Cyclopædia of Political Science, Political Economy, and the Political History of the United States

Edited by: Lalor, John J.
(?-1899)
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First Pub. Date
1881
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New York: Maynard, Merrill, and Co.
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1899
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Includes articles by Frédéric Bastiat, Gustave de Molinari, Henry George, J. B. Say, Francis A. Walker, and more.
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RENT

III.133.1

RENT. This is the term recognized in political economy, to denote the net product of the land, i.e., that portion of the total product, which, after deducting what covers the expense of production, remains, and constitutes a surplus. This surplus naturally reverts to the owners of the soil; they gather it themselves when they work their own lands; they receive it from the hands of farmers, or metayers when they leave to others the care of making them productive; in all cases. the rent forms part of the property. We must not, however, confound it with the price paid by one who hires a farm, (called sometimes farm rent), although it is one of the elements of the latter. Every case of farm rent, every leasing price, whether payable in money or in kind, includes something additional, viz., the remuneration due the land owners for expenditures made by them at various times in the past, to facilitate labor or increase its results. The buildings for farm service or for residence, the fences, ditches and plantations which the farm embraces, have often cost considerable sums, and it is just that those who enjoy the advantages connected with their existence, should pay all or a part of the interest on the capital that had to be devoted to them. On the other hand, the conditions of the lease of lands have been discussed by the contracting parties, and may have been so determined as to favor either. Nevertheless, wherever the price for the use of the farm is payable in money, there is a constant tendency for it to include the entire rent. Rent is a net product, it is only realized when active industry has been fully remunerated, and it is not less difficult for farmers to reserve any of it for themselves, than for proprietors to induce farmers to sacrifice to them a part of the profits due to their improvements. But, whatever may be the nature of the circumstances which determine the apportionment of the rent of land between the owner and farmer, they can neither permanently effect its real amount nor alter its original character.

III.133.2

—Among the great facts to which the attention of economists has been drawn, few have given rise to so many controversies as the rent of lands. What it is, its origin, its proportions, its effects, its legitimacy even, everything connected with its existence, has been the object of long and patient investigations, and still harmony has not yet been established between the differing opinions. This is the more to be regretted, because, in this very question of rent are involved many other problems of deep social import, and the effects of its solution naturally extend far beyond the limits which scientific investigation has attained.

III.133.3

—We will here commence by pointing out the order in which the opinions on the matter of rent originated; we will note their characteristic differences; then we will take up the question in its whole extent, and, in our course, we shall find occasion to show how far each of the theories before us seems to depart from or to approach the truth, so far as the best established facts permit us to discern it.

III.133.4

—It was the physiocratic school who first enunciated an opinion on the nature of rent. They characterized it as the net product of the land, and in this they were not in error; but soon, attributing to it an extreme and exclusive importance, they made it the only source of public and private wealth. We know how erroneous a doctrine must be, which is based on the idea that no other labor than that on land can obtain more than the equivalent of the values it consumes, a doctrine denying productive power to employments without which most things produced from the land would themselves remain unsuited to use, and not admitting that men could realize any other riches than that which the natural fertility of the soil put at their disposal. However, in spite of this fundamental error which vitiated all their conclusions, we can not deny the physiocrates the merit of having apprehended well the character of rent and having given a pretty accurate definition of it. Among their observations on the natural increase of rent, there are also some which are both just and important. The net product, rent, in the excess which is left from the crops after the expenses of cultivation are reimbursed; it is the portion of the fruits of the earth from which the non-agricultural classes subsist; and, doubtless, in the normal and regular order of things, the greater or less amount of this excess has a strong influence on the degree of power and prosperity in reserve for nations.

III.133.5

—With and by the illustrious Adam Smith, began what may rightfully be called true economic science. The opinion of Smith on the subject of rent is much like that of the physiocrates. It is substantially as follows. In labor on land, nature acts conjointly with man, and rent is the product of its co-operative power. It is this co-operative power of the earth, the enjoyment of which landholders grant in consideration of a price for the lease based upon a proportional share of the sum at which it figures in the results of production.

III.133.6

—The opinion of Adam Smith has obtained the assent of most economists. J B. Say, Storch, Rossi and Rau adopted it, or varied little from it. Dr. Anderson, however, had previously presented a harmonious series of ideas on the subject, which were at the same time more complex and better developed. *68 But his system did not attract attention until after having been reproduced again in the writings of Malthus and Ricardo, and it is under the name of the latter that he has taken a place in economic science.

III.133.7

—The starting point of Ricardo is in reality the same as that of Adam Smith. What the latter calls the co-operative power of land, Ricardo calls natural fertility, or original powers; but what he has added to the fundamental notion is, an exposition of the rules which, in his opinion. govern the formation and progressive increase of rent. According to Ricardo, rent is not solely the result of a natural fertility which permits the land to return, to those who cultivate it, harvests superior to their needs; it arises from the unequal distribution of this fertility. So long as the population, having plenty of room, can work only the best lands at their disposal, there is no rent: but just as soon as, on account of their increase in numbers, the same population are compelled, in order to procure means of subsistence, to attack lands of inferior quality, rent arises and becomes the share of the proprietors of the portions of the soil that were first cultivated. And the following is his explanation. Being less fertile than the others, the lands on which the labor is expended can not return, for a like expenditure in cultivation, as great a product. The crops they yield require additional expense and labor. and as it has become impossible for society to do without its complement of supplies, it is compelled to pay for provisions whatever price is necessary to insure production on land that has just been cleared. In this inevitable movement. it is the net cost of the produce on the worst land to which recourse must be had, which fixes the general price, and consequently determines the profits of the proprietors of the land first cultivated, the realization of which secures them a rent. They sell at a higher price what they obtain without increased cost or advances, and find themselves masters of a greater surplus than they had before prices had risen. A like effect is again produced whenever the necessity of increasing the arable domain is felt. Worse lands are continually being brought under cultivation; the price of produce rises because of the increased outlay they require; and, at each advance in prices which takes place, rent is seen to arise where it did not previously exist, and to increase where it had already arisen. Such are the ideas on which the theory is based which is called by Ricardo's name. This theory affirms, or at least appears to affirm, that rent has no other source than the difference in the degree of fertility between different portions of the soil: it attributes its origin and development to no other principle than the continual rise in the market price of food, and it makes the difference between a general price current, regulated by the expenses connected with production in localities where these expenses are greatest, and the particular net cost in the other portions of the soil, the measure of the rent that each of the latter affords or is adapted to afford.

III.133.8

—Ricardo's theory was of course widely taken into consideration by the economic world. It gave, or seemed to give, the explanation of a certain number of facts. which, at the time when it originated, were receiving much attention from the public. Moreover, many writers accepted it fully; and it was not until our day that it found decided opponents. Attacked first in England by Prof. Jones, of Hailebury, it was afterward assailed by adversaries whose denials extended even to the principle to which Smith had given his adhesion.

