But with regard to capital actually sunk in improvements, and not requiring periodical renewal, but spent once for all in giving the land a permanent increase of productiveness, it appears to me that the return made to such capital loses altogether the character of profits, and is governed by the principles of rent. It is true that a landlord will not expend capital in improving his estate, unless he expects from the improvement an increase of income, surpassing the interest of his outlay. Prospectively, this increase of income may be regarded as profit; but when the expense has been incurred, and the improvement made, the rent of the improved land is governed by the same rules as that of the unimproved. Equally fertile land commands an equal rent, whether its fertility is natural or acquired; and I cannot think that the incomes of those who own the Bedford Level or the Lincolnshire Wolds, ought to be called profit and not rent because those lands would have been worth next to nothing unless capital had been expended on them. The owners are not capitalists, but landlords; they have parted with their capital; it is consumed, destroyed; and neither is, nor is to be, returned to them, like the capital of a farmer or manufacturer, from what it produces. In lieu of it they now have land, of a certain richness, which yields the same rent, and by the operation of the same causes, as if it had possessed from the beginning the degree of fertility which has been artificially given to it.

An American political economist of reputation, Mr. II. C. Carey,* takes away, still more completely than I have attempted to do, the distinction between these two sources of rent, by rejecting one of them altogether: he considers all rent as the effect of capital expended. In proof of this, he contends that the whole pecuniary value of all the land in any country, in England for instance, or in the United States, does not amount to anything approaching to the sum which has been laid out, or which it would even now be necessary

* Principles of Political Economy. Part the First, "Of the Laws of the Production and Distribution of Wealth."

to lay out, in order to bring the country to its present condition from a state of primæval forest. This startling statement has been seized on by M. Bastiat and others, as a means of making out a stronger case than could otherwise be made in defence of property in land.. Mr. Carey's proposition, in its most obvious meaning, is equivalent to saying, that if there were suddenly added to the lands of England an unreclaimed territory of equal natural fertility, it would not be worth the while of the inhabitants of England to reclaim it: because the profits of the operation would not be equal to the ordinary interest on the capital expended. To which assertion if any answer could be supposed to be required, it would suffice to remark, that land not of equal but of greatly inferior quality to that previously cultivated, is continually reclaimed in England, at an expense which the subsequently accruing rent is sufficient to replace completely in a small number of years.

Mr. Carey, however, does not mean exactly what his assertion, without his explanations, might seem to imply. He does not assert that the lands of all countries, taken on the average, are not worth what has been laid out in improving them, and that, to the proprietors, the improvement of land has been on the whole a miscalculation. In his estimate of the capital sunk in the land, he includes all which has been laid out in making roads and canals; that is, not in adding to the value of land already occupied, but in rendering other and rival lands accessible. Even with this correction, the proposition, in the only sense in which it supports his conclusions, is but a few degrees less unreasonable than the other. In the case supposed, of a second England, of equal natural fertility, added to the first, can any one doubt that those who were allowed to appropriate the new land, would, in proportion as it was reclaimed and brought under culture, find it answer in a pecuniary sense to make the roads requisite for bringing the produce to market? Mr. Carey would probably reply that by making these roads they might raise their own rents, but would certainly

lower those of the old territory of England. This is perfectly correct, and shows the fallacy of the test assumed by Mr. Carey. It is perhaps true that the whole land of the world would not sell for the expense of bringing it into its present state, plus the expense of making all the existing communications. The tendency of improved communications is to lower existing rents, by trenching on the monopoly of the land nearest to the places where large numbers of consumers are assembled. Roads and canals are not constructed to raise the value of the land which already supplies the markets, but (among other purposes) to cheapen the supply, by letting in the produce of other and more distant lands; and the more effectually this purpose is attained, the lower rent will be. If we could imagine that the railways and canals of the United States, instead of only cheapening communication, did their business so effectually as to annihilate cost of carriage altogether, and enable the produce of Michigan to reach the market of New York as quickly and as cheaply as the produce of Long Island-the whole value of all the land of the United States (except such as lies convenient for building) would be annihilated; or rather, the best would only sell for the expense of clearing, and the government tax of a dollar and a quarter per acre; since land in Michigan, equal to the best in the United States, may be had in unlimited abundance by that amount of outlay. But it is strange that Mr. Carey should think this fact inconsistent with the Ricardo theory of rent. Admitting all that he asserts, it is still true that as long as there is land which yields no rent, the land which does yield rent, does so in consequence of some advantage which it enjoys, in fertility or vicinity to markets, over the other; and the measure of its advantage is also the measure of its rent. And the cause of its yielding rent, is that it possesses a natural monopoly; the quantity of land, as favourably circumstanced as itself, not being sufficient to supply the market. These propositions constitute the theory of rent, laid down by Ricardo; and if they are true, I cannot

see that it signifies much whether the rent which the land yields at the present time, is greater or less than the interest of the capital which has been laid out to raise its value, together with the interest of the capital which has been laid out to lower its value.*

