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that is, his share of the produce of his labour, may be diminished. This has been actually the case in Britain during the last twenty-five years. Money wages were, in 1810, double of what they had been in 1790; but, as the exchangeable value of our currency had been more than proportionably reduced, the nominal price of commodities rose still faster than wages, and the condition of the labouring classes was altered very much' to the worse. In such cases, to ascribe the rise of prices to the rise of wages, would be evidently absurd : In no case, however, will it be found, that a real rise of wages, unaccompanied with a fall in the value of money, was ever followed by a rise in the price of commodities.

But this is not all.–Although the exchangeable value of a commodity, or its real price, is in no case whatever increased by an increase in the rate of wages, it may, and in very many cases actually is, thereby reduced in its real price, or has its exchangeable value diminished.

It will not be difficult to establish this seemingly paradoxical conclusion. Suppose the twenty pairs of stockings, which exchanged for the forty pairs of gloves, to have been wholly or partially the produce of machinery, and the gloves of manual labour, it is clear, that when wages rose, the stocking manufacturer must either reduce the price of his stockings, or get more than the common and ordinary profits of stock. Not having any increase of wages to pay for that part of the work performed by machinery, and, of course, being so far in a better situation than the employers of labourers, whose wages we suppose to have been universally raised, if he did not voluntarily reduce his prices, there would be an influx of capital to his particular department of industry; and as others could furnish themselves with machines at the same price they had cost him, they would soon be so multiplied, that he would unavoidably be obliged to sink the price of his goods, till they afforded only the usual and general rate of profits.

But as capital employed in the great work of production, whether it consist of circulating capital, that is, of capital devoted to the payment of workmen's wages, provisions, raw materials, &c., or of fixed capital, that is, of capital vested in machinery, workhouses, warehouses, &c., must be reproduced from the commodities manufactured, their real price will be more or less affected by a rise of wages, according to the greater or less durability of the capital.

If,' says Mr Ricardo, when profits are at 10 per cent., a certain amount of capital, suppose 20,0001., be employed in supporting productive labour, and be annually consumed and reproduced, as it is when employed in paying wages; then, to afford this rate of profit on 20,0001., the commodities produced must sell for 22,0001. Now, suppose labour so to rise, that instead of 20,0001. being sufficient to pay the wages of labour, 20,9521. is required; then profits will fall to five per cent. ; for as these commodities would sell for no more than before, viz. 22,0001., and to produce them, 20,9521. would be requisite, there would remain no more than 1,048l. of profit on a capital of 20,9521. If labour so rose, that 21,153l. were required, profits would fall to 4 per cent.; and if it rose so that 21,3591. was employed, profits would fall to 3 per cent.'

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Now, suppose that a machine is made which can manufacture commodities without any manual labour whatever; and suppose, too, that its value is 20,0001., and that it is fitted to last 100 years— When profits were at 10 per cent., the whole value of the goods produced annually by this machine would be 20001. 2s. 11d.; for the profit of 20,0001., at 10 per cent., is 20001.; and an annuity of 2s. 11d., accumulating at 10 per cent. will, in 100 years, replace a capital of 20,000l. But as no wages would be paid by the owner of the machine, he would, after a rise of wages had reduced the profits of stock in those departments of industry where the assistance of workmen was required, be obliged, because of the competition of capitalists, to reduce the price of his commodities to such a sum as would yield only the common and ordinary rate of profit, and be sufficient to replace the machine itself at the end of 100 years. Thus, to use the words of Mr Ricardo

- when profits fell to 5 per cent., the price of his goods must Fall to 10071. 13s. 8d., viz. 10001. to pay his profits, and 71. 13s. 8d. to accumulate for 100 years at 5 per cent., to replace his capital of 20,0001. When profits fell to 4 per cent., his goods must sell for 8161. 38. 2d.; and, when at 3 per cent., for 6321. 16s. 7d. By a rise in the price of labour, then, under 7 per cent., or, what is the same thing, by a fall of profits to that extent, which has no effect on the price of commodities wholly produced by labour, a fall of no less than 68 per cent. is effected on those commodities wholly produced by machinery calculated to last 100 years.'

If this machine were only calculated to last 10 years, the price of the commodities it produced would be less affected by a rise of wages and a fall of profits. On this hypothesis, when profits were at 10 per cent., they would sell for 32541. ; when at 5 per cent., for 2590. ; when at 4 per cent., for 2465l. ; and when at 3 per cent., for 23441.; for such are the sums requisite to place the profits of the proprietor of the machine on a par with others, and to replace the machine itself at the expiration of 10 years. If the machine would last only 5, 4, 3, &c. years, prices would be proportionably less affected by a rise of wages. According, therefore, as machinery is more or less durable, or according as the fixed capital employed in producing commodities approaches more or less to the nature of circulating capital, prices will be less or more affected by a rise of wages and a fall of profit. Mr Ricardo calculates, that when profits fall from 10 to 3 per cent., the goods prodụced with equal capitals will fall 68 per cent. if the machine would last - 100 years. 28 per cent. if it would last

10 ditto. 13 per cent. if it would last

- 3 ditto.' And little more than 6 per cent. if it would last only

It appears, then, that in proportion to the quantity and the durability of the fixed capital employed in any kind of production, the relative prices of those commodities on which such capital is employed, will vary inversely as wages—that is, they will fall as wages rise. It appears, too, that no commodities whatever are raised in absolute price, merely because wages rise; that they never rise unless additional labour be bestowed on them ; but that all commodities, in the production of which fixed capital enters, not only do not rise with a rise of wages, but absolutely fall. And it further appears, that as the employers of labour'ers are altogether unable to indemnify themselves by raising the price of their goods, for any increase of wages they may have to pay to their workmen, a rise of wages is only another name for a fall of profits, and vice versa. These things appear to us to be clearly made out in the work before us,-and it is needless to enlarge on their importance. They enter deeply into all the investigations of political economy, and give a new aspect, indeed, to the whole of that science.