III.133.9

—A very distinguished American economist, Mr. Carey, has denied that the natural fertility of the soil is among the causes productive of rent. In his view, rent has no other source than the expenses successively incurred in the interest of production. And among these expenses he includes, besides those of which the lands under cultivation have been the direct object, the construction of roads, canals, and any means of communication designed to facilitate transportation and to render the markets accessible to products which, if they could not have reached them, would not have been demanded of the soil. Mr. Carey, moreover, has endeavored to demonstrate that Ricardo was entirely wrong in regard to the order in which cultivation has taken place, and that it has not begun with the most fertile lands, but with those most easily cleared, or the nearest to centres of consumption. Taking Mr. Carey's opinions in their plain signification, they consist in denying to the land itself any participation in the formation of rent, in attempting to prove that all this rent represents only the remuneration for advances made to render the soil amenable to culture; in a word, that rent is and can be only a simple creation of human industry.

III.133.10

—Such is also the point of view from which rent was regarded by a man whose premature loss science can not too deeply deplore. M. Bastiat, dreading the consequences of any doctrine which seemed to authorize the admission that wealth could exist which was not exclusively the product of services or of human efforts, started with the same idea as Mr. Carey. According to him, rent is and can be only the interest on the capital invested in clearing the soil and preparing it for production. Only M. Bastiat recognizes that rent may occur without the proprietor having to make any sacrifice to reap the benefit of an unexpected increase: and this case he explains by remarking that there is nothing peculiar in landed property; that what creates the value of the services rendered by every employment of human industry, whatever agent it may use, is not alone the efforts made by the producer, but also the efforts spared to the consumer; and that the latter, whenever his wants increase, pays more for the service rendered him in saving him the more costly efforts he would have to make to provide for himself without such aid. It is much to be regretted that M. Bastiat did not have time to make a precise and well-arranged statement of his ideas before his death. It was in connection with the treatment of real estate that he announced them, in the clever book he published under the title of "Economic Harmonies." The special chapter that he proposed to devote to rent was scarcely outlined. and what has been preserved of it consists only of incomplete fragments, in which the author's ideas are not clearly discernible.

III.133.11

—Such are the principal opinions to which the existence of rent has given rise. Their antagonism is very marked. While some attribute the formation of rent to the co-operative action of nature in agricultural labor, others, denying all influence to this action. consider rent only as the remuneration for the expenses and efforts by which mankind have succeeded in transforming the earth into an instrument of production. We will review the whole subject, and attempt to ascertain the truth amid the obscurities and complications which have hitherto hindered its successful investigation.

III.133.12

Origin of Rent. There are, in the first place, two things which it seems to us impossible to contest. One is, that the earth is endowed with fertility; the other, that it is not equally so in all parts. It is a fact no less evident, that this fertility does not even need the co-operation of man in order to manifest itself. In the most uncultivated condition the land never fails to be covered with vegetable growths, some of which can supply food and support animals whose flesh may be eaten; and it is the land which, by insuring to the human race at the beginning harvests already produced, has permitted it to escape the destructive effects of famine. Of course, men had to be at the trouble of gathering the fruit, pulling up the roots, and catching the game and the fish on which they subsisted; but if such efforts had alone the power of conferring value on the products which the earth of itself put within their reach, it is none the less true that where these products were more abundant or more easily obtainable, less effort was needed to appropriate them, to adapt them to use; in a word, to convert them into exchangeable wealth. Well, it is to this natural fertility of the earth, which has from the beginning put its inhabitants in the way of obtaining means of subsistence which were not wholly the fruit of their labor even, that rent owes its origin. Rent is the surplus realized over the expense of production, and wherever it was possible to those who, in any way whatever, labored to gather the fruits of the earth, to amass more of them than their personal necessities required, there was a surplus to their advantage, which was rent, and rent very evidently due to the fertility of the portion of the soil on which their industry had been employed.

III.133.13

—The most savage tribes have nothing to learn in this regard. They contest with each other the occupation of places where the waters most abound in fish, or where the land furnishes the most game or fruit; and this is because they well know that as long as they keep exclusive possession of it, they will derive from a given amount of effort, time and fatigue, a quantity of the means of subsistence superior to what they would obtain on less favored portions of the soil; in a word, an actual excess over the expenses of production, which would be everywhere else less amply repaid.

III.133.14

—We will say more. From the first, the earth must, in certain places, have conferred a rent on those who as yet knew only how to gather its spontaneous productions, as otherwise civilization could not have arisen and commenced to advance. While most of the savage tribes were exhausting themselves in efforts to find enough to prevent them from dying of starvation, others, more favored, obtained, without any more skill or effort, resources more than sufficient to supply their necessities; and the latter were not long in bettering their condition. Free to provide in advance for future consumption, it became possible for them to devote leisure to occupations other than the mere search for food. They could make weapons, the implements needed in fishing and hunting, and the means of deriving more profit from their labor; and in the end, they could amass the provisions or capital whose possession would enable them to undertake the breaking up and cultivating the land. We may safely assert, that, if Providence had not so disposed things that the earth offered in some places, to its earliest inhabitants, products which it did not take all their time and care to obtain, the savage manner of life would never have come to an end: men would to-day be still wandering naked and hungry, a prey to invincible poverty, distinguished in no respect from the animals called into existence at the same time with themselves.

III.133.15

—The invention of the art of agriculture did not alter the nature of the primordial fact. There had been, during previous periods, lands which had yielded to those who sought their products, more than they needed for subsistence: there were, under the new order of things, lands which yielded to those who cultivated them, more than was necessary to compensate them for their trouble and expense. Wherever, after deducting the amount of the advances they required, lands left a surplus, this surplus constituted a rent. Wherever, for example, two workmen succeeded in realizing, beyond the returns due to capital immobilized with a view to production, products in a quantity sufficient to provide for the consumption of three, the rent was equivalent to the part of the resources necessary for the subsistence of a man and to pay for his services; and this rent was the result of the fertility of the soil; for, at points less favored, the same amount of work would not have obtained a like surplus; and at certain points it would not, had it been employed, have even obtained enough to indemnify those who had made the expenditure.

III.133.16

—The reader will see, that, like Adam Smith, we attribute the origin of rent to the existence in the soil itself of forces or properties naturally productive. Thanks to the assistance these forces give men whenever they require it, their efforts obtain, besides the remuneration which is their due, an excess which may be so disposed of as to favor other kinds of consumption than that of agricultural laborers. Never has this aid been lacking to those who have sought it. It was this which, even before agriculture was commonly resorted to, supplied unfortunate savage tribes, in possession of good fishing and hunting districts, with means of subsistence sufficiently abundant for them not to be compelled to sacrifice all the time at their disposal in search for food: this it was, too, which, in ages more advanced, by permitting proprietors of cultivated land to harvest more products than they expended in production, gave them the power to remunerate labors other than those expended on the soil, and to call into existence manufacturing and commercial classes and give them a position of continually increasing importance in the ranks of the population.

