owner of the axe for work. With the improved axe he can do three times the work that was done with that which preceded it. In the time that the former wood-chopper made six canoes, the modern one will make eighteen, and so of everything else that is to be wrought by the axe. If the capitalist, hunting through the account-books of his predecessor, observes that he doubled the quantum of his profit by means of the former improvement in axes, adopts this as a rule, and thinks himself entitled to double it again, he will take four out of the eighteen of the products of the axeman's labour, and leave him fourteen for his wages. If he is tempted to insist upon a larger proportion for the use of his capital, he is restrained by the thought, that it is easier for the labourer to get the improved axe, than it was for his father to procure the poor one: for that poor one enhanced the power of labour and diminished the value of capital. The result is that, at this stage as at the preceding, both the capitalist and the labourer obtain a reward enhanced in quantity, but the proportion of the labourer has advanced and that of the capitalist receded.

The cases we have put represent the capitalist agreeing to make a fixed payment out of the product of the capital which he entrusts to the labourer, and of the mechanical force of the latter. In so doing he runs a risk that the labourer may not exert himself to his full ability, and that the residue after payment of wages, upon which he depends for profits, may be less than he calculates. To insure himself against this contingency, he naturally seeks to bargain for less wages, than he is confident that the earnest and honest exertion of the workman's strength would enable him to pay, without impairing his expected profit. The workman, on the contrary, knowing what he can do, and unwilling to submit to any reduction, prefers to guaranty the profit which the capitalist desires, taking upon himself the risk that the product will leave a margin, broad enough to provide for the wages which the capitalist is afraid to guaranty. The contract thus becomes one of hiring capital. What we have called Profit, and what we have called Rent, are identical; the thing bear

nically and the best constructed little instrument I know; the art being that a man can fell three trees to one, compared with those that are ordinarily made in England.

ing one name or the other, according as it is stipulated or contingenta fixed, determinate profit, which the borrower agrees to pay, being denominated Rent, and a rent dependent in its amount upon good faith and the success of the enterprise, in which capital and labour have associated, being styled Profit. But the substantial fact is, that Rent or Profits, and Wages, are the complements of each other, their sum making up the advantages of an association. The same circumstances which control the proportion going to one, necessarily regulate that going to the other. It can make no difference whether the transaction assume the form of a loan or hiring of labour, or of a loan of capital. The extent to which the co-operation of natural agents, through the medium of machinery, has given labour the capacity to be effective, establishes the point on the scale of facility or cheapness at which it can obtain the ownership or the use of capital; or, what is the converse of the same truth, the dearness of the rate at which capital can obtain its use. If one capitalist will not loan his capital at a rate of compensation which will give the labourer the proportion and amount of wages, to which the increased value of labour at a given stage of progress entitles him, he can obtain it by hiring his labour to another capitalist. And in any supposed conflict of interest that may exist, he has this advantage, that the capital of no individual can take on an accession of value, without being put in combination with labour; on the contrary, some portion of its value oozes from it, by the general progress of improvement and discovery, while labour is not utterly powerless if denied its aid. The one refuses association at the loss of a realized advantage, and of an advantage in posse, the other at the loss only of the future advantage.

We have spoken of the loan of labour. The expression implies. that the labourer parts with the use of something, which is to be returned to him. What is it? The waste of muscular fibre, in producing motion, is that which he gives away. The particles of fibre that are thrown off are themselves matter, transformed by the action of the vital principle from the constituents of food, previously consumed. In the final analysis then, it is food that the labourer lends, and which is returned to him. The distinction between man and the ox, and other animals who work with him, is that they

work, and obtain barely the return of the food expended in their working, while the human labourer exacts a profit-more food than supplies his muscular waste.

Men reckon their gains by a comparison between what they previously possessed and what is added to it. The capitalist reckons his profits, not by his proportion of the product which has been won by the combination with labour, but by the ratio the increment bears to the previous stock. He says he has made so much per cent. on his capital; he rents it for so much per cent. for a year. The difference is one of arithmetical notation, not of fact. When his proportion of the product is small, it being composed of the original capital and the increment, the ratio of the latter to the capital will also be small. The fact will be expressed, according to the nature of the capital of which it is predicated, by saying that Rent, Profit, or Interest, are at a low rate. The undisputed fact, that the rate of interest constantly falls with the progress of communities in numbers and wealth, is an evidence of the tendency we have sought to demonstrate.

