Edited by Charles Aldarondo Aldarondo @yahoo.com


AN
INQUIRY
INTO
THE NATURE AND PROGRESS
OF
RENT,
AND THE
PRINCIPLES BY WHICH IT IS REGULATED.

BY
THE REV. T. R. MALTHUS,
_Professor of History and Political Economy In the East India College,
Hertfordshire_

LONDON:
PRINTED FOR JOHN MURRAY, ALBEMARLE STREET.
1815.


Advertisement


The following tract contains the substance of some notes on
rent, which, with others on different subjects relating to
political economy, I have collected in the course of my
professional duties at the East India College. It has been my
intention, at some time or other, to put them in a form for
publication; and the very near connection of the subject of the
present inquiry, with the topics immediately under discussion,
has induced me to hasten its appearance at the present moment. It
is the duty of those who have any means of contributing to the
public stock of knowledge, not only to do so, but to do it at the
time when it is most likely to be useful. If the nature of the
disquisition should appear to the reader hardly to suit the form
of a pamphlet, my apology must be, that it was not originally
intended for so ephemeral a shape.


RENT, &c.


The rent of land is a portion of the national revenue, which
has always been considered as of very high importance.

According to Adam Smith, it is one of the three original
sources of wealth, on which the three great divisions of society
are supported.

By the Economists it is so pre-eminently distinguished, that
it is considered as exclusively entitled to the name of riches,
and the sole fund which is capable of supporting the taxes of the
state, and on which they ultimately fall.

And it has, perhaps, a particular claim to our attention at
the present moment, on account of the discussions which are going
on respecting the corn laws, and the effects of rent on the price
of raw produce, and the progress of agricultural improvement.

The rent of land may be defined to be that portion of the
value of the whole produce which remains to the owner of the
land, after all the outgoings belonging to its cultivation, of
whatever kind, have been paid, including the profits of the
capital employed, estimated according to the usual and ordinary
rate of the profits of agricultural stock at the time being.

It sometimes happens, that from accidental and temporary
circumstances, the farmer pays more, or less, than this; but this
is the point towards which the actual rents paid are constantly
gravitating, and which is therefore always referred to when the
term is used in a general sense.

The immediate cause of rent is obviously the excess of price
above the cost of production at which raw produce sells in the
market.

The first object therefore which presents itself for inquiry,
is the cause or causes of the high price of raw produce.

After very careful and repeated revisions of the subject, I
do not find myself able to agree entirely in the view taken of
it, either by Adam Smith, or the Economists; and still less, by
some more modern writers.

Almost all these writers appear to me to consider rent as too
nearly resembling in its nature, and the laws by which it is
governed, the excess of price above the cost of production, which
is the characteristic of a monopoly.

Adam Smith, though in some parts of the eleventh chapter of
his first book he contemplates rent quite in its true light,(1)
and has interspersed through his work more just observations on
the subject than any other writer, has not explained the most
essential cause of the high price of raw produce with sufficient
distinctness, though he often touches on it; and by applying
occasionally the term monopoly to the rent of land, without
stopping to mark its more radical peculiarities, he leaves the
reader without a definite impression of the real difference
between the cause of the high price of the necessaries of life,
and of monopolized commodities.

Some of the views which the Economists have taken of the
nature of rent appear to me, in like manner, to be quite just;
but they have mixed them with so much error, and have drawn such
preposterous and contradictory conclusions from them, that what
is true in their doctrines, has been obscured and lost in the
mass of superincumbent error, and has in consequence produced
little effect. Their great practical conclusion, namely, the
propriety of taxing exclusively the net rents of the landlords,
evidently depends upon their considering these rents as
completely disposable, like that excess of price above the cost
of production which distinguishes a common monopoly.

M. Say, in his valuable treatise on political economy, in
which he has explained with great clearness many points which
have not been sufficiently developed by Adam Smith, has not
treated the subject of rent in a manner entirely satisfactory. In
speaking of the different natural agents which, as well as the
land, co-operate with the labours of man, he observes,
'Heureusement personne n'a pu dire le vent et le soleil
m'appartiennent, et le service qu'ils rendent doit m'etre
paye.'(2) And, though he acknowledges that, for obvious reasons,
property in land is necessary, yet he evidently considers rent as
almost exclusively owing to such appropriation, and to external
demand.

