ON RENT, TITHES, &c. CONTAINING AN EXAMINATION OF MR. RICARDO'S THEORY OF RENT AND OF THE ARGUMENTS BROUGHT AGAINST THE CONCLUSION THAT TITHES AND TAXES ON THE LAND ARE PAID BY THE LANDLORDS, THE DOCTRINE OF THE IMPOSSIBILITY OF A GENERAL GLUT, AND OTHER PROPOSITIONS OF THE MODERN SCHOOL. WITH AN INQUIRY INTO THE COMPARATIVE CONSEQUENCES OF TAXES ON AGRICULTURAL AND MANUFACTURED PRODUCE. Being in the form of a Review of the Third Edition of Mr. Mill's Elements of Political Economy. By a Member of the University of Cambridge.' SECOND EDITION. LONDON:-1826. THE public can have no just cause of apprehension from political economy; but a great deal from bad political economy, which is in fact no political economy at all. What it is of importance therefore to promote, is the direction of the same rigid processes to this science, that have been extended to the earlier and more forward branches of human knowledge. The discoveries already made have been so striking, that the coming age is probably destined to witness as great a determination of interest to this quarter, as took place towards natural philosophy in the period which followed the discoveries of Kepler and of Newton. And in reality the subject is only another branch of the philosophy of natural phenomena, and to be pursued by the same rules as any of the others. For no reason can be given why the connexion, for example, between the demand for a given substance and the supply, should not be as legitimate an object of philosophical examination, as the connexion between two bodies at the ends of a lever, or between two substances which exercise a chemical action upon each other. If the English universities, which have always been in a great measure the depositories of knowledge in other branches of physical inquiry, have been too little sensible of the degree in which T. Perronet Thompson, Queen's Coll. VOL. XXVII. Pam. NO. LIV. U the interests of science are concerned in this class of subjects, it is only the more necessary that they should be excited to a consciousness of the reality. And if it further happens, that their particular interests are, to say the least, as much concerned as those of any other part of the community, the truth is not less the truth because the defender is injured by the error. Should they, therefore, suffer from the effects of fallacies such as men of very moderate rank among their pupils would take off if presented in the schools, they can only blame their own supineness for whatever may be the possible result. If the faulty conclusion had related to tides or to telescopes, they would have opposed it by the dissemination of a counter-version of the truth. But because it relates to a tax or a tithe, it is treated as if it had no possible connexion with "a succession of able men in church or state,” and was devoid of all relation to "sound learning and religious education." The same class of writers whose political economy is the most suspicious, have been unsparing in their invectives against academical institutions, and have at least done all in their power to provoke them to a salutary jealousy. Many of the accusers were members of the universities, who having themselves carried little away, had a certain excuse for feeling no gratitude. Others there were of a rarer sort, who declared, that after having won learning to be their bride, they had found her all barrenness;--nothing reflecting, how different is the conclusion of the public in such cases, from that which the complainant would suggest. One of the leading charges against the universities has been, that they do not turn their learning to a substantial use. There is at all events one use to which it might advantageously be turned; which is, the examination of the theories of their assailants. The object of this article is to bring the opinions of what has denominated itself "the new school of political economy," to the test of something like such an examination as is continually un dergone by every theory which makes part of the system of education in an English university. And for this purpose a work has been selected, which is the acknowledged epitome of the opi nions in question, with the latest corrections and additions. The account given of Capital would have been clearer, if it had begun with the definition. Capital, is wealth employed in the production of other wealth. After this, the elucidation of par ticular points is easy. But it is on arriving at the subject of Rent, that the disputed matter commences. Much as the assertion may move of anger or contempt, the celebrated Theory of Rent is founded on a fallacy. The easiest way of proceeding to show this, will be by giving the substance of the paragraphs that contain the argument; referring to the author quoted, or any other writer on the same side, to remove the suspicion of misrepresentation, and marking with italics the stages where the fallacy appears. Land is of different degrees of fertility. &c. Lands, of the highest fertility, do not yield the whole of what they are capable of yielding, with the same facility. &c. Till the whole of the best land is brought under cultivation, and till it has received the application of a certain quantity of capital, all the capital employed on the land is employed with an equal return. At a certain point, however, no additional capital can be employed on the same land, without a diminution of return. &c. When capital producing a lower return is applied to the land, it is applied in one of two ways. It is either applied to new land of the second degree of fertility, then for the first time brought under cultivation; or it is applied to land of the first degree of fertility, which has already received all the capital which can be applied without a diminution of return. Whether capital shall be applied to land of the second degree of fertility, or in a second dose to the land of the first degree of fertility, will depend, in each instance, on the nature and qualities of the two soils. &c. The land of the different degrees of fertility; first, or highest sort; se cond, or next highest, &c. No. 1, No. 2, No. 3, &c. 1st dose, 2d dose, 3d dose, and so on. So long as land produces nothing, it is not worth appropriating. &c. The time, however, arrives, as population, and the demand for food increase, when it is necessary either to have recourse to land of the second quality, or to apply a second dose of capital, less productively, upon land of the first quality. If a man cultivates land of the second quality, upon which a certain quan' tity of capital will produce only eight quarters of corn, while the same quantity of capital upon land of the first quality will produce ten quarters ; it will make no difference to him, whether he pay two quarters for leave to cultivate the first sort, or cultivate the second without any payment. He will therefore be content to pay two quarters for leave to cultivate the first