, at the same time that the corn wages of the labourer are diminished. But it is obvious that if a smaller quantity of produce be sufficient to remunerate both the capitalist and the labourer,* the outgoings neces sary to cultivation will be diminished, rents will tend to rise on all the old lands, and poorer lands may be cultivated with advantage.

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.

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 the 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.

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 restore 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 value of corn, or any fall in the corn wages of labour, or in the general rate of profits.

The very great improvements in agriculture which have taken place in this country are clearly demonstrated by the profits of stock having been as high in 1813 as they were nearly a hundred years before, when the land supported but little more than half the 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 was for many years before that period, undiminished, notwithstanding the many and great improvements which had been successively introduced into cultivation, both by the use of better implements, and by a more skilful system of managing the land. In fact, the increase of produce had gone almost wholly to the increase of rents and the payment of taxes, tithes, and poor’s rates.

It may be added that, when in particular districts, improvements are introduced which tend to diminish the costs of production, the advantages derived from them go immediately, upon the renewal of leases, to the landlords, as the profits of stock must necessarily be regulated by competition, according to the general average of the whole country. 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.

It must be allowed then, that facility of production in necessaries,* unlike facility of production in all other commodities, is rarely or never attended with a permanent fall of their value. They are the only commodities of which it can be said that their permanent command of labour has a constant tendency to keep pace with the increase of 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 money price of agricultural produce from increased demand, as while it raises the money price of labour, or lowers the value of money, is accompanied by a comparative diminution, either temporary or permanent, in the money outgoings of the farmer.†

I have already adverted to a rise in the money price of raw produce, which may take place in consequence of a regular increase of capital and population, and a regular fall of profits and corn wages. 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 a diminished 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, in which case labour would become extremely productive in the purchase of all foreign commodities, and rents might rise without a fall of profits or wages.

The state of money prices, and the rapid progress of cultivation in the United States of America, tend strongly to illustrate the case here supposed. The price of wheat in the eastern states has been often nearly as high as in France and Flanders; and owing to the continued demand for hands, the money price of day-labour has been at times nearly double what it is in England.* But this high price of corn and labour has given great facilities to their 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 with the same advantage, nor could equal rents have been obtained with the same rate of profits and the same corn wages of labour.

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 had been 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 the money price of 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 labour and commodities, or a 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, and this is one of the signal instances in which the value of money arising from incidental causes entirely overwhelmed and obscured the effects arising from the necessary cause. Profits instead of falling rose; and the value of money ought therefore to have risen, and the money price of labour to have fallen; but the secondary causes arising from the demand for corn and labour, and the increasing money value of our exported commodities quite overcame the natural effects of the rise of profits, and occasioned a very decided fall, not only in the value of our currency but in the value of our bullion compared with labour. 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 proved by the acknowledged fact, that the rate of interest and profits was higher in the later period than the earlier, while the corn wages of labour were nearly the same. But still the profits were not so much higher as not to have rendered the interval extremely favourable to the rise of rents. This rise, during the interval in question, was the theme of universal remark; and though a severe check, from a combination of 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 is going on, to encourage the cultivation of fresh land and the formation of increased rents.

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 money value of their amount in foreign countries was greatly to increase, would bring back a great increase of money value in return, which increase could not fail to increase the money price of labour and raw produce. The demand for agricultural as well as manufactured produce would thus 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.

This result generally takes place from the introduction of improved 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 increased raw products;* whereas, in comparatively poor countries, with few manufactures and little foreign commerce, the value of their raw produce, though small compared with their extent of territory, 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 money wages of commercial and manufacturing labour. This will naturally have an immediate effect upon the price of corn, and an advance in the price 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 money 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 the price of 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 be entirely removed from the land, a part of the advantage so derived is permanent; together with the whole of that which may be occasioned by a greater permanent rise in the price of corn than in some of the materials of the farmer’s capital.

It is acknowledged that, when a fall takes place in the value of money, taxed commodities will not rise in the same proportion with others; and, on the supposition of such fall 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 often increased by stimulants, such a fall, whether arising generally from an increased supply from the mines, or partially from a demand for corn and labour in a particular country, can scarcely fail to encourage the outlay of more capital in agriculture, to increase the power of cultivating poorer lands, and to advance rents.

In speaking, however, of the advantages sometimes derived from a fall in the value of money, it should always be recollected, that if it goes to a greater extent than can be permanently maintained—an event very likely to take place, it will surely be followed by a retrograde movement, which, though it may not undo all the effects of the previous encouragement given to production, in reference to the general wealth of the country, will be felt by all the parties concerned, landlords, capitalists, and labourers, as so painful a reverse that they may well wish that they had not been subjected to the stimulus. Still, however, it is proper to consider the effects of such a stimulus during the time it lasts.

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 money 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.

Of the great additional quantity of capital employed upon the land in this country during the twenty years, from 1793 to 1813, 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 was extended, and rents rose, although one of the instruments of production, capital, was dearer.

In the same manner a fall of profits, and improvements in agriculture, or even the latter separately, might raise rents, notwithstanding a rise of corn 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 greater advance of labour and 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 relatively cheaper, and the difference between the price of produce and the expenses of cultivation increases, rents naturally rise. It follows 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.

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 production, 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 not necessarily be in proportion to the extension of cultivation or to the increase of produce.

