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which the last twenty cannot be produced under 458, he obtains the extra five shillings on the entire 120 quarters, and not on the last twenty alone. He has thus an extra 25l. beyond the ordinary profits, and this, in a state of free competition, he will not be able to retain. He cannot however be compelled to give it up to the consumer, since a less price than 458. would be inconsistent with the production of the last twenty quarters. The price, then, will remain at 458, and the 25l. will be transferred by competition, not to the consumer but to the landlord. A rise of rent is therefore inevitably consequent on an increased demand for agricultural produce, when unaccompanied by increased facilities for its production. A truth which, after this final illustration, we may henceforth take for nted.

The new element now introduced— an increased demand for food—besides occasioning an increase of rent, still further disturbs the distribution of the

roduce between capitalists and la|. The increase of population will have diminished the reward of labour: and if its cost is diminished as greatly, as its real remuneration, profits will be increased by the full *mount. If, however, the increase of population leads to an increased production of food, which cannot be supplied but at an enhanced cost of production, the cost of labour will not be so much diminished as the real reward of it, and profits, therefore, will not be so much raised. It is even possible that they might not be raised at all. The .abourers may previously have been so well provided for, that the whole of what they now lose may be struck off from their other indulgences, and they may not, either by necessity or choice, undergo any reduction in the quantity or quality of their food. To produce the food for the increased number may be attended with such an increase of expense, that wages, though reduced in quantity, may represent as great a cost, may be the product of as much labour, as before, and the capitalist may not be at all

benefited. On this supposition the loss to the labourer is partly absorbed in the additional labour required for producing the last instalment of agricultural produce; and the remainder is of by the landlord, the only sharer who always benefits by an increase of population.

§ 2. Let us now reverse our hypothesis, and, instead of supposing capital, stationary and population advancing, let us suppose capital advancing. and population stationary; the facilities of production, both natural and o being, as before, unaltered. The real wages of labour, instead of falling, will now rise; and since the cost of production of the things consumed by the labourer is not diminished, this rise of wages implies an equivalent increase . cost ef labour, and diminution of profits. To state the same deduction in other terms; the labourers not being more numerous, and the productive power of their labour being only the same as before, there is no increase of the produce; the increase of wages, therefore, must be at the charge of the capitalists. It is not impossible that the cost of labour might be increased in even a greater ratio than its real remuneration. The improved condition of the labourers may increase the demand for food... The labourers may have been so ill off before, as not to have food enough; and may now consume more; or they may choose to expend their increased means partly or wholly in a more costly quality of food, requiring more labour and more land; wheat, for example, instead of oats or potatoes. This extension of agriculture implies, as usual, a greater cost of production and a higher price, so that {. the increase of the cost of labour arising from the increase of its reward, there will be a further increase (and an additional fall of profits) from the increased costliness of the commodities of which that reward consists. The same causes will produce a rise of rent. What the capitalists lose, above what the labourers gain, is partly transferred to the landlord, and partly swallowed up in the cost of growing food on worse land or by a less productive process.

§ 3. Having disposed of the two simple cases, an o; population and stationary capital, and an increasing capital and stationary population, we are prepared to take into consideration o mixed case, in which the two elements of expansion are combined, both population and capital increasing. # either element increases faster than the other, the case is so far assimilated with one or other of the two preceding: we shall , suppose them, therefore, to increase with equal rapidity; the test of equality being, that each labourer obtains the same commodities as before, and the same quantity of those commodities. Let us examine what will be the effect, on rent and profits, of this double progress.

Population having increased, without any falling off in the labourer's condition, there is of course a demand for more food. The arts of production being supposed stationary, this food must be produced at an increased cost. To compensate for this greater cost of the additional food, the price of agricultural produce must rise. The rise extending over the whole amount of food produced, though the increased expenses only apply to a part, there is a greatly increased extra profit, which, by competition, is transferred to the landlord. Rent will rise, both in quantity of produce and in cost; while wages, being supposed to be the same in quantity, will be greater in cost. The labourer obtaining the same amount of necessaries, money wages have risen; and as the rise is common to all branches of production, the capitalist cannot indemnify him. self by changing his employment, and the loss must be borne by profits.

It appears, then, that the tendency of an increase of capital and population is to add to rent at the expense of profits: though rent does not gain all that iii. a part being absorbed in increased expenses of production, that is, in hiring or feeding a

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greater number of labourers to obtain a given amount of agricultural produce. By profits, must of course be understood the rate of profit; for a lower rate of profit on a larger capital may yield a larger gross profit, considered absolutely, though a smaller in proportion to the entire produce. his tendency of profits to fall, is from time to time counteracted by improvements in production: whether arising from increase of knowledge, or from an increased use of the knowledge already possessed. This is the third of the three elements, the effects of which on the distribution of the produce we undertook to investigate; and the investigation will be facilitated by supposing, as in the case of the other two elements, that it operates, in the first instance, alone.

$ 4. Let us then suppose capital and population stationary, and a sudden improvement made in the arts of production; by the invention of more efficient machines, or less costly processes, or by obtaining access to cheaper commodities through foreign trade.

