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

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 be 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


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


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 the instruments of

production should be dearer. In a declining or stationary country, one

most important instrument of production is always cheap, namely, labour;

but this cheapness of labour does not counterbalance the disadvantages

arising from the dearness of capital; a bad system of culture; and,

above all, a fall in the price of raw produce, greater than in the price

of the other branches of expenditure, which, in addition to labour, are

necessary to cultivation.

It has appeared also, that in the progress of cultivation and of

increasing rents, rent, though greater in positive amount, bears a less,

and lesser proportion to the quantity of capital employed upon the

land, and the quantity of produce derived from it. According to the same

principle, when produce diminishes and rents fall, though the amount of

rent will always be less, the proportion which it bears to capital

and produce will always be greater. And, as in the former case, the

diminished proportion of rent was owing to the necessity of yearly

taking fresh land of an inferior quality into cultivation, and

proceeding in the improvement of old land, when it would return only the

common profits of stock, with little or no rent; so, in the latter case,

the high proportion of rent is owing to the impossibility of obtaining

produce, whenever a great expenditure is required, and the necessity

of employing the reduced capital of the country, in the exclusive

cultivation of its richest lands.

In proportion, therefore, as the relative state of prices is such as

to occasion a progressive fall of rents, more and more lands will

be gradually thrown out of cultivation, the remainder will be worse

cultivated, and the diminution of produce will proceed still faster than

the diminution of rents.

If the doctrine here laid down, respecting the laws which govern the

rise and fall of rents, be near the truth, the doctrine which maintains

that, if the produce of agriculture were sold at such a price as to

yield less net surplus, agriculture would be equally productive to the

general stock, must be very far from the truth.

With regard to my own conviction, indeed, I feel no sort of doubt that

if, under the impression that the high price of raw produce, which

occasions rent, is as injurious to the consumer as it is advantageous

to the landlord, a rich and improved nation were determined by law,

to lower the price of produce, till no surplus in the shape of rent

anywhere remained; it would inevitably throw not only all the poor land,

but all, except the very best land, out of cultivation, and probably

reduce its produce and population to less than one tenth of their former


From the preceding account of the progress of rent, it follows, that

the actual state of the natural rent of land is necessary to the actual

produce; and that the price of produce, in every progressive country,

must be just about equal to the cost of production on land of the

poorest quality actually in use; or to the cost of raising additional

produce on old land, which yields only the usual returns of agricultural

stock with little or no rent.

It is quite obvious that the price cannot be less; or such land would

not be cultivated, nor such capital employed. Nor can it ever much

exceed this price, because the poor land progressively taken into

cultivation, yields at first little or no rent; and because it will

always answer to any farmer who can command capital, to lay it out on

his land, if the additional produce resulting from it will fully repay

the profits of his stock, although it yields nothing to his landlord.

It follows then, that the price of raw produce, in reference to the

whole quantity raised, is sold at the natural or necessary price, that

is, at the price necessary to obtain the actual amount of produce,

although by far the largest part is sold at a price very much above that

which is necessary to its production, owing to this part being produced

at less expense, while its exchangeable value remains undiminished.

The difference between the price of corn and the price of manufactures,

with regard to natural or necessary price, is this; that if the price of

any manufacture were essentially depressed, the whole manufacture would

be entirely destroyed; whereas, if the price of corn were essentially

depressed, the quantity of it only would be diminished. There would be

some machinery in the country still capable of sending the commodity to

market at the reduced price.

The earth has been sometimes compared to a vast machine, presented by

nature to man for the production of food and raw materials; but, to make

the resemblance more just, as far as they admit of comparison, we should

consider the soil as a present to man of a great number of machines, all

susceptible of continued improvement by the application of capital to

them, but yet of very different original qualities and powers.