A slight rise in the value of corn 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 is often greater than the increase of rents. We frequently 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, bears an increasing proportion to the amount of rents, unless counterbalanced by extraordinary improvements in the modes of cultivation.†

In the early state of cultivation upon the Metayer system, with small capitals, the proportion of the produce which went to the landlord was generally one half. Even in the United States, where profits and corn wages have been such as would allow of a large transfer to the landlords, produce seems to have increased faster than rents. And according to the returns made to the board of agriculture in 1813, the average proportion which rent bears to the value of the whole produce seems to be little more than one-fifth;* whereas formerly, when there was more land in pasture, less capital employed, and less produce obtained, 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 may have a less share of the whole produce, yet this less share from the great increase of the produce, owing to the conversion of natural pastures into arable land, will command more labour, and consequently be of greater value to him. 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, the value of his rent, independent of nominal price, will be increased in the proportion of from three to four.

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 a rising market price of raw produce, occasioned either by a great demand for it in foreign countries, or by the extension of commerce and manufactures.

[* ] Mr. Ricardo has observed (p. 499, 3rd edit.) 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.” And yet in reality there is no other rise in the value of corn, but that which is accompanied by a fall in the corn wages of labour. The fact is, that the value allotted to the farmer and labourer together, measured in labour, or money of a fixed value, is very far from remaining the same. All his calculations are built upon the fundamental error of omitting the consideration of profits in estimating the value of wages, and thus making the value of labour rise, instead of making it constant. The value obtained by a given quantity of labour, or the value allotted to the farmer and labourer together, must always fall with the fall of profits. If it does not in Mr. Ricardo’s money, it is precisely because his money is so constructed as to vary with the article it measures. The high corn wages of America will finally go to rent, not to profits. If labourers were permanently to receive the value of half 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 very high corn wages are 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?

[* ] 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 power or will to save, arising from bad government. It may then be permanent. But though corn will, in that case, cost but little labour, the labour which it will command, or its value, will be comparatively high.

[† ] This cause is partly included in the preceding ones; but as it frequently occurs, and has a different origin, it is worth while to consider it separately, and trace its practical operation.

[* ] According to Pitkin’s Statistical View of the United States, (p. 112, 2nd ed.) the average price of the bushel of wheat for eleven years, from 1806 to 1816 inclusive, at the principal places of exportation, was rather above 1½ dollars, or 54 shillings per quarter; and, according to Fearon’s Sketches, common labour was above a dollar a day.

The state of things in 1821 was essentially different, and shews how much the value of money in any country depends upon the demand and supply of produce. Corn and labour, it is said, had fallen at that time one half. The former high prices were no doubt in part owing to paper, but before the war with England, for seven years out of the eleven referred to, silver and paper were at par, and during this period wheat at the ports of the Eastern States was above 50 shillings a quarter. A rise in the price of corn, and other sorts of raw produce in an exporting country with plenty of good land, enables it to purchase money with a smaller quantity of labour, which is likely to render it cheap, or to make the money price of labour high.

[* ] During the period alluded to, corn rose far beyond what was necessary to defray the increased expense of freight, insurance, &c., occasioned by the war. The cause of the rise was therefore, independent of the increased cost of importation. It doubtless originated in the profuse expenditure of the state, and the increased activity of commercial and manufacturing industry at the time.—Ed.

[* ] 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.

[* ] This would in fact be a fall in the corn wages of labour, though it might be made up to the labourer by the comparative cheapness of some other articles, and more constant employment for all the members of his family.

[* ] 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 old farms.

[* ] This, it must be recollected, is upon the supposition above adverted to, that the farmer has had the means and the will to employ all the capital, both fixed and circulating, which can be applied at the actual rate of profits.

[† ] 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 landlord’s share of the produce in Scotland and in England is quite extraordinary—greater than can be accounted for by the absence of tithes and poor’s-rates. It must be referred therefore to superior skill and economy, and improvements in cultivation.—See Sir John Sinclair’s valuable Account of the Husbandry of Scotland; and the General Report, published in 1813 and 14—works replete with the most useful and interesting information on agricultural subjects.

[* ] See Evidence before the House of Lords, given by Arthur Young, in the Report respecting the corn laws, 1814, p. 66.

[† ] In that state of things where land is in great abundance, and rents very low, the capital, and particularly the fixed capital employed, is generally very inconsiderable. Mr. Ricardo, in illustrating his doctrine of rent, has supposed a capital of £3000 employed with low corn wages to obtain a produce worth £720, before the commencement of rent. But this is so directly contrary to the real state of things before rent has commenced, as to destroy all just illustration. In the present advanced state of cultivation under a large mass of rents, a capital of £1000 is considered as adequate to obtain the above value of produce. It was the very disproportionate amount of capital, with the low corn wages assumed, which enabled Mr. Ricardo to contemplate an extraordinary rise of rents, occasioned exclusively by a transfer from profits. This apparent result was further assisted by the adoption of a money as his measure of value, which, (as I have already shown, p. 124-125) must necessarily vary with the commodity which it was to measure. When all labour, all raw products, and many manufactured products had risen in his money, he still supposed his money to remain of the same value, whereas it had in fact fallen in value from the fall of profits, without which fall the appearances he contemplates could not possibly take place.