The improvement may either be in some of the necessaries or indulgences which enter into the habitual consumption of the labouring class; or it may be applicable only to luxuries consumed exclusively by richer people. Very few, however, of the great industrial improvements are altogether of this last description. Agricultural improvements, except such as specially relate to some of the rarer and more peculiar products, act directly upon the principal objects of the labourer's expenditure. e steam-engine, and every other invention which affords a manageable power, are applicable to all things, and of course to those consumed by the labourer. Even the power-loom and the spinning jenny, though applied to the most delicate fabrics, are available no less for the coarse cottons and woollens worn by the labouring class. All improvements in locomotion cheapen the tra of necessaries as well as of Seldom is a new branch of

without, either directly or in some indirect way, causing some of the articles which the mass of the people consume to be either produced or imported at smaller cost. o may safely be affirmed, therefore, that improvements in production generally tend to cheapen the commodities on which the wages of the labouring class are expended. In so far as the commodities affected by an improvement are those which o, labourers generally do not consume, the improvement has no effect in altering the distribution of the produce. Those particular commodities, indeed, are cheapened; being produced at less cost, they fall in value and in price, and all who consume them, whether landlords, capitalists, or skilled and privileged labourers, obtain increased means of enjoyment. The rate of profits, however, is not raised. There is a larger gross profit, reckoned in quantity of commodities. . But the capital also, if estimated in those commodities, has risen in value. The profit is the same percentage on the capital that it was before. The capitalists are not benefited as capitalists, but as consumers. The landlords and the privileged classes of labourers, if they are consumers of the same commodities, share the same benefit. The case is different with improvements which diminish the cost of production of the necessaries of life, or of commodities which enter habitually into the consumption of the great mass of labourers. . The play of the different forces being here rather complex, it is necessary to analyze it with some minuteness. As formerly observed,” there are two kinds of agricultural improvements. Some consist in a mere saving of labour, and enable a given quantity of food to be produced at less cost, but not on a smaller surface of land than before. Others enable a given extent of land to yield not only the same produce with less labour, but a greater roduce; so that if no greater produce is required, a part of the land already under culture may be dispensed with. As the part rejected will be the least * Supra, p. 113.

productive portion, the market will thenceforth be regulated by a better description of land than what was previously the worst under cultivation. To place the effect of the improve. ment in a clear light, we must suppose it to take place suddenly, so as to leave no time during its introduction, for any increase of capital or of population. Its first effect will be a fall of the value and price of agricultural produce. This is a necessary consequence of either kind of improvement, but especially of the last. An improvement of the first kind, not increasing the produce, does not dispense with any portion of the land; the margin of cultivation (as Dr. Chalmers terms it) remains where it was ; agriculture does not recede, either in extent of cultivated land, or in elaborateness of methods: and the price continues to be regulated by the same land, and by the same capital, as before... But since that land or capital, and all other land or capital which produces food, now yields its produce at smaller cost, the price of food will fall proportionally. If one-tenth of the expense of production has been saved, the price of produce will fall one-tenth. But suppose the improvement to be of the second kind; enabling the land to produce, not only the same corn with one-tenth less labour, but a tenth more corn with the same labour. Here the effect is still more decided. Cultivation can now be contracted, and the market supplied from a smaller quantity of . Even if this smaller surface of land were of the same average quality as the larger surface, the price would fall one-tenth, because the same produce would be obtained with a tenth less labour. But since the ortion of land abandoned will be the east fertile portion, the price of produce will thenceforth be regulated by a better quality of land than before In addition, therefore, to the original diminution of one-tenth in the cost of production, there will be a further diminution, corresponding with the recession of the “margin” of agriculture to land of greater fertility. ere will thus be a twofold fall of price,

Let us now examine the effect of the improvements, thus suddenly made, on the division of the produce; and in the first place, on rent. By the former of the two kinds of improvement, rent would be diminished. By the second, it would be diminished still more.

Suppose that the demand for food requires the cultivation of three qualities of land, yielding, on an equal surface, and at an equal expense, 100, 80 and 60 bushelt, ...'. The price o wheat will, on the average, be just sufficient to enable the third quality to be cultivated with the ordinary profit. The first quality therefore will yield forty and the second twenty bushels of extra profit, constituting the rent of the landlord. And first, let an improvement be made, which, without enabling more corn to be grown, enables the same corn to be grown with one-fourth less labour. The price of wheat will fall one-fourth, and 80 bushels will be sold for the price for which 60 were sold before. But the §: of the land which produces 60

ushels is still required, and the ex

penses being as much reduced as the price, that land can still be cultivated with the ordinary profit. The first and second qualities will therefore continue to yield a surplus of 40 and 20 bushels, and corn rent will remain the same as before. But corn having fallen in price one-fourth, the same corn rent is equivalent to a fourth less of money and of all other commodities. So far, therefore, as the landlord expends his income in manufactured or foreign products, he is one-fourth worse off than before. His income as landlord is reduced to three-quarters of its amount: it is only as a consumer of corn that he is as well off.