In the excellent work of M. de Sismondi, De la richesse
commerciale, he says in a note on the subject of rent, 'Cette
partie de la rente fonciere est celle que les Economistes ont
decoree du nom du produit net comme etant le seul fruit du
travail qui aj outat quelquechose a la richesse nationale. On
pourrait au contraire soutenir contre eux, que c'est la seule
partie du produit du travail, dont la valeur soit purement
nominale, et n'ait rien de reelle: c'est en effet le resultat de
l'augmentation de prix qu'obtient un vendeur en vertu de son
privilege, sans que la chose vendue en vaille reellement
d'avantage.'(3) The prevailing opinions among the more modern
writers in our own country, have appeared to me to incline
towards a similar view of the subject; and, not to multiply
citations, I shall only add, that in a very respectable edition
of the Wealth of nations, lately published by Mr Buchanan, of
Edinburgh, the idea of monopoly is pushed still further. And
while former writers, though they considered rent as governed by
the laws of monopoly, were still of opinion that this monopoly in
the case of land was necessary and useful, Mr Buchanan sometimes
speaks of it even as prejudicial, and as depriving the consumer
of what it gives to the landlord.

In treating of productive and unproductive labour in the last
volume, he observes,(4) that, 'The net surplus by which the
Economists estimate the utility of agriculture, plainly arises
from the high price of its produce, which, however advantageous
to the landlord who receives it, is surely no advantage to the
consumer who pays it. Were the produce of agriculture to be sold
for a lower price, the same net surplus would not remain, after
defraying the expenses of cultivation; but agriculture would be
still equally productive to the general stock; and the only
difference would be, that as the landlord was formerly enriched
by the high price, at the expense of the community, the community
would now profit by the low price at the expense of the landlord.
The high price in which the rent or net surplus originates, while
it enriches the landlord who has the produce of agriculture to
sell, diminishes in the same proportion the wealth of those who
are its purchasers; and on this account it is quite inaccurate to
consider the landlord's rent as a clear addition to the national
wealth.' In other parts of his work he uses the same, or even
stronger language, and in a note on the subject of taxes, he
speaks of the high price of the produce of land as advantageous
to those who receive it, it but proportionably injurious to those
who pay it. 'In this view,' he adds, 'it can form no general
addition to the stock of the community, as the net surplus in
question is nothing more than a revenue transferred from one
class to another, and from the mere circumstance of its thus
changing hands, it is clear that no fund can arise out of which
to pay taxes. The revenue which pays for the produce of land
exists already in the hands of those who purchase that produce;
and, if the price of subsistence were lower, it would still
remain in their hands, where it would be just as available for
taxation, as when by a higher price it is transferred to the
landed proprietor.'(5)

That there are some circumstances connected with rent, which
have an affinity to a natural monopoly, will he readily allowed.
The extent of the earth itself is limited, and cannot be enlarged
by human demand. And the inequality of soils occasions, even at
an early period of society a comparative scarcity of the best
lands; and so far is undoubtedly one of the causes of rent
properly so called. On this account, perhaps, the term partial
monopoly might be fairly applicable. But the scarcity of land,
thus implied, is by no means alone sufficient to produce the
effects observed. And a more accurate investigation of the
subject will show us how essentially different the high price of
raw produce is, both in its nature and origin, and the laws by
which it is governed, from the high price of a common monopoly.

The causes of the high price of raw produce may be stated to
be three.

First, and mainly, that quality of the earth, by which it can
be made to yield a greater portion of the necessaries of life
than is required for the maintenance of the persons employed on
the land.

Secondly, that quality peculiar to the necessaries of life of
being able to create their own demand, or to raise up a number of
demanders in proportion to the quantity of necessaries produced.

And, thirdly, the comparative scarcity of the most fertile
land.

The qualities of the soil and of its products, here noticed
as the primary causes of the high price of raw produce, are the
gifts of nature to man. They are quite unconnected with monopoly,
and yet are so absolutely essential to the existence of rent,
that without them, no degree of scarcity or monopoly could have
occasioned that excess of the price of raw produce, above the
cost of production, which shows itself in this form.

