An Inquiry into the Nature and Progress of Rent
Thomas Robert Malthus
[1815 / Part 2 of 2]
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
procuring 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 is over, 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lower, the whole of the commodity would be withdrawn from the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 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 show at once the
necessity of the actual price of corn to the actual produce, 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.
I hope to be excused for dwelling a little, and 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 the highest
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.
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, etc., etc. 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 obviously inadequate to
account for the actual differences in the price of grain, observable
in countries at no great distance from each other, and at nearly the
same distance from the mines.
I entirely agree with him, that it is of great
use to inquire into the causes of high price; as, from the result of
such inquiry, 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 which
occasion the differences in this price, so observable in different
countries.
I have no hesitation in stating that, independently of
irregularities in the currency of a country,(13*) and other
temporary and accidental circumstances, the cause of the high
comparative money price of corn is its high comparative real price,
or the greater quantity of capital and labour which must be employed
to produce it: and that the reason why the real price of corn is
higher and continually rising in countries which are already rich,
and still advancing in prosperity and population, is to be found in
the necessity of resorting constantly to poorer land - to machines
which require a greater expenditure to work them - and which
consequently occasion each fresh addition to the raw produce of the
country to be purchased at a greater cost - in short, it is to be
found in the important truth that corn, in a progressive country, is
sold at the price necessary to yield the actual supply; and that, as
this supply becomes more and more difficult, the price rises in
proportion.(14*)
The price of corn, as determined by these causes, will of course
be greatly modified by other circumstances; by direct and indirect
taxation; by improvements in the modes of cultivation; by the saving
of labour on the land; and particularly by the importations of
foreign corn. The latter cause, indeed, may do away, in a
considerable degree, the usual effects of great wealth on the price
of corn; and this wealth will then show itself in a different form.
Let us suppose seven or eight large countries not very distant
from each other, and not very differently situated with regard to
the mines. Let us suppose further, that neither their soils nor
their skill in agriculture are essentially unlike; that their
currencies are in a natural state; their taxes nothing; and that
every trade is free, except the trade in corn. Let us now suppose
one of them very greatly to increase in capital and manufacturing
skill above the rest, and to become in consequence much more rich
and populous. I should say, that this great comparative increase of
riches could not possibly take place, without a great comparative
advance in the price of raw produce; and that such advance of price
would, under the circumstances supposed, be the natural sign and
absolutely necessary consequence, of the increased wealth and
population of the country in question.
Let us now suppose the same countries to have the most perfect
freedom of intercourse in corn, and the expenses of freight, etc. to
be quite inconsiderable. And let us still suppose one of them to
increase very greatly above the rest, in manufacturing capital and
skill, in wealth and population. I should then say, that as the
importation of corn would prevent any great difference in the price
of raw produce, it would prevent any great difference in the
quantity of capital laid out upon the land, and the quantity of corn
obtained from it; that, consequently, the great increase of wealth
could not take place without a great dependence on the other nations
for corn; and that this dependence, under the circumstances
supposed, would be the natural sign, and absolutely necessary
consequence of the increased wealth and population of the country in
question.
These I consider as the two alternatives necessarily belonging to
a great comparative increase of wealth; and the supposition here
made will, with proper restrictions, apply to the state of Europe.
In Europe, the expenses attending the carriage of corn are often
considerable. They form a natural barrier to importation; and even
the country which habitually depends upon foreign corn, must have
the price of its raw produce considerably higher than the general
level. Practically, also, the prices of raw produce, in the
different countries of Europe, will be variously modified by very
different soils, very different degrees of taxation, and very
different degrees of improvement in the science of agriculture.
Heavy taxation, and a poor soil, may occasion a high comparative
price of raw produce, or a considerable dependence on other
countries, without great wealth and population; while great
improvements in agriculture and a good soil may keep the price of
produce low, and the country independent of foreign corn, in spite
of considerable wealth. But the principles laid down are the general
principles on the subject; and in applying them to any particular
case, the particular circumstances of such case must always be taken
into consideration.
With regard to improvements in agriculture, which in similar
soils is the great cause which retards the advance of price compared
with the advance of produce; although they are sometimes very
powerful, they are rarely found sufficient to balance the necessity
of applying to poorer land, or inferior machines. In this respect,
raw produce is essentially different from manufactures.