This great inequality in the powers of the machinery employed in

procuring raw produce, forms one of the most remarkable features which

distinguishes the machinery of the land from the machinery employed in


When a machine in manufactures is invented, which will produce more

finished work with less labour and capital than before, if there be no

patent, or as soon as the patent is over, a sufficient number of such

machines may be made to supply the whole demand, and to supersede

entirely the use of all the old machinery. The natural consequence

is, that the price is reduced to the price of production from the best

machinery, and if the price were to be depressed lower, the whole of the

commodity would be withdrawn from the market.

The machines which produce corn and raw materials on the contrary, are

the gifts of nature, not the works of man; and we find, by experience,

that these gifts have very different qualities and powers. The most

fertile lands of a country, those which, like the best machinery in

manufactures, yield the greatest products with the least labour and

capital, are never found sufficient to supply the effective demand of

an increasing population. The price of raw produce, therefore, naturally

rises till it becomes sufficiently high to pay the cost of raising it

with inferior machines, and by a more expensive process; and, as

there cannot be two prices for corn of the same quality, all the other

machines, the working of which requires less capital compared with the

produce, must yield rents in proportion to their goodness.

Every extensive country may thus be considered as possessing a gradation

of machines for the production of corn and raw materials, including in

this gradation not only all the various qualities of poor land, of

which every large territory has generally an abundance, but the inferior

machinery which may be said to be employed when good land is further

and further forced for additional produce. As the price of raw produce

continues to rise, these inferior machines are successively called into

action; and, as the price of raw produce continues to fall, they are

successively thrown out of action. The illustration here used serves

to show at once the necessity of the actual price of corn to the actual

produce, and the different effect which would attend a great reduction

in the price of any particular manufacture, and a great reduction in the

price of raw produce.

I hope to be excused for dwelling a little, and presenting to the reader

in various forms the doctrine, that corn in reference to the quantity

actually produced is sold at its necessary price like manufactures,

because I consider it as a truth of the highest importance, which has

been entirely overlooked by the Economists, by Adam Smith, and all those

writers who have represented raw produce as selling always at a monopoly


Adam Smith has very clearly explained in what manner the progress of

wealth and improvement tends to raise the price of cattle, poultry, the

materials of clothing and lodging, the most useful minerals, etc., etc.

compared with corn; but he has not entered into the explanation of the

natural causes which tend to determine the price of corn. He has left

the reader, indeed, to conclude, that he considers the price of corn as

determined only by the state of the mines which at the time supply

the circulating medium of the commercial world. But this is a cause

obviously inadequate to account for the actual differences in the price

of grain, observable in countries at no great distance from each other,

and at nearly the same distance from the mines.

I entirely agree with him, that it is of great use to inquire into the

causes of high price; as, from the result of such inquiry, it may

turn out, that the very circumstance of which we complain, may be the

necessary consequence and the most certain sign of increasing wealth and

prosperity. But, of all inquiries of this kind, none surely can be so

important, or so generally interesting, as an inquiry into the causes

which affect the price of corn, and which occasion the differences in

this price, so observable in different countries.

I have no hesitation in stating that, independently of irregularities

in the currency of a country, [13] and other temporary and accidental

circumstances, the cause of the high comparative money price of corn is

its high comparative real price, or the greater quantity of capital and

labour which must be employed to produce it: and that the reason why the

real price of corn is higher and continually rising in countries which

are already rich, and still advancing in prosperity and population, is

to be found in the necessity of resorting constantly to poorer land--to

machines which require a greater expenditure to work them--and which

consequently occasion each fresh addition to the raw produce of the

country to be purchased at a greater cost--in short, it is to be found

in the important truth that corn, in a progressive country, is sold at

the price necessary to yield the actual supply; and that, as this supply

becomes more and more difficult, the price rises in proportion. [14]

The price of corn, as determined by these causes, will of course

be greatly modified by other circumstances; by direct and indirect

taxation; by improvements in the modes of cultivation; by the saving

of labour on the land; and particularly by the importations of foreign

corn. The latter cause, indeed, may do away, in a considerable degree,

the usual effects of great wealth on the price of corn; and this wealth

will then show itself in a different form.

Let us suppose seven or eight large countries not very distant from each

other, and not very differently situated with regard to the mines.