If, for instance, the soil of the earth had been such, that,
however well directed might have been the industry of man, he
could not have produced from it more than was barely sufficient
to maintain those, whose labour and attention were necessary to
its products; though, in this case, food and raw materials would
have been evidently scarcer than at present, and the land might
have been, in the same manner, monopolized by particular owners;
vet it is quite clear, that neither rent, nor any essential
surplus produce of the land in the form of high profits, could
have existed.

It is equally clear, that if the necessaries of life the most
important products of land - had not the property of creating an
increase of demand proportioned to their increased quantity, such
increased quantity would occasion a fall in their exchangeable
value. However abundant might be the produce of a country, its
population might remain stationary And this abundance, without a
proportionate demand, and with a very high corn price of labour,
which would naturally take place under these circumstances, might
reduce the price of raw produce, like the price of manufactures,
to the cost of production.

It has been sometimes argued, that it is mistaking the
principle of population, to imagine, that the increase of food,
or of raw produce alone, can occasion a proportionate increase of
population. This is no doubt true; but it must be allowed, as has
been justly observed by Adam Smith, that 'when food is provided,
it is comparatively easy to find the necessary clothing and
lodging. And it should always be recollected, that land does not
produce one commodity alone, but in addition to that most
indispensable of all commodities - food - it produces also the
materials for the other necessaries of life; and the labour
required to work up these materials is of course never excluded
from the consideration.(6)

It is, therefore, strictly true, that land produces the
necessaries of life, produces food, materials, and labour,
produces the means by which, and by which alone, an increase of
people may be brought into being, and supported. In this respect
it is fundamentally different from every other kind of machine
known to man; and it is natural to suppose, that it should be
attended with some peculiar effects.

If the cotton machinery, in this country, were to go on
increasing at its present rate, or even much faster; but instead
of producing one particular sort of substance which may be used
for some parts of dress and furniture, etc. had the qualities of
land, and could yield what, with the assistance of a little
labour, economy, and skill, could furnish food, clothing, and
lodging, in such proportions as to create an increase of
population equal to the increased supply of these necessaries;
the demand for the products of such improved machinery would
continue in excess above the cost of production, and this excess
would no longer exclusively belong to the machinery of the
land.(7)

There is a radical difference in the cause of a demand for
those objects which are strictly necessary to the support of
human life, and a demand for all other commodities. In all other
commodities the demand is exterior to, and independent of, the
production itself; and in the case of a monopoly, whether natural
or artificial, the excess of price is in proportion to the
smallness of the supply compared with the demand, while this
demand is comparatively unlimited. In the case of strict
necessaries, the existence and increase of the demand, or of the
number of demanders, must depend upon the existence and increase
of these necessaries themselves; and the excess of their price
above the cost of their production must depend upon, and is
permanently limited by, the excess of their quantity above the
quantity necessary to maintain the labour required to produce
them; without which excess of quantity no demand could have
existed, according to the laws of nature, for more than was
necessary to support the producers.

It has been stated, in the new edition of the Wealth of
nations, that the cause of the high price of raw produce is, that
such price is required to proportion the consumption to the
supply.(8) This is also true, but it affords no solution of the
point in question. We still want to know why the consumption and
supply are such as to make the price so greatly exceed the cost
of production, and the main cause is evidently the fertility of
the earth in producing the necessaries of life. Diminish this
plenty, diminish the fertility of the soil, and the excess will
diminish; diminish it still further, and it will disappear. The
cause of the high price of the necessaries of life above the cost
of production, is to be found in their abundance, rather than
their scarcity; and is not only essentially different from the
high price occasioned by artificial monopolies, but from the high
price of those peculiar products of the earth, not connected with
food, which may be called natural and necessary monopolies.

The produce of certain vineyards in France, which, from the
peculiarity of their soil and situation, exclusively yield wine
of a certain flavour, is sold of course at a price very far
exceeding the cost of production. And this is owing to the
greatness of the competition for such wine, compared with the
scantiness of its supply; which confines the use of it to so
small a number of persons, that they are able, and rather than go
without it, willing, to give an excessively high price. But if
the fertility of these lands were increased, so as very
considerably to increase the produce, this produce might so fall
in value as to diminish most essentially the excess of its price
above the cost of production. While, on the other hand, if the
vineyards were to become less productive, this excess might
increase to almost any extent.