The real price of manufactures, the quantity of labour and
capital necessary to produce a given quantity of them, is almost
constantly diminishing; while the quantity of labour and capital,
necessary to procure the last addition that has been made to the raw
produce of a rich and advancing country, is almost constantly
increasing. We see in consequence, that in spite of continued
improvements in agriculture, the money price of corn is ceteris
paribus the highest in the richest countries, while in spite of this
high price of corn, and consequent high price of labour, the money
price of manufactures still continues lower than in poorer
countries.
I cannot then agree with Adam Smith, in thinking that the low
value of gold and silver is no proof of the wealth and flourishing
state of the country, where it takes place. Nothing of course can be
inferred from it, taken absolutely, except the abundance of the
mines; but taken relatively, or in comparison with the state of
other countries, much may be inferred from it. If we are to measure
the value of the precious metals in different countries, and at
different periods in the same country, by the price of corn and
labour, which appears to me to be the nearest practical
approximation that can be adopted (and in fact corn is the measure
used by Adam Smith himself), it appears to me to follow, that in
countries which have a frequent commercial intercourse with each
other, which are nearly at the same distance from the mines, and are
not essentially different in soil; there is no more certain sign, or
more necessary consequence of superiority of wealth, than the low
value of the precious metals, or the high price of raw produce.(15*)
It is of importance to ascertain this point; that we may not
complain of one of the most certain proofs of the prosperous
condition of a country.
It is not of course meant to be asserted, that the high price of
raw produce is, separately taken, advantageous to the consumer; but
that it is the necessary concomitant of superior and increasing
wealth, and that one of them cannot be had without the other.(16*)
With regard to the labouring classes of society, whose interests
as consumers may be supposed to be most nearly concerned, it is a
very short-sighted view of the subject, which contemplates, with
alarm, the high price of corn as certainly injurious to them. The
essentials to their well being are their own prudential habits, and
the increasing demand for labour. And I do not scruple distinctly to
affirm, that under similar habits, and a similar demand for labour,
the high price of corn, when it has had time to produce its natural
effects, so far from being a disadvantage to them, is a positive and
unquestionable advantage. To supply the same demand for labour, the
necessary price of production must be paid, and they must be able to
command the same quantities of the necessaries of life, whether they
are high or low in price.(17*) But if they are able to command the
same quantity of necessaries, and receive a money price for their
labour, proportioned to their advanced price, there is no doubt
that, with regard to all the objects of convenience and comfort,
which do not rise in proportion to corn (and there are many such
consumed by the poor), their condition will be most decidedly
improved.
The reader will observe in what manner I have guarded the
proposition. I am well aware, and indeed have myself stated in
another place, that the price of provisions often rises, without a
proportionate rise of labour: but this cannot possibly happen for
any length of time, if the demand for labour continues increasing at
the same rate, and the habits of the labourer are not altered,
either with regard to prudence, or the quantity of work which he is
disposed to perform.
The peculiar evil to be apprehended is, that the high money price
of labour may diminish the demand for it; and that it has this
tendency will be readily allowed, particularly as it tends to
increase the prices of exportable commodities. But repeated
experience has shown us that such tendencies are continually
counterbalanced, and more than counterbalanced by other
circumstances. And we have witnessed, in our own country, a greater
and more rapid extension of foreign commerce, than perhaps was ever
known, under the apparent disadvantage of a very great increase in
the price of corn and labour, compared with the prices of
surrounding countries.
On the other hand, instances everywhere abound of a very low
money price of labour, totally failing to produce an increasing
demand for it. And among the labouring classes of different
countries, none certainly are so wretched as those, where the demand
for labour, and the population are stationary, and yet the prices of
provisions extremely low, compared with manufactures and foreign
commodities. However low they may be, it is certain, that under such
circumstances, no more will fall to the share of the labourer than
is necessary just to maintain the actual population; and his
condition will be depressed, not only by the stationary demand for
labour, but by the additional evil of being able to command but a
small portion of manufactures or foreign commodities, with the
little surplus which he may possess. If, for instance, under a
stationary population, we suppose, that in average families two
thirds of the wages estimated in corn are spent in necessary
provisions, it will make a great difference in the condition of the
poor, whether the remaining one third will command few or many
conveniencies and comforts; and almost invariably, the higher is the
price of corn, the more indulgences will a given surplus purchase.