Let us suppose further, that neither their soils nor their skill in

agriculture are essentially unlike; that their currencies are in a

natural state; their taxes nothing; and that every trade is free,

except the trade in corn. Let us now suppose one of them very greatly

to increase in capital and manufacturing skill above the rest, and to

become in consequence much more rich and populous. I should say, that

this great comparative increase of riches could not possibly take place,

without a great comparative advance in the price of raw produce; and

that such advance of price would, under the circumstances supposed, be

the natural sign and absolutely necessary consequence, of the increased

wealth and population of the country in question.

Let us now suppose the same countries to have the most perfect freedom

of intercourse in corn, and the expenses of freight, etc. to be quite

inconsiderable. And let us still suppose one of them to increase very

greatly above the rest, in manufacturing capital and skill, in wealth

and population. I should then say, that as the importation of corn

would prevent any great difference in the price of raw produce, it would

prevent any great difference in the quantity of capital laid out upon

the land, and the quantity of corn obtained from it; that, consequently,

the great increase of wealth could not take place without a great

dependence on the other nations for corn; and that this dependence,

under the circumstances supposed, would be the natural sign, and

absolutely necessary consequence of the increased wealth and population

of the country in question.

These I consider as the two alternatives necessarily belonging to a

great comparative increase of wealth; and the supposition here made

will, with proper restrictions, apply to the state of Europe.

In Europe, the expenses attending the carriage of corn are often

considerable. They form a natural barrier to importation; and even the

country which habitually depends upon foreign corn, must have the

price of its raw produce considerably higher than the general level.

Practically, also, the prices of raw produce, in the different countries

of Europe, will be variously modified by very different soils, very

different degrees of taxation, and very different degrees of improvement

in the science of agriculture. Heavy taxation, and a poor soil, may

occasion a high comparative price of raw produce, or a considerable

dependence on other countries, without great wealth and population;

while great improvements in agriculture and a good soil may keep the

price of produce low, and the country independent of foreign corn,

in spite of considerable wealth. But the principles laid down are

the general principles on the subject; and in applying them to any

particular case, the particular circumstances of such case must always

be taken into consideration.

With regard to improvements in agriculture, which in similar soils is

the great cause which retards the advance of price compared with the

advance of produce; although they are sometimes very powerful, they are

rarely found sufficient to balance the necessity of applying to poorer

land, or inferior machines. In this respect, raw produce is essentially

different from manufactures.

The real price of manufactures, the quantity of labour and capital

necessary to produce a given quantity of them, is almost constantly

diminishing; while the quantity of labour and capital, necessary to

procure the last addition that has been made to the raw produce of a

rich and advancing country, is almost constantly increasing. We see in

consequence, that in spite of continued improvements in agriculture,

the money price of corn is ceteris paribus the highest in the richest

countries, while in spite of this high price of corn, and consequent

high price of labour, the money price of manufactures still continues

lower than in poorer countries.

I cannot then agree with Adam Smith, in thinking that the low value of

gold and silver is no proof of the wealth and flourishing state of the

country, where it takes place. Nothing of course can be inferred from

it, taken absolutely, except the abundance of the mines; but taken

relatively, or in comparison with the state of other countries, much

may be inferred from it. If we are to measure the value of the precious

metals in different countries, and at different periods in the same

country, by the price of corn and labour, which appears to me to be the

nearest practical approximation that can be adopted [and in fact corn

is the measure used by Adam Smith himself], it appears to me to follow,

that in countries which have a frequent commercial intercourse with each

other, which are nearly at the same distance from the mines, and are not

essentially different in soil; there is no more certain sign, or more

necessary consequence of superiority of wealth, than the low value of

the precious metals, or the high price of raw produce. [15]

It is of importance to ascertain this point; that we may not complain of

one of the most certain proofs of the prosperous condition of a country.