The obvious cause of these effects is, that in all
monopolies, properly so called, whether natural or artificial,
the demand is exterior to, and independent of, the production
itself. The number of persons who might have a taste for scarce
wines, and would be desirous of entering into a competition for
the purchase of them, might increase almost indefinitely, while
the produce itself was decreasing; and its price, therefore,
would have no other limit than the numbers, powers, and caprices,
of the competitors for it.

In the production of the necessaries of life, on the
contrary, the demand is dependent upon the produce itself; and
the effects are, in consequence, widely different. In this case,
it is physically impossible that the number of demanders should
increase, while the quantity of produce diminishes, as the
demanders only exist by means of this produce. The fertility of
soil, and consequent abundance of produce from a certain quantity
of land, which, in the former case, diminished the excess of
price above the cost of production, is, in the present case, the
specific cause of such excess; and the diminished fertility,
which in the former case might increase the price to almost any
excess above the cost of production, may be safely asserted to be
the sole cause which could permanently maintain the necessaries
of life at a price not exceeding the cost of production.

Is it, then, possible to consider the price of the
necessaries of life as regulated upon the principle of a common
monopoly? Is it possible, with M. de Sismondi, to regard rent as
the sole produce of labour, which has a value purely nominal, and
the mere result of that augmentation of price which a seller
obtains in consequence of a peculiar privilege; or, with Mr
Buchanan, to consider it as no addition to the national wealth,
but merely as a transfer of value, advantageous only to the
landlords, and proportionately injurious to the consumers?

Is it not, on the contrary, a clear indication of a most
inestimable quality in the soil, which God has bestowed on man -
the quality of being able to maintain more persons than are
necessary to work it? Is it not a part, and we shall see further
on that it is an absolutely necessary part, of that surplus
produce from the land,(9) which has been justly stated to be the
source of all power and enjoyment; and without which, in fact,
there would be no cities, no military or naval force, no arts, no
learning, none of the finer manufactures, none of the
conveniences and luxuries of foreign countries, and none of that
cultivated and polished society, which not only elevates and
dignifies individuals, but which extends its beneficial influence
through the whole mass of the people?

In the early periods of society, or more remarkably perhaps,
when the knowledge and capital of an old society are employed
upon fresh and fertile land, this surplus produce, this bountiful
gift of providence, shows itself chiefly in extraordinary high
profits, and extraordinary high wages, and appears but little in
the shape of rent. While fertile land is in abundance, and may be
had by whoever asks for it, nobody of course will pay a rent to a
landlord. But it is not consistent with the laws of nature, and
the limits and quality of the earth, that this state of things
should continue. Diversities of soil and situation must
necessarily exist in all countries. All land cannot be the most
fertile: all situations cannot be the nearest to navigable rivers
and markets. But the accumulation of capital beyond the means of
employing it on land of the greatest natural fertility, and the
greatest advantage of situation, must necessarily lower profits;
while the tendency of population to increase beyond the means of
subsistence must, after a certain time, lower the wages of
labour.

The expense of production will thus be diminished, but the
value of the produce, that is, the quantity of labour, and of the
other products of labour besides corn, which it can command,
instead of diminishing, will be increased. There will be an
increasing number of people demanding subsistence, and ready to
offer their services in any way in which they can be useful. The
exchangeable value of food will, therefore, be in excess above
the cost of production, including in this cost the full profits
of the stock employed upon the land, according to the actual rate
of profits, at the time being. And this excess is rent.

Nor is it possible that these rents should permanently remain
as parts of the profits of stock, or of the wages of labour. If
such an accumulation were to take place, as decidedly to lower
the general profits of stock, and, consequently, the expenses of
cultivation, so as to make it answer to cultivate poorer land;
the cultivators of the richer land, if they paid no rent, would
cease to be mere farmers, or persons living upon the profits of
agricultural stock. They would unite the characters of farmers
and landlords - a union by no means uncommon; but which does not
alter, in any degree, the nature of rent, or its essential
separation from profits. If the general profits of stock were 20
per cent and particular portions of land would yield 30 per cent
on the capital employed, 10 per cent of the 30 would obviously be
rent, by whomsoever received.