III.133.17

—Before examining the systems which are not in harmony with this opinion, or which differ from it, there is one assertion in reference to which we must enter into some explanation; for if it were well founded, rent could be regarded as having no other original cause than the power of the earth co-operating with the labor devoted to obtaining its products. This assertion is, that there is no rent in countries where land is so abundant that every one is free to appropriate to himself such a portion as he likes without compensation, or for a trifle. Rossi and some other economists have freely admitted the fact, and M. Bastiat has found in it a point of support for his system. Let us see where the truth lies. It is certain, that, where land is abundant, its products have little sale value, because they have few consumers and lack a market; but does it follow, that, on the few portions where cultivation exists, those who employ it do not find in the original properties of the soil an aid eminently profitable, and do not obtain crops out of proportion to their efforts for subsistence? Suppose a country where all the people cultivated land, and where they could not sell provisions to neighbors because the latter were as well provided for as themselves: the beneficent effects resulting from the co-operative action of the soil would still be felt. In such a country, no one would try to realize a surplus which could find no purchasers: every one would only demand of the soil the means of subsistence required for his own family: but, as little labor would be necessary to obtain this, the husbandman would enjoy long periods of leisure; and leisure is always, to those who know how to employ it, a source of wealth. The time not required in cultivating land, they would employ in making articles adapted to satisfy other demands than those of hunger. They would make clothing, furniture and dwellings; and these are products whose acquisition would be due to the co-operation of the land with their efforts. A relief from incessant labor, and leisure that can be employed in reproductive occupations, are what the earth gives those who cultivate it, whenever they do not know what to do with the surplus it yields. This is, in reality, rent, under a form sufficiently characterized.

III.133.18

—But, let us observe, things have never occurred altogether in this manner. Wherever cultivation of the soil has become established, it has never alone attracted all persons, and it has always found consumers who did not share in its labors. So far back as we can trace in history, we find no social aggregation without magistrates, priests, soldiers and artisans, all supported from the portion of the crops which the agricultural population could spare; and this portion was no other than the excess produced by the land. It has often been affirmed that rent long was, and still is, unknown in some parts of North America. "But lately," says M. Rossi, in speaking of the ideas of the physiocrates on the net product of the land, "there was no rent or scarcely any rent in America, and yet there was a great abundance of all the necessaries of life, and the course of society was toward great prosperity and rapid development." It is true that the conditions under which the colonization of North America has been effected, differ in all respects from those which governed the formation of social bodies in the old world; but the opinion of M. Rossi is, nevertheless, incorrect. One thing which does not exist in America, or exists there only in a very few localities, is the practice of hiring farms, and the reason for it is simply this: As land there costs very little, those who wish to till it, buy the ground on which they settle; and the acquisition counts but little in the list of expenses incurred in their industry; but there is in America a town population, who buy, either for consumption or export, the surplus which the local circumstances bring into market, and the agriculturists retain, by their right as proprietors, an actual rent. It is also true that nowhere in America does the surplus bear a definite relation to the expense of production; nowhere in that country does the agricultural class, after having recovered its advances, offer the other classes as much of the means of subsistence and remunerate as well their services; and it is just this which causes such an abundance and so many elements of life and prosperity in the Union. Some writers have thought that the surplus which American cultivators have to dispose of should not be considered as the result of the natural fertility of the soil, but simply a return for the capital invested in their operations. One need but examine the matter closely to see that it is quite otherwise. It is not because the general rate of profit is very high in America, that the land there brings in a good return to those who take advantage of its fertility: it is, on the contrary, because the land cultivated, which is still wholly choice land, returns much, that the rate of profits is high. Capital goes where it brings most. In America, as everywhere else, it is not invested in manufactures or commerce, except when it will yield as much as if employed in agriculture; and it is the amount of the net income from the soil which largely repays cultivation, that secures to all investments of savings, and to every employment of human activity, the ample remuneration they receive. Assuredly, if the vast territory of America were only composed of lands of a low degree of fertility, the expense necessarily incurred to obtain subsistence from them, would be more considerable, agricultural capital would produce less, and neither the general rate of profits nor that of wages would be maintained at the height they have now attained and are continuing to keep.

III.133.19

—Europe does not lack countries where land is abundant, and has only a low sale value. It is incontestable that rent exists in these places; and as the facts which give it a distinguishing characteristic are of a nature to throw much light on the question, we will say a few words in regard to them. In Hungary, Russia, and many parts of the original Poland and the principalities of the Danube, the rural population, held in servitude, or but recently having ceased to be so held, are, in general, too poor and too ignorant to purchase the land and subject themselves to the risks and perils consequent upon settlement. What is the result? It is that the proprietors, like American agriculturists, cultivate and harvest on their own account. Ordinarily, they leave the laborers, as their wages, the use of a piece of land, which the latter cultivate for the support of their families, and for which they are bound to give two or three days' labor per week to the rest of the estate. This arrangement clearly shows wherein consists the rent of the proprietor. It is the result of the employment, on his land, of the time which the laborers can spare from that which gives them their own subsistence. And let it be observed, that this time can be attributed by the laborers to nothing else than the natural fertility of the soil whose cultivation furnishes them their whole living. Whenever the laborers devote to other fields than those which they are permitted to enjoy, two days' work per week, the surplus over the general expenses of production, the rent is but little inferior to two-thirds of the total product.

III.133.20

—Now, there are, in these same countries, some places where reside either colonists of foreign origin, or peasants in full possession of the lands they cultivate, who often have more land than they can till. This is the case in America. Does any one think that rent does not exist in such places, as well as in the rest of the country? If so, he is greatly mistaken. The part which reverts to the proprietors, in cases where the laborers give their fields two days' labor every week, the cultivators retain for themselves when they are absolute masters of the soil, and if they do not harvest it, it is because they find they can more profitably employ the time which they refrain from devoting to agriculture.

III.133.21

—In whatever way we look at the question, on whatever side we take hold of it, we must always end by recognizing that the earth gives rise to rent, and that, even where the conditions of society are such as to prevent all being derived from land which it might produce, there is a compensation for this in the leisure it affords that can be employed in other avocations.