It is not of course meant to be asserted, that the high price of raw

produce is, separately taken, advantageous to the consumer; but that it

is the necessary concomitant of superior and increasing wealth, and that

one of them cannot be had without the other. [16]

With regard to the labouring classes of society, whose interests as

consumers may be supposed to be most nearly concerned, it is a very

short-sighted view of the subject, which contemplates, with alarm, the

high price of corn as certainly injurious to them. The essentials to

their well being are their own prudential habits, and the increasing

demand for labour. And I do not scruple distinctly to affirm, that under

similar habits, and a similar demand for labour, the high price of corn,

when it has had time to produce its natural effects, so far from being

a disadvantage to them, is a positive and unquestionable advantage. To

supply the same demand for labour, the necessary price of production

must be paid, and they must be able to command the same quantities of

the necessaries of life, whether they are high or low in price. [17]

But if they are able to command the same quantity of necessaries, and

receive a money price for their labour, proportioned to their advanced

price, there is no doubt that, with regard to all the objects of

convenience and comfort, which do not rise in proportion to corn [and

there are many such consumed by the poor], their condition will be most

decidedly improved.

The reader will observe in what manner I have guarded the proposition. I

am well aware, and indeed have myself stated in another place, that the

price of provisions often rises, without a proportionate rise of labour:

but this cannot possibly happen for any length of time, if the demand

for labour continues increasing at the same rate, and the habits of

the labourer are not altered, either with regard to prudence, or the

quantity of work which he is disposed to perform.

The peculiar evil to be apprehended is, that the high money price of

labour may diminish the demand for it; and that it has this tendency

will be readily allowed, particularly as it tends to increase the prices

of exportable commodities. But repeated experience has shown us

that such tendencies are continually counterbalanced, and more than

counterbalanced by other circumstances. And we have witnessed, in our

own country, a greater and more rapid extension of foreign commerce,

than perhaps was ever known, under the apparent disadvantage of a very

great increase in the price of corn and labour, compared with the prices

of surrounding countries.

On the other hand, instances everywhere abound of a very low money price

of labour, totally failing to produce an increasing demand for it. And

among the labouring classes of different countries, none certainly are

so wretched as those, where the demand for labour, and the population

are stationary, and yet the prices of provisions extremely low, compared

with manufactures and foreign commodities. However low they may be,

it is certain, that under such circumstances, no more will fall to the

share of the labourer than is necessary just to maintain the actual

population; and his condition will be depressed, not only by the

stationary demand for labour, but by the additional evil of being able

to command but a small portion of manufactures or foreign commodities,

with the little surplus which he may possess. If, for instance, under a

stationary population, we suppose, that in average families two thirds

of the wages estimated in corn are spent in necessary provisions, it

will make a great difference in the condition of the poor, whether the

remaining one third will command few or many conveniencies and comforts;

and almost invariably, the higher is the price of corn, the more

indulgences will a given surplus purchase.

The high or low price of provisions, therefore, in any country is

evidently a most uncertain criterion of the state of the poor in that

country. Their condition obviously depends upon other more powerful

causes; and it is probably true, that it is as frequently good, or

perhaps more frequently so, in countries where corn is high, than where

it is low.

At the same time it should be observed, that the high price

of corn, occasioned by the difficulty of procuring it, may be considered

as the ultimate check to the indefinite progress of a country in wealth

and population. And, although the actual progress of countries be

subject to great variations in their rate of movement, both from

external and internal causes, and it would be rash to say that a state

which is well peopled and proceeding rather slowly at present, may

not proceed rapidly forty years hence; yet it must be owned, that the

chances of a future rapid progress are diminished by the high prices of

corn and labour, compared with other countries.

It is, therefore, of great importance, that these prices should be

increased as little as possible artificially, that is, by taxation.

But every tax which falls upon agricultural capital tends to check

the application of such capital, to the bringing of fresh land under

cultivation, and the improvement of the old. It was shown, in a former

part of this inquiry, that before such application of capital could

take place, the price of produce, compared with the instruments of

production, must rise sufficiently to pay the farmer. But, if the

increasing difficulties to be overcome are aggravated by taxation, it

is necessary, that before the proposed improvements are undertaken, the

price should rise sufficiently, not only to pay the farmer, but also the

government. And every tax, which falls on agricultural capital, either

prevents a proposed improvement, or causes it to be purchased at a

higher price.