If the improvement is of the other kind, rent will fall in a still greater ratio. Suppose that the amount of produce which the market requires, can be grown not only with a fourth less labour, but on a fourth less land. If all the land already in cultivation continued to be cultivated, it would yield a produce much larger than necessary. Land, equivalent to a fourth of the produce, must now be aban

doned; and as the third quality yielded exactly one-fourth, (being 60 out of 240,) that quality will go out of cultivation. The 240 bushels can now be grown on land of the first and second qualities only; being, on the first, 100 bushels plus one-third, or 133} bushels; on the second, 80 bushels plus onethird, or 1063 bushels; together, 240. The second quality of land, instead of the third, is now the lowest, and regulates the price. Instead of 60, it is sufficient, if 1063 bushels repay the capital with the ordinary profit. The price of wheat will consequently fall, not in the ratio of 60 to 80, as in the other case, but in the ratio of 60 to 1063. Even this gives an insufficient idea of the degree in which rent will be affected. The whole produce of the second quality of land will now be required to repay the expenses of production. That land, being the worst in cultivation, will pay no rent. And the first quality will only yield the difference between 133 bushels and 1063, being 263 bushels instead of 40. The landlords collectively will have lost 33, out of 60 bushels in corn rent alone, while the value and price of what is left will have been diminished in the ratio of 60 to 1063. It thus appears, that the interest of the landlord is decidedly hostile to the sudden and general introduction of agricultural improvements. This as: sertion has been called a paradox, and made a ground for accusing its first promulgator, Ricardo, of great intellectual perverseness, to say nothing worse. I cannot discern in what the paradox consists; and the obliquity of vision seems to me to be on the side of his assailants. The opinion is only made to appear absurd by stating it unfairly. If the assertion were that a landlord is injured by the improvement of his estate, it would certainly be indefensible; but what is asserted is, that he is injured by the improvement of the estates of other people, although hit own is included. "Nobody doubts that he would gain greatly by the improvement if he could keep it to himself, and unite the two benefits, of an increased produce from his land, * Fo a8 F 2

high as before. But if the increase of roduce took place simultaneously on all ands, the price would not be as high as before; and there is nothing unreasonable in supposing that the landlords would be, not benefited, but injured. It is admitted that whatever ermanently reduces the price of proR. diminishes rent: and it is quite in accordance with common notions to suppose that if, by the increased productiveness of land, less land were reuired for cultivation, its value, like that of other articles for which the demand had diminished, would fall. I am quite willing to admit that rents have not really been lowered by the progress of agricultural improvement; but why? Because improvement has never in reality been sudden, but always slow; at no time much outstripping, and often falling far short of the growth of capital and population, which tends as much to raise rent, as the other to lower it, and which is enabled, as we shall presently see, to raise it much higher by means of the additional margin i. by improvements in agriculture. First, however, we must examine in what manner the sudden cheapening of agricultural produce would affect profits and wages. In , the beginning, money wages would probably remain the same as before, and the labourers would have the full benefit of the cheapness. They would be enabled to increase their consumption either of food or of other articles, and would receive the same cost, and a greater quantity. So far, profits would be unaffected. But the permanent remuneration of the labourers essentially depends on what we have called their habitual standard; the extent of the requirements which, as a class, they insist on satisfying before they choose to have children. If their tastes and requirements receive a durable impress from the sudden improvement in their condition, the benefit to the class will permanent. But the same cause which enables them to purchase greater comforts and indulgences with the same wages, would enable them to purchase the same amount of comforts and in

dulgences with lower wages; and a greater population may now exist, without reducing the labourers below the condition to which they are accustomed. Hitherto, this and no other has been the use which the labourers have commonly made of any increase of their means of living; they have treated it simply as convertible into food for a greater number of children. It is probable, therefore, that population would be stimulated, and that after the lapse of a generation the real wages of labour would be no higher than before the improvement: the reduction being partly brought about by a fall of money wages, and partly through the price of food, the cost of which, from the demand occasioned by the increase of population, would be increased. To the extent to which money wages fell, profits would rise; the capitalist obtaining a greater uantity of equally efficient labour by the same outlay of capital. We thus see that a diminution of the cost of living, whether arising from agricultural improvements or from the importation .# foreign produce, if the habits and requirements of the labourers are not raised, usually lowers money wages and rent, and raises the general rate of profit. What is true of improvements which cheapen the production of food, is true also of the substitution of a cheaper for a more costly variety of it. The same land yields to the same labour a much greater quantity of human nutriment in the form of maize or potatoes, than in the form of wheat. If the labourers were to give up bread, and feed only on those cheaper products, taking as their compensation not a greater quantity of other consumable commodities, but earlier marriages and larger families, the cost of labour would be much diminished, and if labour continued equally efficient, profits would rise; j}. rent would be much lowered, since food for the whole population could be raised on half or a third part of the land now sown with corn. At the same time, it being evident that land too barren to be cultivated for wheat might be made in case of neces

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