III.133.22

—Let us come to the theory adopted by both Carey and Bastiat. They deny that the earth can add anything of its own to the results of labor. In their view, land is only an instrument, an agent, of production, which man employs, and not a single element can be found in rent which is not wholly the product of the expense incurred to render the land fertile. M. Bastiat thought, that to admit the co-operative action of the soil in the benefits connected with production, would be to recognize that wealth might exist which was not due to labor, and that the earth had the power to create such wealth. Let us look at this point. No one, surely, of any repute among economists, has maintained that anything which nature has prepared for the use of human beings, has value before having been the object of some kind of labor;*69 but, positing this principle, is it the less true that the earth, if it does not furnish things which already have value, does afford those adapted to receive it, and that, whenever it furnishes these things in such abundance or so easily obtainable that the labor employed in communicating value*70 to them costs less than it produces, there results an excess over the expense incurred, which is not found when the efforts of man are otherwise exerted? Here is the fundamental point of the discussion, the point of fact. To affirm that this surplus would not be realized without taking the trouble to obtain it, is to say little; for that is not contested. What should be proved is, that it would be possible without the co-operation of the earth, and that there are industries not agricultural or extractive which have also the power to produce rent.*71 Now, this proof is wanting, and surely never will be given. As to the objection that it is demand, which, by assuring a value to the agricultural surplus, has alone the power to create it and to convert it into wealth, and that demand constitutes an action purely human, it has its response*72 in what has just been said in reference to the assertion, that there is no rent in regions where the land, while waiting for a more complete private appropriation. has as yet little or no exchange value.

III.133.23

—It is in vain for one to seek to delude himself. The land alone returns more than is needed to pay wages, interest and profit on the capital required to cultivate it; and as there is no other way in which labor can be applied to obtain a like surplus, we must recognize in the existence of rent the result of a co-operative action exercised by the earth itself. It would be wrong that the fear of having to admit that there is a gift from God, new the exclusive share of a certain number of his creatures, should influence our opinions; for this gift is an evident fact; and besides, without it, it would have been utterly impossible for humanity to fulfill its destiny in this world; and, if this gift has not continued the common domain, it is because it has pleased its author that it should produce its beneficent effect only on condition of becoming an object of private appropriation. All this it would be very easy to demonstrate, were this the place to do so.

III.133.24

—It remains for us to make a few observations on the particular points which characterize the theory called Ricardo's. This theory fully admits the existence of productive properties in the soil, which belong to it; but it accords to it the power of creating rent only in virtue of the fact that these qualities are not equally distributed through it. This is taking one of the circumstances which concur in producing the differences in the price of rents for the cause which gives rise to them. The origin of rent, as we have said, is the power of the land to return to those who cultivate it more products than they need for their subsistence and the recovery of the amount of their advances; and wherever the lands are adapted to do that, any one who desires can obtain from them this excess that is to say, a rent. Nor is there any need, as Ricardo supposes, of a rise in prices in order for rent to begin; rent appears the moment when the gathered crops leave a part disposable, and it is realized when those who harvest, finding consumers for that part, devote more time to their work than they would have to sacrifice if they limited their efforts to gathering only for themselves. Finally, it is a very simple matter to state how far Ricardo's theory conforms to the reality. One has only to examine what would happen in a country where the lands were all of the same quality, all adopted to remunerate labor liberally, and all so situated as to enjoy the same advantages for the sale of their products. Well, in this case, see what would happen! As everywhere else, the population would obey the laws which urged them to multiply, and as everywhere else, they would rise to the level of the subsistence that agricultural labor could procure for them. There would be an increasing demand, and the cultivators, certain of a market for that portion of the harvest which they would not themselves need, would devote enough time to their labors to gather it, enough time to obtain a rent. The more the town population or industrial classes increase in number, the more would be demanded of the soil by cultivation, the wider would be the extent cultivated, and the more would rent increase. In such a country leasing of farms would appear; there would be found at the same time proprietors possessing more lands than they could themselves cultivate, or desirous of ridding themselves of the whole or some part of their burden of personal labor, and workmen disposed to take their place or to offer prices for a lease, proportioned to the amount of net income which they judged the soil capable of furnishing. The principal error of Ricardo's theory consisted in ascribing a decisive influence to the rise in the exchange value of the means of subsistence, which he thought inevitable.

III.133.25

Causes which influence the Value of Rent. It is an incontestable fact that the price of rent has risen in proportion as civilization and the comforts of life have increased in human society. It is essential to state clearly the causes under the influence of which this has been effected.

III.133.26

—There are three causes of which account has been taken. One is the incorporation into the soil of the capital necessary to render it more and more productive; the second is the gradual extension of cultivation, over lands either less fertile or more difficult to bring under cultivation than those which had already been applied to for crops; the third is the continual improvements in the application of agricultural labor and skill. We will point out their effects. and, as far as possible, estimate the extent of each.

III.133.27

—As we have said, rent is the portion of the fruits of the earth obtained over the expenses of production or quantities necessary to satisfy the demands of those who work the land, and, in the savage state, the most fertile lands leave some surplus at the disposal of their masters. But as soon as a population, in stead of confining itself to gathering the spontaneous productions of the soil, undertook to direct its active forces, to the primitive profit were added other portions of the product, these latter being due to the immobilization of capital or advances made in the interest of production. Before sowing seed, it was necessary to break and clear the land, and the work, almost always long and toilsome, cost much. This done, they had to level and prepare a soil full of hollows and humps, in consequence of the extraction of the roots; and then, to execute numerous works, some of which were designed to facilitate labor, others to insure the preservation of the crops; and, by degrees, a considerable amount of capital was incorporated into the fields brought under cultivation. What is to be remarked, is, that this capital, for the most part, returned not only the amount of the interest and profits acquired by its employment, but, thanks to the impulse it gave to the co-operative power of the earth, it made to spring up, besides, a new surplus, to increase that which existed previous to its consumption. Consequently, in the present condition of rents, the latter combine three elements having a distinct origin. It would be idle, moreover, to attempt to state exactly the proportionate part of any one of these elements, or even to decide what is only a suitable return for outlays embodied in material improvements all that can be affirmed is, that what holds the least place is the primitive element and it is very easy for any one to assure himself of this if he will merely notice wherein consists that which uncultivated lands yield to the wild tribes who live on their natural products. The two others, on their natural products. The two others, on the contrary, are by far the more powerful. Clearing of land, in our day, is very costly, and certainly must have been far more so originally, because of the coarseness and imperfection of the processes and the instruments in use. On the other hand, there are farms and metairies [i.e., small farms in France let on halves to the cultivator.

III.133.28

Trans.] where the value expended in constructions and buildings for use, fences, ditches, and permanent works, is equivalent to from a third to a half of that of the land cultivated. This explains why there are economists who. impressed by the great and constant sacrifices made with a view to production, will not see in rent anything but the amount of the indemnity to which these sacrifices entitle those who make them.

III.133.29

—The necessity for a people who are increasing in numbers, to extend cultivation over lands lying fallow, has been ranked among the causes which exert a decisive influence on the price of rent. The reader has seen. in what we have said of Ricardo's theory, what consequences that writer attributes to it. In his opinion, prices rise gradually as labor has to take up with lands less adapted to recompense its efforts it is the expense incurred where it is least remunerated, which fixes the exchange value of the means of subsistence, and hence the rise and progressive increase of rent.