* In a more recent work, entitled "The Past, the Present, and the Future," Mr. Carey takes another ground of objection to the Ricardo theory of rent, namely, that in point of historical fact, the lands first brought under cultivation are not the most fertile, but the barren lands. "We find the settler invariably occupying the high and thin lands requiring little clearing and no drainage; those which can yield but a small return to labour; and as invariably travelling down the hills, and clearing and draining the lower and richer lands as population and wealth increase. . . . . When population is small, and land consequently abundant, the work of cultivation is, and always must be, commenced upon the poorer soils. With the growth of population and wealth, other soils yielding a larger return to labour are always brought into activity, with a constantly increasing return to the labour expended upon them."

It is true that the lands which require the greatest amount of clearing and draining are seldom the first cultivated: it is probably the fact, that in new countries cultivation usually begins on the hills, and descends from these to the valleys; and for this reason it may not unfrequently happen (though certainly not by any invariable law) that the richest lands remain longer unoccupied than others which are less naturally productive, even in proportion to the smaller amount of labour and outlay which their cultivation requires. Mr. Carey, however, will hardly pretend that in any old country the uncultivated lands are generally those which would pay best for cultivation. But let us even concede the point, and suppose with Mr. Carey that the progress of cultivation is upwards, from the barren to the fertile lands, not downwards, from the fertile to the barren; and that the wastes (for example) of England, Scotland, and Ireland are precisely the portions of those countries which are destined hereafter to become the most largely remunerative of the labour employed on them. This, it will be admitted, is no trifling concession; but even this would form no objection to the law of rent as laid down in the present chapter. If Dartmoor and Shap Fells are really the most fertile land in England, when they come to be cultivated they will yield the highest rent, and the lands which at that time will pay no rent will probably be the Essex Levels and the Carse of Gowrie. In whatever order the lands come into cultivation, those which when cultivated yield the least return, in proportion to the labour required for their culture, will always regulate the price of agricultural produce; and all other lands will pay a rent simply equivalent to the excess of their produce over this minimum. Whatever unguarded expressions may have been occasionally used in describing the law of rent, these two propositions are all that was ever intended by it.

If indeed Mr. Carey could show that the return to labour from the land, agricultural skill and science being supposed the same, is not a diminishing reVOL. I.-34

Mr. Carey's objection, however, has somewhat more of ingenuity than the arguments commonly met with against the theory of rent; a theorem which may be called the pons asinorum of political economy, for there are, I am inclined to think, few persons who have refused their assent to it except from not having thoroughly understood it. The loose and inaccurate way in which it is often apprehended by those who affect to refute it, is very remarkable. Many, for instance, have imputed absurdity to Mr. Ricardo's theory, because it is absurd to say that the cultivation of inferior land is the cause of rent on the superior. Mr. Ricardo does not say that it is the cultivation of inferior land, but the necessity of cultivating it, from the insufficiency of the superior land to feed a growing population; between which and the proposition imputed to him there is no less a difference than that between demand and supply. Others again allege as an objection against Ricardo, that if all land were of equal fertility, it might still yield a rent. But Ricardo says precisely the same. He says that if all lands were equally fertile, those which are nearer to their market than others, and are therefore less burthened with cost of carriage, would yield a rent equivalent to the advantage; and that the land yielding no rent would then be, not the least fertile, but the least advantageously situated, which the wants of the community required to be brought into cultivation. It is also distinctly a portion of Ricardo's doctrine, that even apart from differences of situation, the land of a country supposed to be of uniform fertility would, all of it, on a certain supposition, pay rent, namely, if the demand of the community required that it should all be cultivated, and cultivated beyond the point at which a further application of capital begins to be attended with a smaller propor

turn, he would overthrow a principle much more fundamental than any law of rent. But in this he has wholly failed. It is not pretended that this natural law applies to a very early stage in the clearing and settlement of a country; and in this stage only have Mr. Carey's objections any shadow of foundation in the real order of the facts.