conform with absolute precision to this or any other scientific principle. We must never forget that the truths of political economy are truths only in the rough. It is not, for example, strictly true that a farmer will cultivate no land, and apply no capital, which returns less than the ordinary profits. He will expect the ordinary profits on the bulk of his capital. But when he has cast in his lot with his farm, and bartered his skill and exertions, once for all, against what the farm will yield to him, he will probably be willing to expend capital on it (for an immediate return) in any manner which will afford him a surplus profit, however small, beyond the value of the risk, and the interest which he must pay for the capital if borrowed, or can get for it elsewhere, if it is his own. But a new farmer entering on the land, would make his calculations differently, and would not commence unless he could expect the full rate of ordinary profit on all the capital which he intended embarking in the enterprise. Again, prices may range higher or lower during the currency of a lease, than was expected when the contract was made, and the land, therefore, may be over or under-rented; and even when the lease expires, the landlord may be unwilling to grant a necessary diminution of rent, and the farmer, rather than relinquish his occupation, or seek a farm elsewhere when all are occupied, may consent to go on paying too high a rent. Irregularities like these we must always expect it is impossible in political economy to obtain general theorems embracing the complications of circumstances which may affect the result in an individual case. The laws which we are enabled to lay down respecting rents, profits, wages, prices, are only true in so far as the persons concerned are free from the influence of any other motives than those arising from the general circumstances of the case, and are guided, as to those, by the ordinary mercantile estimate of profit and loss. Applying this twofold

supposition to the case of farmers and landlords, it will be true that the farmer requires the ordinary rate of profit on the whole of his capital; that whatever it returns to him beyond this, he is obliged to pay to the landlord, but will not consent to pay more; that there is a portion of capital applied to agriculture in such circumstances of productiveness as to yield only the ordinary profits; and that the difference between the produce of this, and of any other capital of similar amount, is the measure of the tribute which that other capital can and will pay, under the name of rent, to the landlord. This constitutes a law of rent, as near the truth as such a law can possibly be; though of course modified or disturbed in individual cases, by pending contracts, individual miscalculations, the influence of habit, and even the particular feelings and dispositions of the persons concerned.

rent.

§ 5. A remark is often made, which must not here be omitted, although, I think, more importance has been attached to it than it merits. Under the name of rent, many payments are commonly included, which are not a remuneration for the original powers of the land itself, but for capital expended on it. The additional rent which land yields in consequence of this outlay of capital, should, in the opinion of some writers, be regarded as profit, not But before this can be admitted, a distinction must be made. The annual payment by a tenant almost always includes a consideration for the use of the buildings on the farm; not only barns, stables, and other outhouses, but a house to live in, not to speak of fences and the like. The landlord will ask, and the tenant give, for these, whatever is considered sufficient to yield the ordinary profit, or rather (risk and trouble being here out of the question) the ordinary interest on the value of the buildings; that is, on what it has cost to erect them, or rather, on what it would

now cost to erect others as good; the tenant being bound,
in addition, to leave them in as good repair as he found
them, for otherwise a much larger payment than simple
interest would of course be required from him. These
buildings are as distinct a thing from the farm, as the stock
or the timber on it; and what is paid for them can no more
be called rent of land, than a payment for cattle would be,
if it were the custom that the landlord should stock the
farm for the tenant. The buildings, like the cattle, are not
land, but capital, regularly consumed and reproduced; and
all payments made in consideration for them are properly al

interest.

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 merit, Mr. H. 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 to lay out, in order to bring the country to its present condition, from a state of primeval forest. This assertion at first sight presents itself as a most startling paradox, seeming to imply 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 on the whole been a miscalculation. But, on examining Mr. Carey's data, it appears that he by no means asserts this. 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. Making up the account on this principle, the result brought out by Mr. Carey is perhaps correct, and if it is not, easily might be so. 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

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

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 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. cause of its yielding rent is, that it possesses a natural monopoly; the quantity of land, as favorably 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. This seems to me an altogether unimportant question.

And the

Mr. Carey's objection, however, has at least thought and originality, and in that respect differs from the arguments commonly met with against the theory of rent; a theorem which may be called the pons asinorum of political econ