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rises in comparative value, because more labour is employed in the production of the last portion obtained, and not because a rent is paid to the landlord. The value of corn is regulated by the quantity of labour bestowed on its production on that quality of land, or with that portion of capital which pays no rent. Corn is not high because a rent is paid, but a rent is paid because corn is high ; and it has been justly observed by Mr Malthus, that no reduction would take place in the price of corn, although landlords should forego the whole of their rent. Such a measure would only enable some farmers to live like gentlemen ; but would not diminish the quantity of labour necessary to raise raw produce on the least productive land in cultivation.

It has been objected to this theory, that, according to Dr Smith, “the most desert moors in Norway and Scotland produce some sort of pasture for cattle, of which the milk and the increase are always more than sufficient, not only to maintain all the labour necessary for tending them, and to pay the ordinary profit to the farmer, or owner of the herd or Aock, but to afford some small rent to the landlord.'

This, however, is a very doubtful proposition; and we are rather inclined to Mr Ricardo's opinion, that in every country, from the rudest to the most improved, there is some land of such a quality that it cannot yield more than enough to replace the stock employed upon it, with the ordinary rate of profit. In America, we all know that this is the case; and yet, no one maintains that the principles which regulate rent are different in that country and in Europe. Perhaps the opinion, that all the lands in Britain yield rent, may have originated from the letting of large tracts of the inferior lands together, where, although a considerable portion might, if attempted to be let by itself, yield no rent, a rent may, notwithstanding, be afforded for some portions intermixed with the others, of a superior degree of fertility. But, if it were really true that every inch of ground in the British islands afforded a rent to the landlord after defraying the expenses of cultivation, the fact would be of no consequence whatever to the present question. It would, as we have already shown, be exactly the same thing to the cultivator, whether he paid a rent of ten quarters to a landlord for land yielding, with a certain expenditure, 100 quarters of corn, or employed the same sum in cultivating inferior land yielding only 90 quarters, for which he paid no rent. If it were possible always to obtain 100 quarters for every additional sum applied to the superior soils, no person, it is obvious, would ever have recourse to those of inferior fertility, or which would not yield equal quantities of produce with an equal expenditure of capital and labour. But the fact, that, in the progress of society, new land is

brought into cultivation, demonstrates that additional capital and labour cannot be applied with the same advantage as before on the old land. This, however, is all that is required to show the futility of this specious objection. The state of society in Great Britain may be such,—the demand for agricultural produce may be so great,—that every quality of land in the kingdom actually yields rent; but it is the same thing if there be any capital employed on land which yields only the return of stock with its ordinary profits, whether that capital be employed on new or on old land. That there is a very considerable quantity of capital employed in such a manner in this, and in every other country, is abundantly certain. A farmer who rents a farm, besides employing on it such a capital as will, at the existing prices of raw produce, enable him to pay his rent, to obtain the average rate of profit, and to replace his stock previous to the expiration of his lease, will also employ an additional capital, if it will only replace itself, and afford the usual profits. Whether he shall employ this additional capital or not, depends entirely on the fact, whether the price of raw produce be such as will repay his expenses and profits; for he knows he will have no additional rent to pay. Even at the expiration of his lease, his rent will not be raised; for if his landlord should require rent, because an additional capital had been employed, he would withdraw it, since, by employing it, he gets, by the supposition, only the ordinary and usual profits which he may obtain by any other employment of stock; and, therefore, he cannot afford to pay rent for it, unless the price of raw produce should further rise, or, which is the same thing, unless the capital last applied to the land yields more than the common and ordinary rate of profit. If it yields more than this, fresh capital will be laid out on the soil; and, if it yields less, it will be withdrawn ; so that, in every case, the capital last applied yields only the common and arerage rate of profit; that is to say, agricultural produce will, in every case, be sold at the sum which is barely necessary to cover the cost of its production on the lands last taken into cultivation, or to yield the ordinary rate of profit on the capital last applied to the old land. If it were not to sell for this sum, the newly broken up land would be thrown out of cultivation, or capital would be withdrawn from the old soils, so that the requisite supplies would no longer be obtained. In every case, therefore, whether the lands last cultivated pay rent or not, the exchangeable value of raw produce is regulated entirely by the cost of its production; and although it were true, that every rood of land in this country paid rent to the landlord, it would be equally true that the produce of that land could not be sold one fraction cheaper, after rents had been given up to the tenants, than at present; or, in other words, rent does not, under any circumstances whatever, enter into, or constitute a part of the price of raw produce, or of any species of commodities.

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We begin now to get on with our deduction :-but a good deal yet remains to be done; for it will immediately be seen, that a proper understanding of the nature and causes of rent, is but a step, though a very material one, towards ascertaining the laws by which the PROFITS OF STOCK are regulated.