It happens, indeed, sometimes, that from bad government,
extravagant habits, and a faulty constitution of society, the
accumulation of capital is stopped, while fertile land is in
considerable plenty, in which case profits may continue
permanently very high; but even in this case wages must
necessarily fall, which by reducing the expenses of cultivation
must occasion rents. There is nothing so absolutely unavoidable
in the progress of society as the fall of wages, that is such a
fall as, combined with the habits of the labouring classes, will
regulate the progress of population according to the means of
subsistence. And when, from the want of an increase of capital,
the increase of produce is checked, and the means of subsistence
come to a stand, the wages of labour must necessarily fall so
low, as only just to maintain the existing population, and to
prevent any increase.

We observe in consequence, that in all those countries, such
as Poland, where, from the want of accumulation, the profits of
stock remain very high, and the progress of cultivation either
proceeds very slowly, or is entirely stopped, the wages of labour
are extremely low. And this cheapness of labour, by diminishing
the expenses of cultivation, as far as labour is concerned,
counteracts the effects of the high profits of stock, and
generally leaves a larger rent to the landlord than in those
countries, such as America, where, by a rapid accumulation of
stock, which can still find advantageous employment, and a great
demand for labour, which is accompanied by an adequate increase
of produce and population, profits cannot be low, and labour for
some considerable time remains very high.

It may be laid down, therefore, as an incontrovertible truth,
that as a nation reaches any considerable degree of wealth, and
any considerable fullness of population, which of course cannot
take place without a great fall both in the profits of stock and
the wages of labour, the separation of rents, as a kind of
fixture upon lands of a certain quality, is a law as invariable
as the action of the principle of gravity. And that rents are
neither a mere nominal value, nor a value unnecessarily and
injuriously transferred from one set of people to another; but a
most real and essential part of the whole value of the national
property, and placed by the laws of nature where they are, on the
land, by whomsoever possessed, whether the landlord, the crown,
or the actual cultivator.

Rent then has been traced to the same common nature with that
general surplus from the land, which is the result of certain
qualities of the soil and its products; and it has been found to
commence its separation from profits, as soon as profits and
wages fall, owing to the comparative scarcity of fertile land in
the natural progress of a country towards wealth and population.

Having examined the nature and origin of rent, it remains for
us to consider the laws by which it is governed, and by which its
increase or decrease is regulated.

When capital has accumulated, and labour fallen on the most
eligible lands of a country, other lands less favourably
circumstanced with respect to fertility or situation, may be
occupied with advantage. The expenses of cultivation, including
profits, having fallen, poorer land, or land more distant from
markets, though yielding at first no rent, may fully repay these
expenses, and fully answer to the cultivator. And again, when
either the profits of stock or the wages of labour, or both, have
still further fallen, land still poorer, or still less favourably
situated, may be taken into cultivation. And, at every step, it
is clear, that if the price of produce does not fall, the rents
of land will rise. And the price of produce will not fall, as
long as the industry and ingenuity of the labouring classes,
assisted by the capitals of those not employed upon the land, can
find something to give in exchange to the cultivators and
landlords, which will stimulate them to continue undiminished
their agricultural exertions, and maintain their increasing
excess of produce.

In tracing more particularly the laws which govern the rise
and fall of rents, the main causes which diminish the expenses of
cultivation, or reduce the cost of the instruments of production,
compared with the price of produce, require to be more
specifically enumerated. The principal of these seem to be four:
first, such an accumulation of capital as will lower the profits
of stock; secondly, such an increase of population as will lower
the wages of labour; thirdly, such agricultural improvements, or
such increase of exertions, as will diminish the number of
labourers necessary to produce a given effect; and fourthly, such
an increase in the price of agricultural produce, from increased
demand, as without nominally lowering the expense of production,
will increase the difference between this expense and the price
of produce.

The operation of the three first causes in lowering the
expenses of cultivation, compared with the price of produce, are
quite obvious; the fourth requires a few further observations.

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 ahead, 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.

Nor would the effect be essentially different in a country
which continued to feed its own people, if instead of a demand
for its raw produce, there was the same increasing demand for its
manufactures. These manufactures, if from such a demand the value
of their amount in foreign countries was greatly to increase,
would bring back a great increase of value in return, which
increase of value could not fail to increase the value of the raw
produce. The demand for agricultural as well as manufactured
produce would 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.

