Chap. vii. Increase of Rents. communities corn may be constantly at a monopoly Sect. 2. price. It is so probably in the Isle of Jersey, where there is always a pressing demand for raw produce, Farmers' which in war kept up rents to £14. per English acre, and in peace to £6. or £7. In larger countries too, though possessing much uncultivated soil, corn may, for a long period of time, be at a monopoly price, provided the increase of population keeps steadily ahead of the increase of tillage. It must be confessed, however, that a continuous monopoly price of corn is a circumstance which, though not impossible, is very unusual in countries of considerable extent and great variety of soil. In such countries, if the produce of the soils in cultivation sells for more than will realize the usual rate of profit on the capital employed, other lands are cultivated; or more capital laid out on the old lands, till the cultivator finds he can barely get the ordinary profit on his outlay. Then, of course, tillage will stop, and in such countries, therefore, corn is usually sold at a price, not more than sufficient to replace the capital employed under the least favorable circumstances, and the ordinary rate of profit on it: and the rent paid on the better soils is then measured by the excess of their produce over that of the poorest soil cultivated by similar capitals. If A be a soil which produces to a quantity of capital (n) 10 quarters, and pays the ordinary profits on stock; then B, if to the same capital (n) it yields 12 quarters, will have the price of two quarters as surplus profits, and will pay it as rent. Let us suppose a country then, possessing gradations of soil, increasing in fertility from Book I. Chap. vii. Sect. 2. Increase of A to Z, of which A returns to £100. £110., and the others progressively to Z, more than £110. This will represent the real position of the soils cultivated in such extensive countries. In the progress of num- Farmers' bers, of wealth and knowledge, let us suppose a rude Rents. and unskilful mode of cultivation gradually giving place to a better; and additional capital and labor accumulating for the more complete culture of every class of soil: and then let us observe what would be the necessary effects upon rents (or surplus profits) of this general accumulation of capital, in the cultivation of soils of unequal goodness. Let A have been formerly cultivated with £100. yielding annually £110., £10. being the ordinary profits on stock and B with £100. yielding £115.: and C with £100. yielding £120. and so on to Z. As all above £110. on each would be surplus profits, or rent, the rent of B would be £5., and that of C £10., &c. &c. In some indefinite time let each of these qualities of soil be cultivated with a capital of £200., and their relative fertility remaining as before, let their produce be proportionably increased, A will produce £220., B £230., C£240. All above £220. on each will now be surplus profits, or rent. The rent of B, therefore, will have become £10., that of C£20. That is, the rent of each will have doubled. It is in this manner that the increasing amount of capital employed on the land of an improving country necessarily elevates rents (or the surplus profits) on all the better soils; and this quite independently of alterations, either in the relative fertility of the soils cultivated, or in the amount of produce obtained N BOOK I. by the application of given quantities of capital to Farmers' Rents. It may be suggested, perhaps, that though we Increase of admit the additional capital employed on the worst soil, to yield the same profit as that with which it was originally cultivated, (a circumstance of which we shall presently examine the probability), still it is not probable that the better lands will yield a larger produce to the additional capital used, exactly proportioned to the superiority of their original fertility. This may be so, and a rise of rents will still take place, but it will be different in amount. They yielded to the first £100. laid out as capital, A £110., B £115., C £120. Let them yield to the second, A £110., B £113., C £118. All above £110. of the additional produce will be rent, B will then pay £3. additional rent, C £8. The relative fertility of the different soils will be changed. The superiority of the better soils will have become less, if considered relatively to the whole mass of capital now employed on each; but still rents will rise generally: not so much, however, it will be observed, as if the relative fertility of the various soils, after the additional outlay on all, remained precisely the same. It is probable, that in most instances the actual rise will accord with the first calculation; and that the several additions will be proportioned to the original goodness of the soils. If B and C had a certain superiority over A, when cultivated in rough pastures, corn crops, and fallows, then when the pasture and fallows of each Book I. Chap. vii. Increase of Rents. have, by the application of more labor and capital, been covered with pulse, roots, or artificial grasses, it Sect. 2. is probable that the superior productiveness of each will continue to be in about the same proportion. Farmers' All, however, that is necessary to effect a rise of rents over the surface of a country possessing soils of unequal goodness, is this: that the better soils should yield to the additional capital employed upon them in the progress of cultivation, something more than the soils confessedly inferior to them; for then while means can be found of employing fresh capital on any soil between the extremes A and Z, at the ordinary rate of profit, rents will rise on all the soils superior to that particular soil. Once more, then, the general accumulation of the capital employed in cultivation, while it augments the produce of all gradations of soils, somewhat in proportion to their original goodness, must of itself raise rents; without reference to any progressive diminution in the return to the labor and capital employed, and, indeed, quite independently of any other cause whatever. We know that a great increase in the amount of capital employed in agriculture, is observable in the progress of all improving countries, as it has taken place in our own. This cause, therefore, must necessarily have a very considerable share in producing the rise of rents, which ordinarily takes place in all countries increasing in riches and population. This might reasonably be expected: a general increase of the produce of the land, following the Chap. vii. BOOK I. application of additional capital and labor to its more perfect cultivation, seems a very natural and obvious cause of a rise of rents. Sect. 2. Increase of It has, however, been very positively denied, that rents can ever be thus increased; even in the strongest case we have put, that of an undiminished return to additional capital, and an unaltered proportion in the produce of the different soils. It has been stated, indeed, that such an undiminished return to the additional capital bestowed upon the old land is impossible from the laws of nature; and that if possible, it would effectually keep down rents that all improvements in agriculture must check their progress, and so be prejudicial to the interests of the landlords: and that nothing can raise rents but some cause which shall alter the relative fertility of the lands in cultivation. These are the well known opinions of Mr. Ricardo. That gentleman having adopted as the basis of a very complicated and ingenious system of the distribution of wealth, the single fact of a progressive and invariable diminution to the returns of agricultural labor, decided that this was the cause, and the sole cause, of every general rise of rents which could take place in the progress of nations. It became necessary, then, for him to shew that every other supposed source of increasing rents was imaginary, and among them the one we have been stating, namely, a generally increased produce, from the employment of greater quantities of capital in cultivation. Mr. Ricardo accordingly first declares: "That with every "increased portion of capital employed upon the |