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 True Theory of Rent. 
 
 TH K public can have no just cause of apprehension from 
 political economy; but a great deal from bad political eco- 
 nomy, 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 know- 
 ledge. The discoveries already made in it have been so 
 striking 1 , 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 the interests of science are concerned in this class of 
 subjects, it is only the more necessary that they should be ex- 
 cited to a consciousness of the reality. And if it further hap- 
 pens, that their particular interests are concerned as well as 
 those of other parts of the community, the truth is not less the 
 truth because the defenders are to be 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 
 
 B 
 
 THE LIBKAKY 
 UNIVERSITY OF C 
 
 LOS ANGELES
 
 2 True Theory 
 
 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 doubtful, 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 them- 
 selves 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 
 undergone by every theory which makes part of the system 
 of education in an English university. And for this pur- 
 pose a work has been selected, which is the acknowledged 
 epitome of the opinions 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 general defi- 
 nition, the elucidation of particular points presents no diffi- 
 culty. 
 
 But it is on arriving at the subject of Rent, that the disputed 
 matter commences. However much 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 ar- 
 gument ; 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 upon the land is employed with an equal return. At 
 a certain point, however, no additional capital can be employed upon 
 the same land, without a diminution of return. &c. 
 
 When capital producing a lower return is applied to the land, it is
 
 of Rent. 3 
 
 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 culti- 
 vation ; 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 di- 
 minution of return. 
 
 Whether capital shall be applied to land of the second degree of fer- 
 tility, or in a second dose to the land of the first degree of fertility, will 
 depend, in each instance, upon the nature and qualities of the two 
 soils. &c. 
 
 The land of the different degrees of fertility ; first, or highest sort ; 
 second, 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. 
 
 During this time, land, speaking correctly, yields no rent. &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 
 quantity 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 consti- 
 tutes 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 fur rent. In applying capi- 
 tal, either to lands of various degrees of fertility, or, in successive doses, 
 to the same land, some portions of the capital so employed are at- 
 tended 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 diffe- 
 rence between the return made to the more productive portions, and that 
 which is made to the least productive portion, of capital, employed upon 
 the land: Mill, p. 2933. 
 
 In this account, 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 
 
 B 2
 
 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 in- 
 volved. There is precisely the same nullity of proof, that 
 what is quite true with respect to the concomitant circum- 
 stances 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 unde- 
 niably 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 prin- 
 cipal phenomenon and that it could not have existed with- 
 out 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 causa. On the truth or falsehood of this, hang the 
 merits of the whole of what is called the Ricardo Theory of 
 Rent, and the consequences which depend upon it. 
 
 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 expen- 
 diture of an increased quantity of capital upon 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 con- 
 tained 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 in reality nothing but what Adam Smith pointed out 
 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
 
 of Rent. 5 
 
 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 at first 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 im- 
 mediate cultivation, it would be equally plain that the 
 competition among these owners would in the commence- 
 ment 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 appear- 
 ance. But as he would have no alternative but either to 
 pay the artisans their price, or have recourse to the uneco- 
 nomical 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 
 peopled agricultural countries. But when population and 
 cultivation had increased so as to begin to press against 
 
 * When the terra monopoly is thus applied to land, it does not ne- 
 cessarily mean a monopoly arising from any immediate act of the 
 owner ; for a monopoly, in the sense here meant, will arise to a certain 
 extent under any system that can be imagined. There must always be 
 a monopoly of the best land, and the nearest land, and that which is 
 most favourably situated for the consumption of its produce ; and this 
 monopoly must cause such land to yield a rent.
 