III.133.30

—People certainly consult, in the choice of lands to bring under cultivation, the degree of productiveness which these lands present at the time; and, in the natural order of the development of labor, they only attack the poorer lands when the others have ceased to provide sufficiently for the exigencies of consumption. It is an evil that all lands are not at the same time better and of like quality. Humanity would be better off for a different distribution of the natural fertility of the soil from which it is fed: but has this evil all the effects attributed to it? Does the upward movement which it tends to give the prices of products really take place as people suppose? Are there not causes of decline at work, which on their side are sufficient to maintain such relations between the expense and the results of production, as to prevent suffering in the community? This is a question of the utmost importance, and demands a serious examination.

III.133.31

—We have not thus far taken sufficient account of the influence on rent and prices, of the progressive development of knowledge of agricultural affairs. Of all causes this acts most energetically and constantly, and its effects are the most decisive. Sometimes it reduces the expenses of production by a given quantity of provisions. Sometimes it increases the quantity harvested at the same outlay; and, in both cases, it raises the rent by increasing the surplus obtained after deducting expenses; and, at the same time, it arrests the rise in price while multiplying the amount of provisions destined to meet the demands of consumption.

III.133.32

—One single thing might take away, from progress in the art of agriculture, the power of raising the rent. This would be if the sale value of the products diminished in proportion as labor, having become more enlightened and more powerful, succeeded in deriving more produce from the lands. But, as we know, the means of subsistence have the privilege of never waiting long for a demand. As soon as they become more abundant, the population is not long in multiplying, and soon wants rise to the level of the supply. And is there not also a saving realized in the expense of cultivation, an improvement in the application of the efforts of labor, which does not increase the part of the product which remains net after expenses are deducted, and which consequently does not add to the rent of the proprietors?

III.133.33

—In what measure has the diminution in the expense of production due to the improved application of labor, served to raise rent, and to preserve the higher prices which the extension of cultivation to new lands tended to produce? It would be impossible to state positively; but there is no doubt that this double effect has been fully produced.

III.133.34

—See, in the first place, what an economy in manual labor the gradual improvement of the instruments of production has brought about. Not only good modern plowshares perform in one day twice as much work at least as the best plows of the ancients, but they break lands formerly impenetrable to the share, and they plow the others more deeply. To reaping-hooks of brass or beaten iron have succeeded scythes highly tempered, under the blade of which crops fall rapidly and without loss, which, before their invention, required a much larger number of hands. All the tools and machines which were known in the middle ages have been improved, and, thanks to new inventions, there is no country even but little advanced in agriculture, which does not contain a good number of others of quite superior efficiency.

III.133.35

—This is, however, but the smallest part of the improvements realized. For the productions originally demanded of the earth, similar ones, which are both more hardy and of better yield, have been gradually substituted. By the side of the vegetables then cultivated, or in their place, have come new species from the most distant parts of the globe, which have been admitted in the rotations of crops, because of the increase of product they give on a like surface. This is not all: science has not ceased to reveal new means of fertilization. Materials whose power was unknown have added to the effect of fertilizers; substances that had been left unused have been mixed with arable beds, and have communicated to them the productive qualities which were lacking; and cultivation has been more widely developed and made increasingly productive. In consequence, lands that were despised at the close of the last century, for want of knowledge how to utilize them, have, with small outlay, taken rank among the most fertile, and some, like those characterized in England as poor lands, and in France as lean and dry, are to-day considered the most easily worked, and are farmed out at the highest price. And as to the other lands, we might show some in France, which, sixty years ago, yielded scarcely ten or eleven hectolitres to a hectare (i.e., less than twelve bushels to an acre), which now yield eighteen to twenty hectolitres. This is an addition of about 140 francs (about $27); and it is important to observe that this addition has only involved an increase of less than 70 francs in expense. Also, farm rents which did not reach 35 francs have risen to 70 or 80 francs, while yielding to those who paid them larger and surer profits. Certainly this is a case where the increased power of art has done more, of itself alone, to raise rent, than all other causes combined.

III.133.36

—Such facts (and it would not be difficult to cite many others) attest sufficiently the effects of the successive conquests of human intelligence, and how, by gradually reducing both the toil and the outlay appropriated to production, they must have increased the net product of the land, and consequently the rent. That they have sufficed at the same time, to prevent the price of provisions from rising, and to restrain the effect of the inconveniences connected with the extension of cultivation to lands of inferior quality, is so much the more certain because there has been effected in Europe another improvement, which, by itself alone, would have permitted the population to double, without recourse being had to new portions of the soil. and without any increasing demand for grain. This improvement is in the grinding of grain. the quantity of grain, which during the sixteenth century, only yielded 100 lbs. of flour at the mill, now yields more than 190, owing to the successive improvements in the processes employed.

III.133.37

—It should also be remarked, that, during the middle ages, the improvements in agriculture were both slow and little marked: the agricultural classes were ignorant, and their occupations were regarded with contempt. In our day, on the contrary, they are more enlightened; and on the other side, the natural sciences have put within their reach a multitude of inventions which it has become possible for them to utilize. Moreover, for the last fifty years especially, two well-attested facts have been noticeable: one is the stability or the decline in the price of cereals in most of the advanced countries; the other is a rise in rent and the leasing price of farms with a rapidity unknown at previous periods.

III.133.38

—There is, however, one fact of considerable consequence, which seems irreconcilable with the statement we have just given, and which, on that account, calls for an explanation. This fact is the decline in the price of wheat in the least populous countries of Europe. Thus, wheat is worth only 10 to 11 francs a hectolitre in Hungary, and only 9 to 15 in Russia and Poland, according to the provinces. On the contrary, it has been worth, on an average, for the last ten years, 16 francs 40 centimes in Prussia, 16 fr. 60 c. in Spain, 18 fr. 74 c. in France, and a little more than 22 francs in England. Surely, these figures differ enough to attest that abundance of land permits wheat to be produced on conditions which cease to be as advantageous in proportion as the land becomes limited. Doubtless it is indeed so. A thinly scattered population are free to sow only the better portions of the soil they occupy, and to leave each of the parts which have just furnished a harvest, to rest; and it is certain, that, owing to this mode of changing the localities cultivated, wheat is obtained at less expense than if they were obliged, in order to supply the more urgent necessities, to confine their labors more persistently and continuously to the same arable fields. But it is essential to remark that western Europe has passed through ages during which this mode of culture sufficed for the exigencies of consumption, and yet everything combines to strengthen the belief that it was not then provided with food in the same abundance nor at as low a price as it now is. The following reasons support this assertion. Doubtless it would be impossible to prove exactly what was the price of wheat in France five or six centuries ago. The measures of capacity, notwithstanding the identity of name, differed enormously in their contents, not only in different provinces, but even in different parishes in the same province. In the second place, the average prices, when obtained, confounded, under the designation of wheat, cereals of all sorts: finally, the purchasing power of money was greatly in excess of what it is in our day, when the coin and paper in circulation are abundant; but it is sufficient to read, in the authentic acts which have escaped destruction, the figures relative to the price of days' work, as well as of provisions, as they were at the same times and in the same places, to recognize that the exchange value of wheat was at least equal to what it is at present. Thus, in Normandy, agricultural wages at the end of the twelfth century, were equivalent to less than six litres (about 5¼ qts.) of wheat. From that time, we see them rise by degrees to seven; and only within thirty years have they exceeded eight. We are forced to conclude, from these facts, that the real price of wheat, i.e., its exchange value, has not increased in that part of France.