The high or low price of provisions, therefore, in any country is
evidently a most uncertain criterion of the state of the poor in
that country. Their condition obviously depends upon other more
powerful causes; and it is probably true, that it is as frequently
good. or perhaps more frequently so, in countries where corn is
high, than where it is low.
At the same time it should be observed, that the high price of
corn, occasioned by the difficulty of procuring it, may be
considered as the ultimate check to the indefinite progress of a
country in wealth and population. And, although the actual progress
of countries be subject to great variations in their rate of
movement, both from external and internal causes, and it would be
rash to say that a state which is well peopled and proceeding rather
slowly at present, may not proceed rapidly forty years hence; yet it
must be owned, that the chances of a future rapid progress are
diminished by the high prices of corn and labour, compared with
other countries.
It is, therefore, of great importance, that these prices should be
increased as little as possible artificially, that is, by taxation.
But every tax which falls upon agricultural capital tends to check
the application of such capital, to the bringing of fresh land under
cultivation, and the improvement of the old. It was shown, in a
former part of this inquiry, that before such application of capital
could take place, the price of produce, compared with the
instruments of production, must rise sufficiently to pay the farmer.
But, if the increasing difficulties to be overcome are aggravated by
taxation, it is necessary, that before the proposed improvements are
undertaken, the price should rise sufficiently, not only to pay the
farmer, but also the government. And every tax, which falls on
agricultural capital, either prevents a proposed improvement, or
causes it to be purchased at a higher price.
When new leases are let, these taxes are generally thrown off
upon the landlord. The farmer so makes his bargain, or ought so to
make it, as to leave himself, after every expense has been paid, the
average profits of agricultural stock in the actual circumstances of
the country, whatever they may be, and in whatever manner they may
have been affected by taxes, particularly by so general a one as the
property tax. The farmer, therefore, by paying a less rent to his
landlord on the renewal of his lease, is relieved from any peculiar
pressure, and may go on in the common routine of cultivation with
the common profits. But his encouragement to lay out fresh capital
in improvements is by no means restored by his new bargain. This
encouragement must depend, both with regard to the farmer and the
landlord himself, exclusively on the price of produce, compared with
the price of the instruments of production; and, if the price of
these instruments have been raised by taxation, no diminution of
rent can give relief. It is, in fact, a question, in which rent is
not concerned. And, with a view to progressive improvements, it may
be safely asserted, that the total abolition of rents would be less
effectual than the removal of taxes which fall upon agricultural
capital.
I believe it to be the prevailing opinion, that the greatest
expense of growing corn in this country is almost exclusively owing
to the weight of taxation. Of the tendency of many of our taxes to
increase the expenses of cultivation and the price of corn, I feel
no doubt; but the reader will see from the course of argument
pursued in this inquiry, that I think a part of this price, and
perhaps no inconsiderable part, arises from a cause which lies
deeper, and is in fact the necessary result of the great superiority
of our wealth and population, compared with the quality of our
natural soil and the extent of our territory.
This is a cause which can only be essentially mitigated by the
habitual importation of foreign corn, and a diminished cultivation
of it at home. The policy of such a system has been discussed in
another place; but, of course, every relief from taxation must tend,
under any system, to make the price of corn less high, and
importation less necessary.
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(18*) - the profits of stock.
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 reletting 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.
In the first place, he may be induced, by the immediate prospect
of an exorbitant rent, offered by farmers bidding against each
other, to let his land to a tenant without sufficient capital to
cultivate it in the best way, and make the necessary improvements
upon it. This is undoubtedly a most short-sighted policy, the bad
effects of which have been strongly noticed by the most intelligent
land surveyors in the evidence lately brought before Parliament; and
have been particularly remarkable in Ireland, where the imprudence
of the landlords in this respect, combined, perhaps, with some real
difficulty of finding substantial tenants, has aggravated the
discontents of the country, and thrown the most serious obstacles in
the way of an improved system of cultivation. The consequence of
this error is the certain loss of all that future source of rent to
the landlord, and wealth to the country, which arises from increase
of produce.
The second error to which the landlord is liable, is that of
mistaking a mere temporary rise of prices, for a rise of sufficient
duration to warrant an increase of rents. It frequently happens,
that a scarcity of one or two years, or an unusual demand arising
from any other cause, may raise the price of raw produce to a
height, at which it cannot be maintained. And the farmers, who take
land under the influence of such prices, will, in the return of a
more natural state of things, probably break, and leave their farms
in a ruined and exhausted state. These short periods of high price
are of great importance in generating capital upon the land, if the
farmers are allowed to have the advantage of them; but, if they are
grasped at prematurely by the landlord, capital is destroyed,
instead of being accumulated; and both the landlord and the country
incur a loss, instead of gaining a benefit.
