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According, therefore, as machinery is more or less durable, or according as the fixed capital employed in producing commodities approaches more or less to the nature of circulating capital, prices will be less or more affected by a rise of wages and a fall of profit. Mr Ricardo calculates, that when profits fall from 10 to 3 per cent., the goods produced with equal capitals will fall 68 per cent. if the machine would last

100 years. 28 per cent. if it would last

10 ditto. 107 13 per cent. if it would last

3 ditto. And little more than 6 per cent. if it would last

1 ditto. only It appears, then, that in proportion to the quantity and the durability of the fixed capital employed in any kind of production, the relative prices of those commodities on which such ca. pital is employed, will vary inversely as wages-that is, they will fall as wages rise. It appears, too, that no commodities whatever are raised in absolute price, merely because wages rise; that they never rise unless additional labour be bestowed on them ; but that all commodities, in the production of which fixed capital enters, not only do not rise with a rise of wages, but absolutely fall. And it further appears, that as the employers of labour'ers are altogether unable to indemnify themselves by raising the price of their goods, for any increase of wages they may have to pay to their workmen, a rise of wages is only another name for a fall of profits, and vice versa. These things appear to us to be clearly made out in the work before us,—and it is needless to enlarge on their importance. They enter deeply into all the investigations of political economy, and give a new aspect, indeed, to the whole of that science.

The theory, however, which teaches that the exchangeable value of a commodity can only be increased by an increase in the quantity of labour necessarily expended on its production, would not be complete, if it could be shown that Rent entered as a component part into price; for if this were really the case, it would follow, that prices must vary as rents vary, or that the one must rise and fall with every rise and fall of the other. It is therefore necessary briefly to inquire into the NATURE AND

It is not easy to imagine that any inquiry into a complex and difficult subject, could be more satisfactorily conducted than that of Mr Ricardo, regarding the nature of Rent: although, on this subject, he is not equally original as in other parts of his work. He has given a much better exposition of the principles which regulate the rise and fall of rent, than any other writer; but


the leading facts, which show that rent does not enter into price, were previously ascertained in two pamphlets of very great merit, published almost at the same instant by Mr Malthus, and a · Fellow of the University of Oxford.' Mr Ricardo's prin cipal merit consists in his having traced the ultimate consequences of this doctrine,-in having stripped it of the errors by which it had been encumbered,-and in having shown its importance to a right understanding of the fundamental principles of political economy.

Rent is properly—that portion of the produce of the earth which is paid by the farmer to the landlord for the use of the natural and inherent powers of the soil.' If buildings have been erected on a farm, or if it has been enclosed, drained, or in any way improved, by an expenditure of capital and labour, the sum which a farmer would then pay to the landlord for its use, would be composed not only of what we call rent, but of a remuneration for the use of the capital which had been laid out in improving the soil. In common language, these two sums are always confounded together, under the name of rent; but, in an inquiry of this nature, it is necessary to consider them as perfectly distinct

. The laws by which profits and rent are regulated, being totally different, those which regulate the one only, cannot be accurately ascertained, if they are not separately considered.

If any commodity could be had at all times, and without any exertion, it would have no exchangeable value, however necessary it might be to our comfort, or even existence. In many situations, water, from its great plenty, and from the case with which any person can make himself master of any quantity of it, has no value in exchange; and in no case would we give the smallest sum for innumerable barrels of atmospheric air. Now, on the same principle, it is evident, that if the supply of land was inexhaustible, and if it was all of the same quality, and equally well situated, no such thing as rent would ever be heard of'; for, assuredly, no person would choose to pay for a commodity, which he might get at pleasure for nothing.

On the first settling of any country abounding with rich and fertile land, there is never any rent; and it is only because land is of different qualities with respect to its productive powers; and because, in the progress of population, the supply of rich and fertile land becomes exhausted, and land of an inferior quality, or less advantageously situated, must be brought into cultivation, that rent is ever paid for the use of it.-- When, says Mr Ricardo, 'in the progress of society, land of the second degree of fertility is taken into cultivation, rent immediately commences on that of the first quality, and the amount of that rent will depend on the difference in the quality of these two portions of land. Where land of the third quality is taken into cultivation, rent immediately commences on the second, and it is regulated as before, by the difference in their productive powers. At the same time, the rent of the first quality will rise, for that must always be above the rent of the second, by the difference of the produce which they yield with a given quantity of capital and labour. With every step in the progress of population, which shall oblige a country to have recourse to lands of a worse quality, to enable it to raise its supply of food,-rent on all the more fertile land will rise.'