A similar effect would be produced by the introduction of new
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, 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 raw products;(10)
whereas, in comparatively poor countries, without much internal
trade and foreign commerce, the value of their raw produce
constitutes almost the whole of their wealth. If we suppose the
wages of labour so to rise with the rise of produce, as to give
the labourer the same command of the means of subsistence as
before, yet if he is able to purchase a greater quantity of other
necessaries and conveniencies, both foreign and domestic, with
the price of a given quantity of corn, he may be equally well
fed, clothed, and lodged, and population may be equally
encouraged, although the wages of labour may not rise so high in
proportion as the price of produce.

And even when the price of labour does really rise in
proportion to the price of produce, which is a very rare case,
and can only happen when the demand for labour precedes, or is at
least quite contemporary with the demand for produce; it is so
impossible that all the other outgoings in which capital is
expended, should rise precisely in the same proportion, and at
the same time, such as compositions for tithes, parish rates,
taxes, manure, and the fixed capital accumulated under the former
low prices, that a period of some continuance can scarcely fail
to occur, when the difference between the price of produce and
the cost of production is increased.

In some of these cases, the increase in the price of
agricultural produce, compared with the cost of the instruments
of production, appears from what has been said to be only
temporary; and in these instances it will often give a
considerable stimulus to cultivation, by an increase of
agricultural profits, without showing itself much in the shape of
rent. It hardly ever fails, however, to increase rent ultimately.
The increased capital, which is employed in consequence of the
opportunity of making great temporary profits, can seldom if ever
be entirely removed from the land, at the expiration of the
current leases; and, on the renewal of these leases, the landlord
feels the benefit of it in the increase of his rents.

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 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 last twenty years, 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 different branches of capital, that
afforded the means of so rapid and so advantageous an
accumulation.

In this case cultivation has been extended, and rents have
risen, although one of the instruments of production, capital,
has been dearer.

In the same manner a fall of profits and improvements in
agriculture, or even one of them separately, might raise rents,
notwithstanding a rise of wages.

It may be laid down then as a general truth, that rents
naturally rise as the difference between the price of produce and
the cost of the instruments of production increases.

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 great quantity of
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 the existing rate of 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 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, occasioned by the operation of the same causes, 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
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
the country increased, but 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 be by no means in proportion to the
extension of cultivation, or the increase of produce. Every
relative fall in the price of the instruments of production, 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 may be considerable,
though the increase of rents be trifling. We 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 a constantly
increasing proportion to the amount of rents, unless
counterbalanced by extraordinary improvements in the modes of
cultivation.(11)

According to the returns lately made to the Board of
Agriculture, the average proportion which rent bears to the value
of the whole produce, seems not to exceed one fifth;(12) whereas
formerly, when there was less capital employed, and less value
produced, 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 has a
less share of the whole produce, yet this less share, from the
very great increase of the produce, yields a larger quantity, and
gives him a greater command of corn and labour. 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, his real rent, independently
of nominal price, will be increased in the proportion of from
three to four. And in general, in all cases of increasing
produce, if the landlord's share of this produce do not diminish
in the same proportion, which though it often happens during the
currency of leases, rarely or never happens on the renewal of
them, the real rents of land must rise.

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 the high
price of raw produce, occasioned by the extension of our
manufactures and commerce.

On the other hand, it will appear, that a fall of rents is as
necessarily connected with the throwing of inferior land out of
cultivation, and the continued deterioration of the land of a
superior quality; and that it is the natural and necessary
consequence of causes, which are the certain indications of
poverty and decline, namely, diminished capital, diminished
population, a bad system of cultivation, and the low price of raw
produce.

If it be true, that cultivation cannot be extended but under
such a state of prices, compared with the expenses of production,
as will allow of an increase of rents, it follows naturally that
under such a state of relative prices as will occasion a fall of
rents, cultivation must decline. If the instruments of production
become dearer, compared with the price of produce, it is a
certain sign that they are relatively scarce; and in all those
cases where a large quantity of them is required, as in the
cultivation of poor land, the means of procuring them will be
deficient, and the land will be thrown out of employment.

It appeared, that in the progress of cultivation and of
increasing rents, it was not necessary that all the instruments
of production should fall in price at the same time; and that the
difference between the price of produce and the expense of
cultivation might increase, although either the profits of stock
or the wages of labour might be higher, instead of lower.

In the same manner, when the produce of a country is
declining, and rents are falling, it is not necessary that all

1 2 3