 6 True Theory 
 
 the limits of the soil contained in the whole island, and 
 there was no longer new land to be had for asking, a very 
 different scene would begin to arise. All the population 
 which was not employed in agricultural labour, or supported 
 without labour upon some kind of previous accumulation, 
 must apply itself to manufacturing- industry. And as the 
 number of persons so employed increased, a competition 
 would arise among them for the products of agriculture upon 
 which they must live ; and this competition would oblige them 
 to give a greater portion of the results of their own labour, 
 in return for a smaller and less luxurious quantity of agricul- 
 tural produce than they had been accustomed to receive. It 
 is true that the land must finally find food for all that live 
 on it, as the vineyard finds wine for all that finally drink 
 Tokay ; but it does not therefore follow, that many of those 
 who live on it may not, when their numbers have increased, 
 live much less abundantly than they used to do, and give a 
 much greater quantity of the results of their own labour in 
 return for a given quantity of the produce. Tt is proved by 
 the experience of all countries, that moderately good land is 
 capable of producing food for many times the number of 
 hands required for its cultivation ; so that ail these numbers 
 maybe called into being, to assist in the demand. Hence if the 
 exchange of commodities was conducted by the intervention 
 of a circulating medium, the money price of agricultural 
 produce must rise in comparison with the money prices of 
 other commodities. Whether this comparative rise would 
 take place by an increase in the money price of corn, or by a 
 diminution in the money prices of other commodities, or by 
 both these processes at once, would depend on the manner 
 and degree in which the community had the opportunity of 
 supplying itself with the metals employed in coins, or on 
 other circumstances connected with the principles of Currency. 
 But in whatever manner it took place, its effects would be 
 virtually the same ; so that it is sufficient to consider the case 
 where the whole alteration is supposed to take place in the 
 money price of agricultural produce. The land-owners, then, 
 would begin to get rich, through the simple fact of their 
 being the land-owners and there being no more land to own. 
 If it should be found some day that a contiguous island had 
 sprung up of the same nature with the first, their prospect of 
 increased wealth would drop at once ; and every thing would go 
 on as it did at the commencement, till the new island had been 
 cultivated and peopled like the other. But if this does not hap- 
 pen, the lucky land-owners will incontinently begin to swell into 
 men of landed wealth. If they keep their land in their own 
 hands, they will rise into what are termed gentlemen-farmers,
 
 of Rent. 7 
 
 or men who unite in their own persons the characters of land- 
 lord and cultivator. But as soon as what they obtain by the 
 sale of their produce, is sufficiently greater than the amount 
 for which they can hire one of their less fortunate neigh- 
 bours, who is heir to his own industry and no land be- 
 side, the greater part of them will hire a farming-man or 
 overseer with part of the produce, and sit down in the enjoy- 
 ment of the otium cum dignitate of landed gentlemen with 
 the remainder. And from this step of the farming-man, they 
 will soon proceed to the further one, of finding a farming-man 
 who will advance his own capital, making an adequate deduc- 
 tion out of the produce in return, or in other words a 
 farmer or tenant. The reason of this further step will be, 
 their desire to get more completely rid of the trouble of su- 
 perintending the employment of the capital ; for a tenant has 
 his own interest at stake in watching it with the utmost exact- 
 ness, while a farming-man, having no such interest, must 
 still be superintended in a considerable degree. And all the 
 residuum left after delivering to the tenant the portion of the 
 proceeds which the competition among individuals of his class 
 obliges him to accept, will be rent*. And what the tenant 
 will be obliged to accept, will be such a part of the price of 
 the produce, as will return him the capital he must lay out, 
 with the lowest rate of profit for which men under the existing 
 habits of the society will consent to layout farming capital and 
 superintend its employment. But of the existence of this 
 residuum, the primary cause is manifestly the increased price 
 of corn. As it has been accurately expressed by Mr. Ri- 
 cardo, ' Rent will be paid because corn sells high ; and not 
 corn sell high because rent is paidf.' 
 
 If it should be objected, that a rise in the money price 
 of corn must create a rise in the money prices of other 
 commodities, the answer is, that this is as far from follow- 
 ing, as that a rise in the price of corn must create a rise 
 in wages, at a time when the fact avowedly is, that the in- 
 
 * When the term residuum is employed in the sequel, it invariably 
 means all that is left after satisfying the tenant ; out of which it is evi- 
 dent that rent, taxed, and every thing else must come. 
 
 This residuum is often loosely called rent, in cases which demand a 
 clearer term. There are in fact two popular meanings of the word rent ; 
 one, the total residuum here mentioned ; and the other, the share finally 
 left for the landlord, which will be called for distinction rent to the 
 landlord. 
 
 In making this distinction nothing is done towards prejudging the 
 question of whether the residuum may not rise with taxation, so as to 
 leave the landlord's share the same as before ; which is in fact the prin- 
 cipal question at issue. 
 
 f Principles of Political Economy and Taxation, by David Ricardo, 
 Esq. p. 62.
 