sort; and that payment constitutes rent. Let us suppose, again, that instead of cultivating land of the second quality, it is more advisable to apply a second dose of capital to land of the first quality;-&c. The effect upon rent is thus the same in both cases. It follows that rent increases in proportion as the productive power of the capital, successively bestowed upon the land, decreases. &c. We may thus obtain a general expression for rent. In applying capital, either to lands of various degrees of fertility, or, in successive doses, to the same land, some portions of the capital so employed are attended with a greater produce, some with a less. That which yields the least, yields all that is necessary for re-imbursing and rewarding the capitalist. The capitalist will receive no more than this remuneration for any portion of capital which he employs, because the competition of others will prevent him. All that is yielded above this remuneration, the landlord will be able to appropriate. Rent, therefore, is the difference between the return made to the more productive portions, and that which is made to the least pro ductive portion, of capital, employed upon the land.-Mill, p. 29–33. The matters of fact stated in the outset are entirely and absolutely true. The fallacy lies in assuming to be the cause what in reality is only a consequence. A man of six feet in height is a foot taller than a man of five, and two feet taller than a man of four, and if it had happened that there were men of all heights down to absolutely nothing, his height would have been equal to the difference between the highest and lowest classes;-therefore men of six feet exist because there are men of smaller altitudes, and would not have existed without them. Proof spirit sells for a certain price, and more diluted spirits sell for inferior prices till they come to that which is worth no more than water; therefore the reason why proof spirit sells for a high price, is that there are weaker spirits which are selling for a lower, and if there had happened to have been no weaker spirits the proof spirit would not have sold at all. These are specimens of the kind of fallacy involved. There is precisely the same nullity of proof, that what is quite true with respect to the concomitant circumstances when they happen to exist, is therefore the essential and inseparable cause, without which the principal phenomenon could not have taken place. When it happens, or even if it always happens,-that there exist soils of various degrees of productiveness down to that which does no more than replace the expense of cultivation with the necessary profit, and that men are moreover acquainted with the art of forcing increased crops by the application of more capital, all that is stated with respect to the rent being equal to the difference between the highest and lowest returns, is as necessarily and undeniably true as any thing that has been stated with respect to proof spirit or men of six feet. But all this is no manner of evidence that these circumstances are the causes of the principal phenomenon and that it could not have existed without them, in one case more than in the others. In all the cases, this kind of conclusion is a pure fallacy, a simple non causa pro causá. On the truth or falsehood of this, depend the merits of the whole Theory of Rent and its consequences. It is easy to imagine the existence of a country in which the land should be of a uniform and high quality, and where, from the great facility of procuring crops and the consequent non-improvement of agricultural science, the cultivators should, for ages together, have no idea of the processes by which a European farmer forces an increased crop through the expenditure of an increased quantity of capital on the land. The whole of the cultivated portion of Egypt, and great part of India, present specimens of such a state of things; and yet in both these countries, a heavy rent is paid to the great landlord which is the government. If it was shown before, that the Theory of Rent is not true by virtue of the reasoning contained in it, this supplies the experimental proof that it is not true by accident either. The simple cause of rent, in such countries and every where else, is what Adam Smith described it to be long ago. It is the same that gives rise to the rent of the vineyard that produces Tokay. It is the limited quantity of the land, in comparison with the competitors for its produce; or, as it is sometimes called, the monopoly. Let the case be supposed of a small number of settlers taking possession of a large and fertile island; and let the soil be so good, and their habits of agricultural energy so limited, that a slight scratching of the ground and throwing in the seed shall be all the cultivation they ever think of bestowing, as for ages together has been a picture of the agriculture of many tropical Countries. If the land was unappropriated and every man might occupy at will, it is plain that in the commencement no man would pay another any rent. Or if instead of the land being entirely unappropriated, the right of property in it was vested in a number of owners, but who were without the means of bringing the land into immediate cultivation, it would be equally plain that the competition among these owners would in the commencement reduce the rent which any of them could obtain, to the lowest possible magnitude, which is in fact no magnitude at all. In such an establishment, the degree of each man's wealth, supposing him to possess the brief capital required for setting his industry in motion, would be in proportion to the exertions of himself or of his family. He that by his activity could raise or collect much corn, fruit, sheep, furs, or whatever else were the objects of industry within his reach, would be comparatively rich. Such manufactures as he stood in need of, he must obtain either by the uneconomical process of employing part of his own labour or that of his dependents in their production, or by paying for them with part of his agricultural produce to such artisans as in the progress of the division of labour would make their appearance. But as he would have no alternative but either to pay the artisans their price, or have recourse to the uneconomical and wasteful method of manufacturing the articles himself, the recompense of these artisans would in the commencement be exceedingly liberal, and their lives easy. They would be a comparatively idle and insolent race, working when they pleased, and almost for what they pleased; as artisans are always described to be in newly When the term monopoly is applied to land, it means a monopoly arising, not from any immediate act of the owner, but from the limited quantity of the land in comparison with the competitors for its produce. It is therefore, in one sense, an involuntary monopoly, not an arbitrary one. This distinction is sometimes of importance. |