III.133.39

—Now, this is what facts attest since it has been possible to ascertain them. Fifty years ago the current rates of cereals in France began to be quoted with all the accuracy desirable. During this long space of time the population has not ceased to increase in number and in comfort, and nevertheless the price of wheat is far from having risen. Thus, starting at 1800, the five decennial averages succeeded each other in the following order 19 fr. 87 c., 24 fr. 79 c., 18 fr. 36c., 19 fr. 4 c., 18 fr. 74 c. The particularly high average of the years 1810-20 is attributable to the wars of the empire, the invasion of 1814 and of 1815, and the scarcity of 1816 and 1817: but after 1820, prices fell below the figures previous to 1810 and 1800; and it is a matter well worth attention that never has rent, in the advanced portions of France, increased so much as since 1820, when the sale price of grain diminished or remained stationary.

III.133.40

—In England also, prices, within thirty years, have not ceased to decline. Inconsiderate legislation, monetary circumstances, and the effects of war, had combined to render them exorbitant; and, during the ten years from 1810 to 1820, the average per hectolitre rose to a little more than 38 francs; but from that time they declined, first to 30 francs for the decennial average, then to 25, and finally, before the reform in the corn laws, to a little less than 22; that is to say, below their figure between 1790 and 1800.

III.133.41

—Why is it that the price of wheat has not risen in the most populous part of Europe to-day in proportion as more land has had to be brought under cultivation, and that we find it as low in that the least populous? It is because, in past centuries, art was still in its infancy. for lack of intelligence and knowledge, as well as for lack of properly conditioned working material, the laborers could gather their harvests only by the strength of their arms, and the expenses of labor, compared with its results, were much greater than they are to-day. If, in the United States of North America, or in the regions beyond the Oder, the abundance of land has, on the contrary, its effect, it is because the people derive an advantage from it by means of implements, methods and processes, of which communities in former times learned the use only when they had already begun to press upon one another in the territory at their disposal. American agriculturists, aided by implements which were lacking to the people in the middle ages, can turn to profit their natural advantages of space. Those of the north of Europe are still too ignorant or too poor to be able to make as general use of these improved implements; but they nevertheless do use them; and to be convinced of it, one has but to observe that there exist in Poland, Hungary, and even Russia, a goodly number of large seigniorial estates, under the management of men educated in the best agricultural schools of Germany, who carry into the details of the work the most recent acquisitions of their science and arts.

III.133.42

—Finally, it is wrong to adopt the practice of considering the price of wheat as giving the measure of the difference in the expense of agricultural production in the various countries. What we should examine is, the general price of provisions, and not that of particular articles which do not figure equally everywhere in consumption. Wheat is cheap in the half-untilled countries of Europe; and yet it is much too dear for the poor people who harvest it. They subsist almost wholly on rye; and, while in France rye does not occupy more than a third as much arable surface as wheat, and in England not more than a fourth, in Russia, Poland and Hungary, it takes from seven- to nine-tenths as much. What is the result? In these countries, wheat, for which a small number of particularly fertile lands are reserved, is not worth, relatively to rye, as much as in more advanced countries, and the price of the common means of subsistence there is really higher than the price of wheat, considered by itself, would indicate. On the other hand, it should be observed, that, by the side of the products the extension of whose cultivation tends to increase the price, man continually manures the soil, which, at less outlay, insures him the complement of his subsistence. In France, at the time when the average harvest was 80,100,000 hectolitres of wheat, 12,260,000 hectolitres of meslin (a mixture of wheat and rye), or 30,700,000 hectolitres of rye, there were also gathered 89,580,000 hectolitres of potatoes, more than 21,000,000 hectolitres of maize, buckwheat and millet, nearly 10,000,000 hectolitres of small grain and dry vegetables, and, besides, an immense quantity of garden products. Evidently, if the price of wheat had tended to rise, there would have been found, in the increasing abundance of other means of subsistence, a supplement which would have prevented living becoming more dear.

III.133.43

—These considerations and these facts authorize us to affirm that there is in the natural progress of the applications of labor a power equal or superior to that of the causes which tend to augment the charges of production. It is this power which, notwithstanding the necessity of extending the clearing to lands less adapted to produce, has prevented the price of products from rising, and which, by continually increasing the proportion in which the surplus is realized, has contributed most to the rise in rent.

III.133.44

—It is well to pay serious attention to this point. If such had not been the present course of things, everything would be inexplicable in the least contestable results of the progressive movement of the arts and of civilization. It is a fact beyond doubt, that the more enlightened any population is, the more they increase in number and comfort, and the more the means of subsistence at their disposal become abundant and improve in quality. No fact is better attested. The day laborers of England, France, Holland and Switzerland, are not only better lodged and clothed than they were in the fifteenth and sixteenth centuries, or than those of Russia, Hungary and Poland as yet are, they are also much better fed. Their bread is now composed in part of wheat, and not alone of rye. They eat meal and vegetables; they use less coarse and more varied food. Now, how could it be thus, if it were true that the necessity of increasing the area of cultivated land had resulted in rendering production more and more difficult and expensive? Under the fatal control of the law to which Ricardo's school accord an invincible predominance, we should have seen the remuneration of the efforts of labor gradually diminish; every addition to the quantity harvested would have been obtained only by means of sacrifices comparatively greater; the agricultural class would have increased its ranks as it became necessary to require more of the land; and the time would have come when the other classes, restrained by the obligation to surrender too large a portion of the fruit of their industry, in return for their usual subsistence, would have been arrested in their development. Well, quite the contrary of all that has happened. Starting with the centuries of ignorance and poverty, those centuries when land was so plenty that only the best was cultivated, it has been the manufacturing and commercial classes which have multiplied the most in proportion, and which have at the same time amassed the most capital and wealth. Surely, nothing like it would have been possible if the continual progress in agricultural knowledge had not put the laborers in the rural districts in the way of deriving more ample resources from the soil, and of supplying the rest of the community with food without having to demand prices continually higher.

