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omy, 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 burdened with cost of carriage, would yield a rent equivalent to this 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 proportional return. It would be difficult to show that the whole land of a country can yield a rent on any other supposition.

$ 6. After this view of the nature and causes of rent, let us turn back to the subject of profits, and bring up for

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reconsideration one of the propositions laid down in the last chapter. We there stated, that the advances of the capitalist, or in other words, the expenses of production, consist solely in wages of labor ; that whatever portion of the outlay is not wages, is profit, and whatever is not profit, is wages. Rent, however, being an element which it is impossible to resolve into either profits or wages, we were obliged, for the moment, to assume that the capitalist is not required to pay rent—to give an equivalent for the use of an appropriated natural agent; and I undertook to show in the proper place, that this is an allowable supposition, and that rent does not really form any part of the expenses i pint does a of production, or of the advances of the capitalist. The really me grounds on which this assertion was made, are now appa- lovst of a rent. It is true that all tenant-farmers, and many other set, unges classes of producers, pay rent. But we have now seen, porno that whoever cultivates land, paying a rent for it, gets in " . return for his rent an instrument of superior power to other

cogntals instruments of the same kind for which no rent is paid. The superiority of the instrument is in exact proportion to the rent paid for it. If a few persons had steam-engines of the metro superior power to all others in existence, but limited by a n exact physical laws to a number short of the demand, the rent jusszert un min which a manufacturer would be willing to pay for one of limt forvet these steam-engines could not be looked upon as an addition to his outlay, because, by the use of it, he would save in his other expenses the equivalent of what it cost him; without it he could not do the same quantity of work, unless at an additional expense equal to the rent. The same thing is true of land. The real expenses of production are those incurred on the worst land, or by the capital employed in the least favorable circumstances. This land or capital pays, as we have seen, no rent. Whoever does pay rent, gets back its full value in extra advantages, and the rent which he pays does not place him in a worse posi

VOL. I.

act proportion to

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tion than, but only in the same position as, his fellowproducer who pays no rent, but whose instrument is one of inferior efficiency.

We have now completed the exposition of the laws which regulate the distribution of the produce of land, labor, and capital, as far as it is possible to discuss those laws independently of the instrumentality by which in a civilized society the distribution is effected—the machinery of Exchange and Price. The more complete elucidation and final confirmation of the laws which we have laid down, and the deduction of their most important consequences, must be preceded by an explanation of the nature and working of that machinery—a subject so extensive and complicated as to require a separate Book.

BOOK III.

EXCHANGE.

CHAPTER I.

OF VALUE.

$1. The subject on which we are now about to enter fills so important and conspicuous a position in political economy, that in the apprehension of some thinkers its boundaries confound themselves with those of the science itself. One eminent writer has proposed as a name for Political Economy, “Catallactics, or the science of ex- the se changes; by others it has been called the Science of Values. If these denominations had appeared to me logically correct, I must have placed the discussion of the elementary laws of value at the commencement of our inquiry, instead of postponing it to the Third Part; and the possibility of so long deferring it is alone a sufficient proof that this view of the nature of Political Economy is too confined. It is true that in the preceding Books we have not escaped the necessity of anticipating some small portion of the theory of Value, especially as to the value of labor and of land. It is nevertheless evident, that of the two great departments of Political Economy, the production of wealth and its distribution, vale the consideration of Value has to do with the latter alone; to di

omie.

and with that, only so far as competition, and not usage or custom, is the distributing agency. The conditions and laws of Production would be the same as they are, if the arrangements of society did not depend on Exchange, or did not admit of it. Even in the present system of industrial life, in which employments are minutely subdivided, and all concerned in production depend for their remuneration on the price of a particular commodity, exchange is not the fundamental law of the distribution of the produce, no more than roads and carriages are the essential laws of motion, but merely a part of the machinery for effecting it.

To confound these ideas, seems to me not only a logical, but a practical blunder. It is a case of the error too common in political economy, of not distinguishing between necessities arising from laws of nature, and those created by social arrangements; an error, which appears to me to be at all times producing two opposite mischiefs; on the one hand, causing political economists to class the merely temporary truths of their subject among its permanent and universal laws; and on the other, leading many persons to mistake the permanent laws of Production (such as those on which the necessity is grounded of restraining population) for temporary accidents, arising from the existing constitution of society—which those who would frame a new system of social arrangements, are at liberty to disregard.

In a state of society, however, in which the industrial system is entirely founded on purchase and sale, each individual, for the most part, living not on things in the production of which he himself bears a part, but on things obtained by a double exchange, a sale followed by a purchase, the question of Value is fundamental. Almost every speculation respecting the economical interests of a society thus constituted, implies some theory of Value; the smallest error on that subject infects with corresponding error all

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