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 lands 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 the cost of production, and the same quantity
could not be produced from our own soil at a less price, even
without rent. 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 care, and add to
it whenever it is possible. But when this laudable spirit prevails
among a tenantry, it is of the very utmost importance to the
progress of riches, and the permanent increase of rents, that it
should have the power as well as the will to accumulate; and an
interval of advancing prices, not immediately followed by a
proportionate rise of rents, furnishes the most effective powers of
this kind. These intervals of advancing prices, when not succeeded
by retrograde movements, most powerfully contribute to the progress
of national wealth. And practically I should say, that when once a
character of industry and economy has been established, temporary
high profits are a more frequent and powerful source of
accumulation, than either an increased spirit of saving, or any
other cause that can be named.(19*) It is the only cause which seems
capable of accounting for the prodigious accumulation among
individuals, which must have taken place in this country during the
last twenty years, and which has left us with a greatly increased
capital, notwithstanding our vast annual destruction of stock, for
so long a period.
Among the temporary causes of high price, which may sometimes
mislead the landlord, it is necessary to notice irregularities in
the currency. When they are likely to be of short duration, they
must be treated by the landlord in the same manner as years of
unusual demand. But when they continue so long as they have done in
this country, it is impossible for the landlord to do otherwise than
proportion his rent accordingly, and take the chance of being
obliged to lessen it again, on the return of the currency to its
natural state.
The present fall in the price of bullion, and the improved state
of our exchanges, proves, in my opinion, that a much greater part of
the difference between gold and paper was owing to commercial
causes, and a peculiar demand for bullion than was supposed by many
persons; but they by no means prove that the issue of paper did not
allow of a higher rise of prices than could be permanently
maintained. Already a retrograde movement, not exclusively
occasioned by the importations of corn, has been sensibly felt; and
it must go somewhat further before we can return to payments in
specie. Those who let their lands during the period of the greatest
difference between notes and bullion, must probably lower them,
whichever system may be adopted with regard to the trade in corn.
These retrograde movements are always unfortunate; and high rents,
partly occasioned by causes of this kind, greatly embarrass the
regular march of prices, and confound the calculations both of the
farmer and landlord.
With the cautions here noticed in letting farms, the landlord may
fairly look forward to a gradual and permanent increase of rents;
and, in general, not only to an increase proportioned to the rise in
the price of produce, but to a still further increase, arising from
an increase in the quantity of produce.
If in taking rents, which are equally fair for the landlord and
tenant, it is found that in successive lettings they do not rise
rather more than in proportion to the price of produce, it will
generally be owing to heavy taxation.
Though it is by no means true, as stated by the Economists, that
all taxes fall on the net rents of the landlords, yet it is
certainly true that they are more frequently taxed both indirectly
as well as directly, and have less power of relieving themselves,
than any other order of the state. And as 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. But the degree in
which the different classes of society are affected by taxes, is in
itself a copious subject, belonging to the general principles of
taxation, and deserves a separate inquiry.
NOTES:
1. I 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.
2. J.B. Say, Traite d'economie politique, 2nd ed., 2 vols.
(Paris, 1814) 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.
3. J.C.L.S. de Sismondi, De la richesse commerciale, 2 vols.
(Geneva, 1803), i, p. 49.
4. Adam Smith, An inquiry into the nature and causes of the
wealth of nations, ed. D. Buchanan, 4 vols. (Edinburgh, 1814) iv, p.
134.
> 5. Smith, Wealth of nations, iii, p. 212.
6. 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, to 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, etc. as will occasion an increase of population.
7. I have supposed some check to the supply of the cotton
machinery in this case. If there was no check whatever, the effects
wold show themselves in excessive profits and excessive wages,
without an excess above the cost of production.
8. Smith, Wealth of nations, iv, p. 35.
9. The more general surplus here alluded to is meant to include
the profits of the farmer, as well as the rents of the landlord;
and, therefore, includes the whole fund for the support of those who
are not directly employed upon the land. Profits are, in reality, a
surplus, as they are in no respect proportioned (as intimated by the
Economists) to the wants and necessities of the owners of capital.