III.133.45

—One other erroneous supposition is, that the market price of provisions must necessarily tend to rise, in order that the area of cultivation be enlarged. The entire history of agriculture attests, on the contrary, that everything in that regard has been only the fruit of happy discoveries. Thus, it was the invention of a plow with a broad share which determined the breaking up of many aluminous and compact lands previously refractory to the efforts of labor. The employment of lime and marl in places where they were unknown, has permitted the land to be sown to wheat; and it was the discovery of the fertilizing properties of animal charcoal, pulverized bones, and a good number of other substances belonging to the various kingdoms of nature, which revealed the possibility of obtaining rich crops from ground reputed too poor to repay the efforts of continued culture. Similarly, it was the introduction of sainfoin on chalky lands that rendered them productive; and it was an idea which occurred to a sutler in the Spanish army, during the long siege of Antwerp, of attempting to adapt the barren sand of the country to the cultivation of a few fresh vegetables, by burying in it the old, cast-off clothing of the soldiers, which revealed the secret of converting this sand into a soil which now ripens the best crops of Belgium. We have one more fine example of the manner in which discoveries and inventions operate. It is drainage. Is it the high price of food which led to its application? Assuredly not; for it came to take its place among the agricultural agencies and expenditures in England, at the very time when proprietors and farmers thought they had before them only a prospect of a decline. Thus have things happened, and thus will they continue to happen. Man has been cast upon this world, endowed with a faculty for improving his condition here. He has arrived armed, so as to be able gradually to extend the success of his struggles against nature, and the earth, very far from having been given to him as ground on which he would have to expend toil with constantly increasing ingratitude, has been given to him as an agent of production, for the direct assistance of which, when it should come to grow less, it would be easy for him to supply its place advantageously by the acquisition of intelligence destined to add more and more to the results of the application of his labor.

III.133.46

Some Opinions originating in Accredited Theories on the Subject of Rent. The existence of the rent of the soil, and the rise it has gradually taken, have given birth to some assertions, of which we must here say a few words. Adam Smith, after having shown that rent was a natural result of the co-operative action of the earth in agricultural labor, refrained from pushing farther the analysis of facts, and the examination of their consequences. Taking the principle as he presented it, its result, nevertheless, seemed to be, that the entire rent proceeded wholly from the presence in the soil of productive qualities, which would at all times have operated equally, and created from the beginning a wealth which some had taken possession of, without leaving anything to the others. This opinion was not long, in fact, in acquiring some consistency, and several writers, through embarrassments and ambiguities of language, which betrayed the indecision of their mind, did not fail to conclude that the existence of rent emanated from an exclusive fact of nature. and constituted a sort of monopoly, having no other claim to duration than its utility. The system of Dr Anderson, taken up, commented upon, and formulated mathematically by Ricardo, came to add new motives to those which had given currency to these assertions. In this system, rent, besides originating in an evil, had the disadvantage of increasing only in consequence of a real public misfortune It was the inevitable rise in the price of provisions which almost alone decided the progressive increase. The more the necessity of extending cultivation over lands as yet untilled contributed to change the pre-existing proportion between the expenditure and the results of production, the larger the incomes of the proprietors became, and it was, in fact, by the impoverishment of consumers that they had the privilege of increasing their wealth. Most of the English economists received these ideas admiringly, and promulgated them. To some, rent was a monopoly, which forced those who did not possess land to pay those who possessed it more for provisions than their cost; to others, it was, to use the expression of Scrope, a restriction on the usufruct of the gifts which the Creator has bestowed on men for the satisfaction of their wants. From this position to that implied in the celebrated saying, Property is robbery, is but a step; and this step was speedily taken. Now, it is for us to bring within the limits of truth, conclusions that are either extremely exaggerated or palpably false. If we had to treat here of the question of the right of property, it would be easy for us to demonstrate that this right is based no less upon justice than upon social utility, and to prove afterward, that without its application to land, all the human race, condemned to a pitiless servitude to hunger, would never, in any part of the globe. have succeeded in escaping from the miseries of a savage life; but, to keep to what especially concerns rent, there are several points which it will be sufficient to mention. The first is, that those who first began to cultivate, did not in reality receive for themselves any other rent than the raw product which it was possible to obtain from the little portion of untilled soil they had cleared, that is to say, a product so small that its withdrawal from the common domain could injure no one; the second is, that by obtaining their subsistence by cultivation, they restored to their fellow human beings infinitely more than they took from them. A family of savages require not less than four square kilometres to succeed in obtaining their support; and those who first devoted themselves to agriculture, being incapable of extending their labor over the one-hundredth part of such a space, added in reality to the resources of the community, by leaving it the product of the rest. The third is, that at the time when agriculture began, there were so many vacant lands that it was optional for each to appropriate to his own use such a part as he chose, and that, if there were families who refrained from doing so, it was because they preferred either to live by hunting. fishing and gathering fruits, or to devote themselves to some manufacturing business. Such were the circumstances which controlled the agricultural regime. Certainly, nothing in what tools place was prejudicial to the rights of any one whatever; everything, on the contrary, in the ancient memorials of human races, attests, that, far from considering as despoilers those who first taught them agriculture, they regarded them as benefactors.

III.133.47

—What has caused an illusion in a matter of this kind, is want of knowledge wherein rent consisted, at the time when agriculture began. Looking at the income which land secures for those who possess it, wherever civilization is advanced, people assume that it has always given such returns, and forget the labor and sacrifice it has cost a long succession of generations to make its income what it is. Certainly, if it were possible to decompose rent, and to separate its constituent elements in a rich and flourishing country, one would be surprised at the little the portion derived from the soil would count for in the whole; it would be scarcely perceptible beside what the capital expended in the interest of production, and the savings of labor due to the progress of agricultural science, have added to it. On another side, the errors propagated by the school of Ricardo have not ceased to exercise an unfortunate influence on many minds. Without doubt, the necessity of having recourse to lands less fertile than those which had been first brought under cultivation, would have enhanced the price of food, if the better application of human activity had not come in to restrain or overcome its effects; but. as we have shown, such was the course of things; and, if that necessity acted as an obstacle to the best which might have been realized, never was it a cause of diminishing the wealth already acquired.

