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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 cam pital

. 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 de mand 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 cul. tivation 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,

recourse to land of an inferior quality, must elevate 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 on ther 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, with

of having

out 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 interior soils would be thrown out of cultivation; and, in this country, under these circumstances, 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 yielded 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

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 flock, 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. I 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, withi 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 fun tility of this specious objection. The state of society in Great Britain may be such,--the demand for agricultural produce may be so greaty--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 à farm, besides employing on it such a capital as wills at the existing prices of raw produce, enable him to pay his rent, to ob: tain 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 average rate of profit; that is to say, agricul*tural 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 althougħ 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.

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 ;-each 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.

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