If we conceive the course of Nature to be reversed, so that the general mass of wealth should bear a decreasing instead of an increasing proportion to population, then it is plain that the law of distribution would be reversed also. If the number of labourers increased more rapidly than the supply of materials for them to work upon, of tools for them to work with, and of food to replace the energy which they expended, then the capitalists of each succeeding generation, would find labourers competing with each other, to offer a larger proportion of the proceeds of their labour, to escape the necessity of starving in idleness. Substituting in increasing proportion the force of human muscles for the potent agencies of Nature, by reason of the deficiency of tools, and with that muscular force decreasing with the inferiority in quantity and quality of food, their labour would constantly decrease in efficiency and productiveLabour thus becoming more costly when measured by its results, the increased proportion of the capitalist would give him a smaller absolute quantity. His power to command men would indeed grow; he would find himself the chief of a little band of barbarians, and soon endeavour, by plundering the vassals of a neighbouring

ness.

chief, to make up the leanness of his revenue. Continual strife and destruction would accelerate the common ruin; for Life is valued cheaply, where the labour of a life produces little. Disease, induced by bad food, bad clothing, and bad shelter, would rapidly thin out those who escaped the casualties of war. Population would dwindle, and society relapse into barbarism.

Social progress consists in the growth of population and capital. Both begin at zero together, and go on continually increasing. As labour becomes continually more effective, each unit of population in one generation makes a larger contribution to the stock of capital than a unit in the preceding generation. It follows that capital increases in a more rapid ratio than population. It certainly follows, unless the increasing power of man is attended with a decreasing disposition to exercise it. Such would be the case if his wants and desires were constant. But it is the characteristic of his nature, that which distinguishes him from the brute, that his desires are insatiable. The satisfaction of one creates another; and he is thus goaded by his intellectual and moral nature- the angel element in the human constitution-to ceaseless activity. The lower animals, from generation to generation, have the same uniform powers and the same wants. Nature gives them an early maturity of frame, and an instinct which makes no progress. They win from her no further powers. They are contented, and devise no machine, no art. With all the imitative faculty of the monkey, and his opportunities of seeing its great convenience to man, it is said that he has never yet learned to make a fire.

The law which regulates the distribution of the proceeds of labour, which assigns to the labourer a constantly increasing proportion, and to the capitalist a constantly diminishing one, with increased quantity to both―tending therefore to the production of equality among menwas the discovery of Mr. Carey. It was a contribution to social science, more fruitful in consequences than any made before it. It is the key to History, and enables us to understand and explain an interminable series of facts, which are incomprehensible and incredible, upon the theory of the Economists who follow Malthus and Ricardo, and, upon that of other writers, appear to be a mass of accidents, not resulting from or connected by any pervading law

84 CO-OPERATION OF NATURAL AGENTS WITH HUMAN LABOUR.

Bastiat was not extravagant when, announcing it in 1850, thirteen years after Carey, he declared, "Such is the great, admirable, consoling, and necessary law of capital. To demonstrate it, is, as it appears to me, to overwhelm with discredit the declamations, with which our ears have so long been assailed, against the avidity and tyranny of the most potent instrument of civilization and equalization, that human faculties ever produced.”

To exhibit it in its universality, the indispensable test of a genuine law, we must show that it governs capital in land. This will be more conveniently done in treating of Rent; after which we shall present historic and statistical evidence, that the course of things in the actual going-on of the world's business has been such as the law requires, and that the supposititious cases we have imagined are fair illustrations of a principle, which works unremittingly, producing its effects by slow and imperceptible gradations. Nature never acts per saltum; though to elucidate her laws we are obliged, for the sake of contrast, to place things and events in juxtaposition, that are separated by wide tracts of space and time, and thus to present a long series of effects in the aspect of a single and rapid change.