But they take a different course in the progress of society from
rents, and it is necessary, in general, to keep them quite separate.
10. 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. P.
Colquhoun, Treatise on the wealth, power, and resources of the
British Empire, 2nd ed. (1815), p. 96. The whole annual produce is
estimated at about 430 millions, and the products of agriculture at
about 216 millions.
11. 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 increase the landlord's proportion
ot it. The difference between the landlord'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 poor's rates. See Sir John Sinclair's valuable An account
of husbandry in Scotland (Edinburgh, 1812) and General Report, 4
vols. (Edinburgh, 1814) not long since published -- works replete
with the most useful and interesting information on agricultural
subjects.
12. See BPP, 1814-5, V, p. 66, evidence before the House of
Lords, given by Arthur Young.
13. In all our discussions we should endeavour, as well as we
can, to separate that part of high price, which arises from excess
of currency, from that part, which is natural, and arises from
permanent causes. In the whole course of this argument, it is
particularly necessary to do this.
14. It will be observed, that l have said in a progressive
country; that is, in a country which requires yearly the employment
of a greater capital on the land, to support an increasing
population. If there were no question about fresh capital, or an
increase of people, and all the land were good, it would not then be
true that corn must be sold at its necessary price. The actual price
might be diminished; and if the rents of land were diminished in
proportion. the cultivation might go on as before, and the same
quantity be produced lt very rarely happens, however, that all the
lands of a country actually occupied are good, and yield a good net
rent. And in all cases, a fall of prices must destroy agricultural
capital during the currency of leases; and on their renewal there
would not be the same power of production.
15. This conclusion may appear to contradict the doctrine of the
level of the precious metals. And so it does, if by level be meant
level of value estimated in the usual way. I consider the doctrine,
indeed, as quite unsupported by facts, and the comparison of the
precious metals to water perfectly inaccurate. The precious metals
are always tending to a state of rest, or such a state of things as
to make their movement unnecessary. But when this state of rest has
been nearly attained, and the exchanges of all countries are nearly
at par, the value of the precious metals in different countries,
estimated in corn and labour, or the mass of commodities, is very
far indeed from being the same. To be convinced of this, it is only
necessary to look at England, France, Poland, Russia, and India,
when the exchanges are at par. That Adam Smith. who proposes labour
as the true measure of value at all times and in all places, could
look around him, and vet say that the precious metals were always
the highest in value in the richest countries, has always appeared
to me most unlike his usual attention to found his theories on
facts.
16. Even upon the system of importation, in the actual state and
situation of the countries of Europe, higher prices must accompany
superior and increasing wealth.
17. We must not be so far deceived by the evidence before
Parliament, relating to the want of connection between the prices of
corn and of labour, as to suppose that they are really independent
of each other. The price of the necessaries of life is, in fact, the
cost of producing labour. The supply cannot proceed, if it be not
paid; and though there will always be a little latitude, owing to
some variations of industry and habits, and the distance of time
between the encouragement to population and the period of the
results appearing in the markets: yet it is a still greater error,
to suppose the price of labour unconnected with the price of corn,
than to suppose that the price of corn immediately and completely
regulates it. Corn and labour rarely march quite abreast; but there
is an obvious limit, beyond which they cannot be separated. With
regard to the unusual exertions made by the labouring classes in
periods of dearness, which produce the fall of wages noticed in the
evidence, they are most meritorious in the individuals, and
certainly favour the growth of capital. But no man of humanity could
wish to see them constant and unremitted. They are most admirable as
a temporary relief; but if they were constantly in action, effects
of a similar kind would result from them, as from the population of
a country being pushed to the very extreme limits of its food. There
would be no resources in a scarcity. I own I do not see, with
pleasure, the great extension of the practice of task work. To work
really hard during twelve or fourteen hours in the day, for any
length of time, is too much for a human being. Some intervals of
ease are necessary to health and happiness: and the occasional abuse
of such intervals is no valid argument against their use.
18. I have hinted before, in a note, 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.
19. Adam Smith notices the bad effects of high profits on the
habits of the capitalist. They may perhaps sometimes occasion
extravagance; but generally, I should say, that extravagant habits
were a more frequent cause of a scarcity of capital and high
profits, than high profits of extravagant habits.
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