The theory, however, which teaches that the exchangeable value of a commodity can only be increased by an increase in the quantity of labour necessarily expended on its production, would not be complete, if it could be shown that Rent entered as a component part into price; for if this were really the case, it would follow, that prices must vary as rents vary, or that the one must rise and fall with every rise and fall of the other. It

is therefore necessary briefly to inquire into the NATURE AND pm CAUSES OF RENT.

It is not easy to imagine that any inquiry into a complex and difficult subject, could be more satisfactorily conducted than that of Mr Ricardo, regarding the nature of Rent: although, on this subject, he is not equally original as in other parts of his work. He has given a much better exposition of the principles which regulate the rise and fall of rent, than any other writer; but the leading facts, which show that rent does not enter into price, were previously ascertained in two pamphlets of very great merit, published almost at the same instant by Mr Malthus, and a: Fellow of the University of Oxford, Mr Ricardo's principal merit consists in his having traced the ultimate consequences of this doctrine,-in having stripped it of the errors by which it had been encumbered, -and in having shown its importance to a right understanding of the fundamental principles of political economy.

Rent is properly— that portion of the produce of the earth which is paid by the farmer to the landlord for the use of the natural and inherent powers of the soil.' If buildings have been erected on a farm, or if it has been enclosed, drained, or in any way improved, by an expenditure of capital and labour, the sum which a farmer would then pay to the landlord for its use, would be composed not only of what we call rent, but of a remuneration for the use of the capital which had been laid out in improving the soil. In common language, these two sums are always confounded together, under the name of rent; but, in an inquiry of this nature, it is necessary to consider them as perfectly distinct. The laws by which profits and rent are regulated, being totally different, those which regulate the one only, cannot be accurately ascertained, if they are not separateJy considered.

If any commodity could be had at all times, and without any exertion, it would have no exchangeable value, however necessary it might be to our comfort, or even existence. In many situations, water, from its great plenty, and from the ease with which any person can make himself master of any quantity of it, has no value in exchange; and in no case would we give the smallest sum for innumerable barrels of atmospheric air. Now, on the same principle, it is evident, that if the supply of land was inexhaustible, and if it was all of the same quality, and equally well situated, no such thing as rent would ever be heard of; for, assuredly, no person would choose to pay for a commodity, which he might get at pleasure for nothing.

On the first settling of any country abounding with rich and fertile land, there is never any rent; and it is only because land is of different qualities with respect to its productive powers; and because, in the progress of population, the supply of rich and fertile land becomes exhausted, and land of an inferior quality, or less advantageously situated, must be brought into cultivation, that rent is ever paid for the use of it. When,' says Mr Ricardo, “in the progress of society, land of the second degree of fertility is taken into cultivation, rent immediately com

mences on that of the first quality, and the amount of that rent will depend on the difference in the quality of these two portions of land. Where land of the third quality is taken into cultivation, rent immediately commences on the second, and it is regulated as before, by the difference in their productive powers. At the same time, the rent of the first quality will rise, for that must always be above the rent of the second, by the difference of the produce which they yield with a given quantity of capital and labour. With every step in the progress of population, which shall oblige a country to have recourse to lands of a worse quality, to enable it to raise its supply of food, -rent on all the more fertile land will rise.'

Now, the sole reason why rent begins to be paid on land of the first quality, whenever land of a secondary quality is taken into cultivation, is, because on the inferior land a greater expenditure of capital and labour is necessary to afford the same produce. When the wants of society force us to have recourse to poorer soils, rent immediately begins to be paid on land of the first quality, just because there cannot, in the same country, be two rates of profit :--and if we suppose, that with an equal expenditure of capital and labour, land, of different degrees of fertility, yields 100, 90, 80, 70, &c. quarters of wheat, the 10 quarters of excess on the first over the second, would, when they were both cultivated, really constitute rent, whether they were farmed by landlords or tenants ;-for the cultivator of the inferior land would obtain the same profits on his capital if he were to cultivate the richer land, and be able, over and above, to pay 10 quarters as rent. In like manner, the 20 quarters of excess of the first over the third, would, after lands of the third degree of fertility had been cultivated, constitute rent, and so on as lands of inferior quality were successively brought under cultivation.

• If then,' to use the words of Mr Ricardo, 'good land existed in a quantity much more abundant than the production of food for the increasing population required, or if capital could be indefinitely employed without a diminished return on the old land, there could be no rise of rent ; for rent invariably proceeds from the employment of an additional quantity of labour, with a proportionably less return.'

The raising of raw produce is extremely different from every other species of industry. In manufactures the worst machinery is first set in motion, and every day its powers are improved ; and it is rendered capable of yielding a greater amount of produce with the same expense. The discovery of a new machine, or of a more expeditious and less expensive method of manufacturing, very soon supersedes the older and clumsier machinery previously in use; while the consequent competition

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