Our readers know, that Dr Smith considered the fall of profit, which always takes place in the progress of society, and as countries advance in wealth and opulence, as a consequence of the accumulation of capital, and of its competition in all the different trades and businesses carried on in the same society. This opinion, which has since been espoused by Mr Malthus, M. Say, and many other writers, has, however, been shown, first by the “ Fellow of the University of Oxford,' and subsequently by Mr Ricardo, to be altogether destitute of foundation. When it is once admitted, indeed, that commodities are in every case bought by commodities, it is not easy to perceive how their multiplication can occasion any fall of their relative exchangeable values one with another. If, under any given circumstances, ten pairs of gloves exchanged for ten pairs of stockings, and ten quarters of wheat for ten pairs of boots, they will in the same circumstances continue, provided they are all increased in the same relative proportions, to preserve precisely the same exchangeable value one with another, to whatever extent their quantities may be augmented. Thus, supposing the capital engaged in the different branches of trade and industry to be adjusted in such a manner, that every branch yielded nearly the same rate of profit; it is evident, that any amount of additional capital which was invested in them all, according to the same ratio of distribution, would not sink the price of any one article;-cach would sell for precisely the same sum it sold for before; and, if wages remained stationary, the profits of stock would neither be increased nor diminished. If too much of one commodity, as of cotton, is manufactured, its relative value will fall, and the profits of stock employed in the cotton trade will be reduced; but such an effect can only be temporary. Some other department of industry must, at the same time, be understocked; and, yielding larger profits, will attract to itself the surplus capital employed in the cotton manufacture, and restore every thing to its former equilibrium.

* Say, Traité d'Economie Politique, 3me edit. tome 1. 147.

It is not, therefore, the competition caused by an increase of capital which reduces profits as society advances, but it is the necessity of having recourse to inferior soils to obtain the necessary supplies of food, coupled with the increase of taxation.

Dr Smith has justiy observed, that ' a man must always live • by his work, and his wages must at least be sufficient to main• tain him. They must, even upon most occasions, be some. what more; otherwise it would be impossible for him to bring

up a family; and the race of such workmen could not last be • yond the first generation.'

But as the price of commodities can only be increased by an increase of the quantity of labour required to bring them to market, and not by an increase of wages; it follows, that if corn or manufactured goods always sold at the same price, profits would be high or low in proportion as wages were low or high. But, when corn rises in price, because more labour is necessary to produce it, and it must do so as soon as recourse is had to inferior soils, or soils of a decreasing degree of fertility, that cause will not raise the price of manufactured goods, in the production of which no additional quantity of labour is required: They therefore continue to sell at the same price as before; but, as the wages of labour, which must always bear a certain

proportion to the price of raw produce, will then rise, it is obvious that the profits of stock must be proportionally diminished.

It is by this principle, of which Dr Smith was not aware, that we are enabled satisfactorily to account for the low rate of profit in all old settled and fully peopled countries, and for the slowness with which they accumulate capital and population. Profits, were other things stationary, would no doubt fall and rise according as taxes affecting the necessaries of life, and consequently the wages of labour, were increased or diminished; but, whatever may be the rate of taxation, whether it be high or low, profits must decline, as recourse is had to lands of inferior quality, or, in other words, as the real price, or the cost of production of raw produce, is increased.

Dr Smith and other political economists have frequently referred to the rapid progress made by the United States in the accumulation of capital and riches, as a proof of the superior advantages resulting from the employment of capital in agriculture. This opinion, however, is altogether erroneous. The rapid accumulation of wealth by the Americans, is a conse quence, not of their predilection for agriculture, but of the boundless extent of their fertile and unoccupied land. This enables them to raise a very large amount of raw produce at a comparatively small expense. The wages of workmen are high; but as every workman operates with the best machinery, that is to say, cultivates the best soils, a very large nett profit remains to his master. Capital, therefore, and consequently population, rapidly accumulate ; and, if the country is exempted from political convulsions, will continue to increase with the same rapidity, till the most fertile land having been brought under cultivation, recourse must be had to inferior soils. Should the real wages of labour continue equally high subsequent to this era, the profits of stock would be very much diminished; for labour, by being exerted on worse land, would yield a proportionably small produce; and out of this diminished produce, the labourer would have to receive as large a share as before. Wages, however, would not continue equally high: for the check which would then be given to the power to accumulate capital, by gradually lessening the demand for labour, would ultimately lower wages to the sum which was merely necessary to continue the race of labourers, or to furnish the mass of the people of the United States with those necessaries and comforts which they may consider as indispensable to their existence, and without which they would not be inclined to marry, or to encumber themselves with a family. After wages had sunk to this point, they could sink no lower. And if, in these circumstances, a great extension of manufacturing industry, or any other cause, should force recourse to be had to inferior soils to procure fresh supplies of raw produce, the profits of stock would immediately fall; and would continue to fall, and wages to rise, according as til, lage was extended, or as additional quantities of food were required.

It follows, from these principles, that the interest of the landlord is always opposed to that of every other class in the community. In the progress of society, and as poorer lands are brought under cultivation, the landlord does not only receive a greater share of the produce of the soil as rent, but the value of that share, because of the increased difficulty of its production, is augmented. If his rent were increased from 100 to 200 quarters, it would be more than doubled, -inasmuch as he would be able to command more than double the quantity of commodities in exchange for the 200 quarters :-—And as rents are generally agreed for, and paid in money, he would, under the circumstances supposed, receive more than double of his former money rent.

In like manner, if rent fell, the landlord would suffer two losses; he would be a loser of that portion of the raw produce VOL. XXX. NO. 59.

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