 8 True Theory 
 
 crease of competition among the labourers is such as t o oblig 
 them to accept a diminished recompense. The cases are in 
 reality alike. 
 
 In all this there is no occasion for a word about different 
 qualities of land or doses of capital. The abstract case is 
 what is to be settled first ; and then the accidents are to be 
 taken into the account, till the whole is brought to the case 
 presented in nature. This is the way men proceed to rea- 
 son in other instances ; and must needs be the way in this. 
 To say that the abstract case is not the practical one, would 
 be the argument of a man who had never contemplated such 
 a process as analysis. All complex cases are solved by 
 dividing them into abstract ones ; and almost all the cases 
 of nature are complex. 
 
 If it happens that in the island supposed there are lands 
 of every variety of downward quality, then as population, 
 competition for food, and prices increase, men will he en- 
 abled and induced to take lower and lower qualities of land 
 successively into cultivation, stopping always at the quality 
 where the produce will do no more than repay them the expenses 
 with the lowest profit for which they will consent to lay out 
 capital and superintend its employment. At the same time 
 the value of the produce on all the superior lands will in- 
 crease ; and since all the difference between the actual pro- 
 ceeds and what allows that lowest profit, will be taken for rent 
 at the first moment when the land-owner is able to avail him- 
 self of the competition which is in his favour, the rent, on all 
 the qualities of land above the lowest, will increase also. 
 The quantum of inferiority with which new lands can be 
 brought into cultivation, will be determined by the rise in the 
 price of produce, which is what makes their cultivation practi- 
 cable. The increased quantity of produce brought into ex- 
 istence by the cultivation of this new land, will create a certain 
 degree of reaction upon the price of produce, and consequently 
 upon the quantity of new land finally brought into cultiva- 
 tion ; but a reaction of this kind can never go the whole 
 length of reducing the price to its original magnitude. 
 For if it reduced it to this point, the quantity of cultivated 
 land and of produce would be reduced to their original mag- 
 nitudes also. But a reaction cannot be created by an increase 
 of produce that is nothing. Hence if there is to be any 
 reaction at all, there must be some increase of produce to 
 make it, and some increase of price to cause that increase 
 of produce. The price therefore must finally be raised, in 
 spite of the reaction. And it wil! not only be raised, but 
 since the magnitude of the reaction altogether, must depend 
 on the magnitude of the increase of produce compared with 
 the magnitude of the whole produce that existed before,
 
 of Rent. 9 
 
 in all* the cases which occur in practice, the effect of the 
 reaction will be comparatively small. But in all this, it is the 
 rise in the price of produce (of which a rise in rent is a ne- 
 cessary concomitant), that enables and causes inferior land 
 to be brought, into cultivation ; and not the cultivation 
 of inferior land that causes the rise of rent. It is sur- 
 prising that the author formerly quoted should have discerned 
 so accurately the fallacy of supposing that corn sells high be- 
 cause rent is paid, instead of that rent is paid because corn 
 sells high, and should not have observed the kindred fal- 
 lacy contained in the inversion of the proposition given in ita- 
 lics above. 
 
 In the same manner, if it happens that the supposed cul- 
 tivators possess sufficient habits of observation to discover 
 methods of obtaining a greater crop by means of a greater 
 outlay and greater exertion, every increase of price will en- 
 able and encourage them to make improvements in their 
 mode of cultivating any given quality of soil. The oper- 
 ation of an increase in the price of produce in causing a 
 greater outlay to be made upon the land, and ihe mode in 
 which the proceeds will be divided between the landlord and 
 the tenant, may easily be traced. Let the case be supposed 
 of a land owner who unites the characters of landlord and 
 cultivator ; and let the lowest rate of profit for which he and 
 other cultivators are willing to advance capital and superin- 
 tend its employment, be ten per cent per annum*. And let 
 the amount of what he annually lays out on the land be 1000/. 
 and the final value of the produce 1200/. Now the reason why 
 this cultivator does not lay out annually on the land a greater 
 sum than 1000/., as for instance 10LO/., is because he 
 knows, either by actual experiment or by that tact which 
 enables him to do without it, that the final value of the whole 
 produce would be increased by less than 117., which is the 
 lowest return for which he is willing to advance the additional 
 10/. And if he was to add a second 10/., he knows, it may 
 be, that it would be returned with no profit at all ; and that 
 to add a third would cause him a loss ; so that no man in his 
 senses would do either. The reason why he does not lay 
 out a smaller sum than 1000/., as for instance 990/., is be- 
 