Now, the sole reason why rent begins to be paid on land of the first quality, whenever land of a secondary quality is taken into cultivation, is, because on the inferior land a greater expenditure of capital and labour is necessary to afford the same produce. When the wants of society force us to have recourse to poorer soils, rent immediately begins to be paid on land of the first quality, just because there cannot, in the same country, be two rates of profit :-and if we suppose, that with an equal espenditure of capital and labour, land, of different degrees of fertility, yields 100, 90, 80, 70, &c. quarters of wheat, the 10 quarters of excess on the first over the second, would, when they were both cultivated, really constitute rent, whether they were farmed by landlords or tenants ;-for the cultivator of the inferior land would obtain the same profits on his capital if he were to cultivate the richer land, and be able, over and above, to pay 10 quarters as rent. In like manner, the 20 quarters of excess of the first over the third, would, after lands of the third degree of fertility had been cultivated, constitute rent, and so on as lands of inferior quality were successively brought under cultivation.

• If then,' to use the words of Mr Ricardo,' good land existed in a quantity much more abundant than the production of food for the increasing population required, or if capital could be indefinitely employed without a diminished return on the old land, there could be no rise of rent; for rent invariably proceeds from the employment of an additional quantity of labour, with a proportionably less return.'

The raising of raw produce is extremely different from every other species of industry. In manufactures the worst machinery is first set in motion, and every day its powers are improved; and it is rendered capable of yielding a greater amount of produce with the same expense. The discovery of a new machine, or of a more expeditious and less expensive method of manufacturing, very soon supersedes the older and clumsier machinery previously in use; while the consequent competition never fails to reduce the price of commodities to the sum which the least expensive method of production necessarily requires for their manufacture.

In agriculture, on the contrary, the best machinery, that is, the best soils, are first brought under cultivation, and recourse is afterwards had to inferior soils, requiring a greater expenditure of capital and labour to produce the same supplies. The improvements made in the construction of farming implements, and the ameliorations of agricultural management, which occasionally occur in the progress of society, really reduce the price of raw produce, and, operating like the improvements made in manufacturing machinery, so far assimilate the two species of industry. But, in agriculture, the fall of price, which is permanent in manufactures, is only temporary. Any fall which may take place in the real price of raw produce, as it will enable every class of society to procure a greater quantity of it than before, in exchange for their manufactured commodities, or for their labour, must raise the profits of stock, and, of course, must lead to an increased accumulation of capital. But as the industry of a nation must always be in proportion to the amount of its capital, this accumulation necessarily leads to a greater demand for labour, to higher wages, to an increased population, and, consequently, to a further demand for raw produce, and to an increased cultivation. Agricultural improvements check, for a while, the necessity of having recourse to inferior soils ; but the check can only be temporary. The stimulus which they at the same time apply to population soon equalizes the demand with the supply; and, by a reaction of a different kind, raises prices, and forces the cultivation of poor lands.

Although, therefore, agricultural improvements really reduce the price of food, or raw produce raised on land of the best quality; yet the absolute necessity with a growing population, of having recourse to land of an inferior quality, must clevate its market price. Wheat may be raised in the Carse of Gowrie, or in the vale of Gloucester, at perhaps a fifth or a sixth part of the expense necessary to raise equal quantities of that grain in other districts of the country; but it cannot be sold one farthing cheaper than the produce of the poorer soils; for, if it were, the cultivators of the inferior land would be obliged to abandon their employment altogether, and the necessary supplies of food would no longer be obtained. It is all one to the consumers, whether, in an advanced stage of society, the excess of price over the cost of production on lands of the first quality, is paid to a landlord or farmer. It must be paid to the one or the other; for, without this rent, or, what is the very same thing, without this excess of price, none but the very best lands could be cultivated. Before the price of raw produce could be reduced so low as to yield nothing but the ordinary profits of stock, even from land of the best quality, all the inferior soils would be thrown out of cultivation; and, in this country, under these circumstanccs, perhaps not one-tenth part of the present amount of produce could be raised. *

The price, therefore, at which raw produce sells in the market, is its natural price; it is the price which is necessary to procure the requisite supply, and is not in the slightest degree influenced by either high or low rents. Rents are only paid by those lands which yield an excess of produce after paying the expenses of labour and the ordinary profits of stock; but in every progressive country, lands are always taking into cultivation, which yield at the time nothing but the profits of stock, and for which there can be no rent paid. Hence, it is evident, rent does not enter into the price of raw produce; for the price of that produce is regulated by the price of the portion raised on the very worst lands in cultivation, and which pay no rent.

Mr Ricardo is, therefore, right in affirming that raw produce

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* The notion of the Economists, that agriculture, because it yield. ed a surplus as rent over and above the expenses of cultivation, and the ordinary profits of stock, was the only productive species of industry, has never been so well exposed as in the following short passage. Nothing,' says Mr Ricardo,' 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 manufacturers are assisted, should have been pointed out as constituting its peculiar preeminence. 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. 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 preeminent for its limited powers.'

With every

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