III.133.48

—Everything, after all, in the part of the question which occupies us, may be reduced to a knowledge whether the existence and development of rent imposes on the consumers of the fruits of the earth sacrifices which might be spared them. Now, this would be true only in case the rate of rent exercised some influence on prices; and this case, as we know, can not occur. Admit, for example, in its whole extent, the theory which shows rent under the most unfavorable light, viz., the theory of Ricardo. Whither will you be led? To recognize that rent, arising from the necessity of extending cultivation to ground of less fertility, is only an inevitable result of the enhanced price of products whose attainment becomes more and more difficult. In this theory, it is not because rent arises and increases that prices rise; it is, on the contrary, because prices rise, that rent is created and increases. Society is obliged, under penalty of dearth, to pay a price for the necessities of life which secures the producers remuneration for the charge imposed upon them by the cultivation of the worst lands whose culture is indispensable; and hence arise benefits to the possessors of the other portions of the soil, which secure to them a rent so much the larger as their expenses of production are relatively less. Admit the doctrine contained in this article, which is in our opinion much more simple and true, and you will arrive at conclusions still more decisive. It is the peculiar fitness of the earth for production, which, by permitting it to return to those who cultivate it more products than they need in order to subsist and receive a return for their advances, which brings about rent. The more perfect labor becomes, the more is the amount of the expenses incurred in it, in proportion to the quantities harvested. reduced, and the more the excess which is converted into rent increases. If it is true that the necessity of enlarging the arable domain tends to increase the price of production, this tendency encounters, in the advantages connected with the successive improvements due to human ingenuity and skill, a counterbalancing power more than sufficient to restrain it, and this is why the consumption of provisions becomes at the same time extended and improved in all countries when the people become more advanced and enlightened Thus, rent is nothing else than the product of a gift of nature which men are permitted to turn to more and more profit, and whose increase is only an effect of the general development of prosperity. And this is so true, that if it had pleased Providence to increase the fertility of the soil a few degrees more, the price of provisions would have been less, and of rent, more. In the beginning it must have required less labor to obtain subsistence, and, after defraying expenses, there would have remained a surplus, a net product, much greater than that which is now realized under the name of rent.

III.133.49

—The reader will now see how little foundation there is for the charges brought and lamentations made against the existence of rent. Under whatever aspect the question is viewed, whatever theory we adopt, rent appears only as the result of circumstances which it is not in the power of man to change, and not as a portion deducted, to the exclusive advantage of some, from the resources acquired by others. Monopoly is then a very singularly chosen word when applied to the existence of rent. To be sure, the earth is limited in extent, and men can neither increase its surface nor extend to all its parts labor equally productive; but does it follow from this that there is anything in common between the appropriation of land and the concurrence of circumstances which constitutes a monopoly? All have not a lot of land, it is true; but have all a share in the possession of things which, like the earth, own their sale value and the possibility of producing a revenue, to the development of the productive capacity of human society? Land, unless iniquitous and hurtful laws immobilize it in the hands of privileged classes, is transmitted and exchanged like houses, manufactories, contracts for stated payments, or stock in any industrial enterprise. Whoever has savings at his disposal, is free to acquire a greater or less portion of it, and those who possess it are so far from deriving exclusive advantages from it, that some among them may always be found who are ready to give up what they have, for capital from which they hope for a better revenue. The possession of land or of any other sort of wealth, is so simply a matter of taste or convenience, that there are times when, even with a like product, it is not the kind of investment most sought after. To go to the essence of things, there is nothing in the assertions we have just examined, which might not apply to the inequality of fortunes even; for property in land is only one of the forms under which exists this inequality, which, born with society itself, will assuredly last as long as society.

H. PASSY.

III.133.50

—Besides the questions treated of in the above article, there is one which has been mentioned in the articles COST OF PRODUCTION and DEMAND AND SUPPLY: it is, whether rent constitutes a part of the cost of production. We think we can not do better than to quote the opinion so clearly stated by Mill. (Principles of Polit. Econ., book iii., chap. v.): "Rent, therefore, forms no part of the cost of production which determines the value of agricultural produce. Circumstances no doubt may be conceived in which it might do so, and very largely, too. We can imagine a country so fully peopled, and with all its cultivable soil so completely occupied, that to produce any additional quantity would require more labor than the produce would feed: and if we suppose this to be the condition of the whole world, or of a country debarred from foreign supply, then, if population continued increasing, both the land and its produce would really rise to a monopoly or scarcity price. But this state of things never can have really existed anywhere, unless possibly in some small island cut off from the rest of the world; nor is there any danger whatever that it should exist. It certainly exists in no known region at present. Monopoly, we have seen, can take effect on value only through limitation of supply. In all countries of any extent, there is more cultivable land than is yet cultivated; and, while there is any such surplus, it is the same thing, so far as that quality of land is concerned, as if there were an infinite quantity. What is practically limited in supply is only the better qualities; and even for those, so much rent can not be demanded as would bring in the competition of the lands not yet in cultivation; the rent of a piece of land must be somewhat less than the whole excess of its productiveness over that of the best land which it is not yet profitable to cultivate; that is, must be about equal to the excess above the worst land which it is profitable to cultivate. The land or the capital most unfavorably circumstanced among those actually employed, pays no rent; and that land or capital determines the cost of production which regulates the value of the whole produce. Thus, rent is, as we have already seen, no cause of value, but the price of the privilege which the inequality of the returns to different portions of agricultural produce confers on all except the least favored portion. Rent, in short, merely equalizes the profits of different farming capitals, by enabling the landlord to appropriate all extra gains occasioned by superiority of natural advantages. If all landlords were unanimously to forego their rent, they would but transfer it to the farmers, without benefiting the consumer; for the existing price of corn would still be an indispensable condition of the production of part of the existing supply, and if a part obtained that price the whole would obtain it. Rent, therefore, unless artificially increased by restrictive laws, is no burden on the consumer: it does not raise the price of corn, and is no otherwise a detriment to the public, than inasmuch as if the state had retained it, or imposed an equivalent in the shape of a land tax, it would then have been a fund applicable to general instead of private advantage."

E. J. L.


Notes for this chapter


68.
A main point in Anderson's theory was, that increased demand for food leads to increase of price, and this permits additional cost to be bestowed in bringing inferior land into cultivation. (See Macleod's Kcon. Phil., vol. ii., p. 29.) E. J. L.
69.
Surely M. Passy can not think that Genovesi, Beccaria, Verri, the physiocrates, Hume, Condillac, Bastiat, Whateley, and all the other economists who have considered the cause of value to lie in human desire, thought there could be no demand for anything except that on which labor had been expended! How would he account for the value of undeveloped mines, quarries, etc., and what is more, for the value of labor itself!—E. J. L.
70.
Here M. Passy falls into the error (pointed out by Storch in his Polit. Econ.) of confounding the production of articles which have value with the production of their value.—E. J. L.
71.
The income from talents and moral qualities, being due to the "natural fertility" or "productive power" of the mind, bears so many points of resemblance to what M. Passy treats of under the title "Rent of the Soil," that some economists put it in the same category. Storch, in his Cours d'Economic Politique, devotes a chapter (chap. v., book III.) to the "Rent of Talents and Moral Qualities." [Original reads "Reat of Talents..."—Econlib Ed.]
72.
The reader will see how far this was from being a response.—E. J. L.

Footnotes for REPUDIATION.

End of Notes


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