 * This lowest rate of profit must always be something ; for nobody 
 will incur the risk and trouble of employing capital for nothing. And 
 in countries where a certain rate of interest can be had from safe 
 borrowers, consisting either of private persons or the government, this 
 fact is at once a proof that in those countries men in general do not 
 employ capital without a profit greater than such interest, and a reason 
 why no individual of ordinary understanding will ever designedly do 
 so. For sooner than do so, individuals would lend their money or 
 bystock, and receive the returns without risk or trouble.
 
 10 True Theory 
 
 cause he knows that the final value of the produce would be 
 diminished by more than 11 /. and that consequently he should 
 lose an opportunity of employing 10/. with what he considers 
 as a fair profit. And for the same reasons that this cultivator 
 will lay out exactly 1000/. upon the land, any other man de- 
 sirous of laying out agricultural capital for a profit of 10 per 
 cent per annum will agree to do the same. The land- owner 
 therefore may, if he pleases, find a man who will engage to 
 lay out 1000/. per annum on the land on condition of receiving 
 11 001. out of the proceeds, or in other words pay 100/. a 
 year out of the produce as rent. If he was to offer it for a 
 less rent than this, the farmer would only put the difference 
 into his pocket and not increase the outlay on the land. If he 
 was to demand a greater rent, he could not get it ; because 
 it would not leave the cultivator the rate of profit which, by 
 the supposition, is the lowest for which cultivators will advance 
 capital and superintend its employment, or in other words, 
 because the farmer could not live. Hence if the land-ownercon- 
 tinues to keep the land in his own hands, he may with propriety 
 consider 100/. per annum as what he makes by being his own 
 farmer, and 100/. per annum as what he receives by virtue of 
 bis good fortune in being landlord. Or the annual gain of 
 200/. may be considered as dividing itself into two parts, of 
 which 100/. is of the nature of profits of stock, and 100/. of 
 the nature of rent. To find now the effects of an increase in 
 the price of produce, let it be supposed that the annual 
 produce of the land is 600 quarters, corn being at 40s. per 
 quarter ; and that the addition of 10/. to the present annual 
 outlay of 1000/., instead of effecting an increase of five quar- 
 ters and a half in the annual produce, which is what would be 
 required in order to bring in ll/., will only effect an increase 
 of five quarters. In this case it is evident that an increase in 
 the price of corn of four shillings per quarter, would cause 
 the five quarters to fetch ll/., and make it worth while for the 
 cultivator to add the 10/. to the outlay ; and it would be added 
 accordingly. But at the same time that the annual produce 
 of the estate was thus increased by five quarters, and the part 
 of the final gain which resolves itself into the profits of stock 
 was increased from 100/. to 101/. the price of the ether GOO 
 quarters would be increased by 120/. which would be rent, 
 and make the whole rent 220/. And if the addition of a 
 further or second 10/. to the annual outlay would produce 
 four more quarters, then to make it worth while to add 
 this second 10/. to the outlay, the price of four quarters 
 must rise to ll/., or the quarter to 55*. ; which would 
 increase the portion that resolves itself into profits of stock to 
 102/., and make the rent rise again by 332/. 15s. or the whole 
 rent be 552/. 15*. It is true that while all this was going
 
 of Rent. 11 
 
 on, a certain degree of reaction would from time to time 
 take place on the price of corn, in consequence of the increase 
 of produce created by the operations of this and other culti- 
 vators. But as was shown before, the reaction cannot go 
 the length of restoring the price of corn to what it was ori- 
 ginally ; and when it is said that corn rises by four shillings 
 or any other sum, this includes all reactions, and consequently 
 no correction for reaction is required. And the sums thus 
 stated to be of the nature of rent, are what the land-owner, if 
 he chuses to let his land, would in the long run be able to ob- 
 tain in the several circumstances described. If the landlord 
 mismanages his own affairs, if he hampers himself with leases 
 which prevent him from taking a fair advantage from time to 
 time of the competition among the farmers, or if he finds 
 it impracticable in the nature of things, to regulate a contract 
 of the description concerned, with incessant and inviolable ac- 
 curacy, these are not the defects of the theory, but of the 
 execution. This distinction is of the greater importance, be- 
 cause many of the difficulties which arise on the subject of 
 rent, proceed from confounding the irregularities in its receipt 
 which spring out of the absence of an incessantly active system 
 of operation on each other on the parts of the landlord and 
 tenant, with the amount which will be received in the long run 
 and upon the whole, and to which all the contracts between 
 landlord and tenant will tend as to a mean. 
 
