2nd. That this surplus produce never arises, ex

cept by means of the necessity for employing more capital with smaller returns.

The affirmative positions may be true, though the others should be false. Surplus produce, let us assume, always constitutes rent: still rent may be paid, which does not consist of surplus produce. A necessity for employing more capital with smaller returns creates a surplus produce: nevertheless, a surplus produce may be created by other means than that necessity. These distinctions are of the highest importance; for by keeping them in mind, we shall perceive, that while the affirmative positions of the Ricardo theory are unquestionably true, the others are as certainly false.

The obvious effect of the negative positions is to extend the affirmative ones to every sort of payment for the use of land. By observing that the negations are erroneous, we shall confine the affirmations to that limit within which they are manifestly true.

Rent does not always consist of surplus produce. Land is very often required for other purposes than the raising of any commodity for sale. Land, for example, is often wanted for the purpose of enjoyment without the least view to profit; and in every country a good deal of that surplus produce which the owners of land receive as rent, they either pay themselves, or transfer to some who pay it,-to other owners of land; paying at a rate, by the acre or yard, ten, or even a thousand times greater than that at which they received. A large portion of

the aggregate rental of this country is paid by some people for permission to live near each other on spots that are preferred for residence. One landowner is said to receive about 100,000l. a-year as the ground rent of about 600 acres in a favourite part of London. Rent of this kind,-rent of which surplus produce forms no part,—and a far higher rent than was ever paid out of surplus produce derived from the cultivation of land,—is paid in and near those towns which are called watering-places. Such examples might be multiplied without end. These, however, are sufficient to show, that the first negative position of the Ricardo theory is decidedly erroneous. To what extent, then, is the first affirmative position true? Its very words would seem to show :-Surplus produce of cultivation over and above what replaces capital with ordinary profits. The doctrine then applies to that land only which is used for cultivation with a view to profit. Mr. Ricardo himself has said so, when limiting his inquiry to "payment for the natural and indestructible powers of the soil." But he has not observed his own limitation. He, and still more his followers Mr. Mill and Professor McCulloch, have drawn all kinds of rent within that narrow boundary.

That the second negative position is as untrue as the other, will appear from the cases which follow. Every occasion on which surplus produce, and therefore rent, increases without the employment of more capital for a less return, goes to disprove that position.

VOL. II.

U

1. Land is of four natural qualities; No. 4, No. 3, No. 2, and No. 1. In the actual state of agricultural skill, No. 4 will not yield a produce equal to the cost of production, and therefore remains uncultivated. No. 3 produces ten quarters, which only just replace capital with ordinary profits, and therefore yields no rent. No. 2 produces fifteen quarters, and therefore yields five quarters for rent. No. 1 produces twenty quarters, yielding ten quarters for rent. Agricultural improvements now take place, by means of which the produce of each piece of land is increased to the amount of five quarters, though the capital employed in each case remain the same. Profits remaining the same, the surplus produce of No. 1 will now be fifteen quarters; that of No. 2, ten quarters; and that of No. 3, which before yielded no surplus produce, five quarters. These improvements may permit the cultivation of No. 4, so as to obtain from it a remunerating return at the ordinary rate of profit; and so far the increase of rent for Nos. 1 and 2, and the creation of rent for No. 3, will be attended by a resort to land of inferior natural fertility. But in this case, the cause of a higher rent for Nos. 1 and 2, and of some rent for No. 3, would not be a necessity for resorting to inferior land; it would be improvements in agriculture, by means of which the gross produce of capital had been augmented, and inferior land had become fit for cultivation.

Great improvements of agricultural skill, like

those which occurred in this country about forty years ago, cause a great increase of the gross produce of agriculture. At first, perhaps, the whole of the increase is shared between capitalists and labourers, in the shape of higher profits and higher wages. Before long, however, the increase of labourers, arising from higher wages, brings wages down to the old level; and the increase of capital, arising from higher profits, brings profits down to the old level. As soon as this happens, the whole of the increase of produce, arising from improved skill, falls to the owners of land in the shape of higher rent. In this way, the rental of a country may be doubled or trebled (if the productiveness of agricultural capital be doubled or trebled by improved skill) without the least necessity for employing capital with a less return than was obtained by the least productive portion of capital before the improvement of agricultural skill. During the process, indeed, inferior land may be brought into cultivation; not, however, because of any necessity for resorting to inferior land, but because land, which formerly would not, now will yield a remunerating return. In England, since the time of Alfred, the surplus produce of agriculture, and the rent of land used for cultivation, have increased enormously. If the whole increase had been owing to a progressive necessity for resorting to inferior soils, the smallest returns to capital in the time of Alfred, would have vastly

exceeded the smallest present returns; whereas the fact is, perhaps, that the smallest returns now exceed the greatest returns in the time of Alfred, or even of Henry VIII. A chief cause, therefore, of the progress of rent in advancing countries, seems to be the progressive improvement of agricultural skill. This cause of rent is absolutely rejected by the second negative position of the Ricardo theory.

2. States of society may be conceived in which an increase of surplus produce, or rent, should take place without either a decrease or an increase of the returns to capital. This appears to have happened lately in a great part of Ireland. If the bulk of a people be brought to live upon potatoes, and in hovels and rags, and to pay, for permission so to live, all that they can produce beyond hovels, rags, and potatoes, then, in proportion as they put up with less, the owner of the land on which they live, obtains more, even though the return to capital or labour should remain unaltered. What the miserable tenants give up, the landlord gathers. This consideration seems to account for the very high rents which the landlords of Ireland obtain from their wretched tenantry. If the standard of living were raised in Ireland, without any improvement of agricultural skill, there would be less surplus produce for the landlord, and rents must inevitably sink. A fall in the standard of living amongst the cultivators of the earth is another