When new leases are let, these taxes are generally thrown off upon the

landlord. The farmer so makes his bargain, or ought so to make it, as to

leave himself, after every expense has been paid, the average profits of

agricultural stock in the actual circumstances of the country, whatever

they may be, and in whatever manner they may have been affected by

taxes, particularly by so general a one as the property tax. The farmer,

therefore, by paying a less rent to his landlord on the renewal of his

lease, is relieved from any peculiar pressure, and may go on in

the common routine of cultivation with the common profits. But his

encouragement to lay out fresh capital in improvements is by no means

restored by his new bargain. This encouragement must depend, both with

regard to the farmer and the landlord himself, exclusively on the price

of produce, compared with the price of the instruments of production;

and, if the price of these instruments have been raised by taxation, no

diminution of rent can give relief. It is, in fact, a question, in which

rent is not concerned. And, with a view to progressive improvements, it

may be safely asserted, that the total abolition of rents would be

less effectual than the removal of taxes which fall upon agricultural


I believe it to be the prevailing opinion, that the greatest expense of

growing corn in this country is almost exclusively owing to the weight

of taxation. Of the tendency of many of our taxes to increase the

expenses of cultivation and the price of corn, I feel no doubt; but the

reader will see from the course of argument pursued in this inquiry,

that I think a part of this price, and perhaps no inconsiderable part,

arises from a cause which lies deeper, and is in fact the necessary

result of the great superiority of our wealth and population, compared

with the quality of our natural soil and the extent of our territory.

This is a cause which can only be essentially mitigated by the habitual

importation of foreign corn, and a diminished cultivation of it at home.

The policy of such a system has been discussed in another place; but, of

course, every relief from taxation must tend, under any system, to make

the price of corn less high, and importation less necessary.

In the progress of a country towards a high state of improvement, the

positive wealth of the landlord ought, upon the principles which have

been laid down, gradually to increase; although his relative condition

and influence in society will probably rather diminish, owing to

the increasing number and wealth of those who live upon a still more

important surplus [18] --the profits of stock.

The progressive fall, with few exceptions, in the value of the precious

metals throughout Europe; the still greater fall, which has occurred in

the richest countries, together with the increase of produce which

has been obtained from the soil, must all conduce to make the landlord

expect an increase of rents on the renewal of his leases. But, in

reletting his farms, he is liable to fall into two errors, which are

almost equally prejudicial to his own interests, and to those of his


In the first place, he may be induced, by the immediate prospect of an

exorbitant rent, offered by farmers bidding against each other, to let

his land to a tenant without sufficient capital to cultivate it in

the best way, and make the necessary improvements upon it. This is

undoubtedly a most short-sighted policy, the bad effects of which have

been strongly noticed by the most intelligent land surveyors in the

evidence lately brought before Parliament; and have been particularly

remarkable in Ireland, where the imprudence of the landlords in this

respect, combined, perhaps, with some real difficulty of finding

substantial tenants, has aggravated the discontents of the country, and

thrown the most serious obstacles in the way of an improved system of

cultivation. The consequence of this error is the certain loss of all

that future source of rent to the landlord, and wealth to the country,

which arises from increase of produce.

The second error to which the landlord is liable, is that of mistaking

a mere temporary rise of prices, for a rise of sufficient duration to

warrant an increase of rents. It frequently happens, that a scarcity of

one or two years, or an unusual demand arising from any other cause,

may raise the price of raw produce to a height, at which it cannot be

maintained. And the farmers, who take land under the influence of such

prices, will, in the return of a more natural state of things, probably

break, and leave their farms in a ruined and exhausted state. These

short periods of high price are of great importance in generating

capital upon the land, if the farmers are allowed to have the advantage

of them; but, if they are grasped at prematurely by the landlord,

capital is destroyed, instead o