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Sect. 5.

Book I. of wages on the rate of profits may often escape Chap. vii.

notice. It appears, however, that marked and con

siderable variations in the rate of profits may be Supposed results of changes in the rate of wages alone. It agricultural follows, that a fall of profits is no sure indication Efficiency.

of diminished productive power in any branch of human industry, and consequently can never be accepted as a proof of the decreasing efficiency of agriculture especially.

These propositions, with respect to the influence of variations in real wages on the rate of profits, appear to me, I confess, almost too obvious to be formally stated, had they not been formally denied, and very extensive consequences founded on the denial. Mr. Ricardo, and others who have followed in his track, have believed that they could trace every possible variation in the rate of profits, to a decrease in the productive power of agriculture alone. To establish the truth of this opinion, they were bound to shew, that no other cause could affect the rate of profits, and of course that variations in the rate of wages could not. Their mode of doing this was sufficiently simple. It consisted in denying (while treating on profits,) that any such thing as a permanent change in the rate of real wages could ever take place.

It would at first sight appear, that profits depend partly on the amount of the produce of labor, partly on the division of that produce between the laborers and capitalists; and that their amount, therefore, "might vary from a change in either of these particulars. If certain laborers, whose wages

Sect. 5.

amount to £100., or 100 quarters of corn, produce Book I.

Chap. vii. £112., or 112 quarters of corn, profits would be 12 per cent.; but they would sink to 10, if wages rose to £102. or quarters, just as certainly as they decrease of would if the productive power of the laborers di- agricultural

Efficiency. minished, and, wages remaining stationary, they only produced £110. or quarters.

But if it could be proved that the laborers share was, in truth, invariable, that with the exception of short intervals of time, they must continue to receive £100. or quarters, and neither more nor less, it would follow, of course, that all permanent variations in the rate of profits must proceed from changes in the productive power of industry alone. We have already remarked, that a diminution of profits rarely proceeds from a diminution in the productiveness of non-agricultural industry, which may raise the rate of profits, or sustain them when they are falling from other causes, but can seldom occasion their retrogression. Were it once admitted then, that profits never fall from variations in wages, it would follow that they must usually fall from a decrease of the productiveness of agricultural industry. The theory of the permanent immutability of real wages, or of the constant sameness of the quantity of necessaries consumed by the laborers on which rests this belief of the exclusive agency of the decreasing powers of agricultural labor in diminishing profits?, hardly requires a set discus

1 We have seen, in treating on wages, that they invariably “ rise with the rise in the price of raw produce. It may be “taken for granted, that under ordinary circumstances, no


Sect. 5.

Book !: sion to refute it. It is never adhered to by Mr. RiChap. vii.

cardo himself, except when treating the particular

subject of variations in the rate of profit. At other Decrease of times he speaks, without hesitation, of permanent agricultural alterations in the condition and habits of the la

borer, of variations in the rate of natural and real wages. But when attempting to simplify his analysis of the circumstances which influence the rate of profits, and to reject the agency of all but his favorite cause, namely, the return to the capital last employed upon the soil, he goes back to this position, equally inconsistent with facts and with his own arguments and admissions ; and asserts, again and again, that permanent changes in the rate of real wages never take place, and need never, therefore, be taken into account in estimating the causes of the rate of profits.

His defence of this assertion, when it is attempted to be defended, rests on an exaggeration of some facts connected with the subject of population.

Fluctuations in the rate of real wages, do, under certain circumstances, and to a certain extent, impel or retard the increase of the numbers of the laboring population, and by altering their relation to the

permanent rise takes place in the price of necessaries without “occasioning or having been preceded by a rise in wages. Thus we again arrive at the same conclusion, which we “have before attempted to establish, that in all countries and “all times, profits depend on the quantity of labor requisite “ to provide necessaries for the laborers on that land, or with “that capital which yields no rent." Ricardo, pp. 118, 128.

Sect. 5.

funds from which they are supported, react on the Book I. rate of wages. From this undoubted fact,

Chap. vii. many

have been misled, partly by haste, and partly by overstrained ingenuity, to draw the wide and very fal- Decrease of lacious inference, that every inerease or decrease in agricultural real wages will produce an expansion or shrinking of the population precisely sufficient to restore, after a time, the relation which existed (before the alteration of wages) between the numbers of laborers, and the funds for their support, and thus bring back wages to their former amount.

This opinion of the effects of alterations in wages, on the numbers of the population, will meet us again in a part of a subject when it will be more our business to examine it. At present, without a more extensive discussion of it, we may appeal to obvious facts and every day experience. We see very different rates of real wages prevailing in countries with similar climates and soils, and sometinnes, as in the case of England and Ireland, under the same government. We observe in the same countries, alterations taking place from century to century, and from generation to generation, in the food, clothing, lodging, habits, and general mode of maintenance of the people. We have already seen too', that a very moderate change in the rate of wages is sufficient, while the productive power of industry remains the same, to produce a very considerable change in the rate of profits: and we will venture, therefore, at present to assume, without

| See page 257.

Chap. vii.
Sect. 5.

Book I. further argument, that such a permanent rise in the

rate of real wages is neither impossible nor impro

bable, as is quite sufficient to produce alterations in Supposed Decrease of

the rate of profits, equal to the differences of that agricultural rate in any of the countries of Europe. This will

be enough to support the position we are maintaining, that a fall of profits is never an unequivocal proof of a diminution in the efficiency of agriculture, because it may proceed from a different division, between the laborers and their employers, of the produce of the national industry, while the amount of that produce remains unaltered, or is increasing in all its branches.

An increasing relative Value of raw Produce is

no Proof of the decreasing Efficiency of agricultural Industry.

Among the proofs of a decreasing efficiency in agricultural industry, the increasing relative value of raw produce is usually treated as one of the most decisive. And this, no doubt, would be a conclusive proof, could we suppose the productive power of manufacturing industry (meaning all industry other than agricultural,) to be stationary, while raw produce was thus rising in relative value. If 12 quarters of corn are observed to exchange for 12 pieces of cloth during one century, and in the next, 12 quarters of corn exchange for 24 pieces of cloth; then, if we were sure that no change had taken place in the expence of manufacturing cloth, we might very rationally conclude, that the cost of producing corn had doubled. But when we take

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