 It may be collected, therefore, that the effect of every suc- 
 cessive increase of price will be, in the first place, to make 
 rent rise every where by the amount of the increase of price 
 upon the previous produce, as fast as the landlords have the 
 opportunity of adjusting their agreements with their tenants. 
 And in the next place, the effect will be to bring a certain belt 
 of new land into cultivation, provided there happens to exist 
 land so circumstanced in point of quality as to Be capable of 
 being brought into cultivation with profit by the supposed 
 increase of price ; and to cause a certain augmentation of 
 outlay on all the other lands in cultivation, provided the cul- 
 tivators are acquainted with the method of forcing a greater 
 crop by a greater outlay. And the consequences of these two 
 operations, if they take place, will be a certain increase of pro- 
 duce, and a certain reaction on the price of produce in the 
 way of keeping it down, which must however fall far short of 
 keeping it down to its original state. In the same manner 
 every successive diminution of price will cause all the contrary 
 results. The most marked consequence will be to make rent 
 fall every where by the amount of the decrease of price upon 
 the final produce ; which will take place as fast as the tenants 
 have the opportunity of adjusting their agreements with the 
 landlords. And besides this, a certain belt of land will be
 
 12 True Theory 
 
 thrown out of cultivation, and a certain diminution of outlay 
 be made on other lands; under the provisoes stated in the other 
 case. And the consequence of these two operations, if they 
 take place, will be a certain diminution of produce, and a 
 certain reaction on the price of produce in the way of keeping 
 it up, which must however fall far short of keeping it up to its 
 original height. 
 
 The effects of agricultural improvements may be traced in 
 a similar manner. The improvement may either be one which 
 makes a saving in some part of the expense of bringing the 
 produce to market, as for instance a threshing-machine ; or it 
 may be one which requires an increased outlay upon the land 
 but returns an increased quantity of produce, as for instance 
 drill husbandry. And first, of the first kind. Suppose then 
 the same case as before ; corn being at 40s. In these cir- 
 cumstances, the diminution in the expense of threshing ne- 
 cessary to cause the five additional quarters to be produced 
 by the cultivator, would be such as would make the price re- 
 ceived for these five quarters afford a profit of 10 per cent. 
 As an approximation, therefore, it may be stated, that the 
 threshing-machine, after every fair allowance for its cost, must 
 reduce the expense of bringing five quarters to market, from 
 107. to ten elevenths of 10/., or 9/. Is. lOrf., or effect u 
 saving in threshing corn, of 3s. 7kd. per quarter. But a cor- 
 rection must be applied for the reaction effected from time to 
 time on the price of corn by the appearance of the additional 
 quantity created by the operations of this and other cultivators 
 in consequence of the invention of threshing-machines. For 
 example, the fact might turn out to be, that instead of a saving 
 of 3s. 7%d. per quarter producing the effect described, a saving 
 of 3s. 11 fd. might be finally required to do it, in consequence 
 of corn contemporaneously falling from 40s. to 39s. Sd. through 
 the reaction on the price*. If this diminution of expense 
 should be effected by threshing-machines, such an outlay 
 
 * If there was no reaction on the price of corn, the saving of 3s. 7%d. 
 per quarter would cause on the estate in question an increase of produce 
 of ahundred-and-twentiethpart. Jf this estate may be taken as a sample 
 of the average quality of estates throughout the country, a huudred-and- 
 twentieth may be assumed as the average increase of produce effected by 
 threshing-machines; but if not, then some other fraction must be as- 
 sumed. Suppose then, that the average increase is a hundred-and- 
 twentieth. This increase, being comparatively small, will have an effect 
 on the price of corn at all events not very remote from diminishing it 
 in the contrary proportion, or reducing it from 40*. to 39*. 3d. But if 
 the price would fall by 4d., a saving of 3*. 7d will be too little ; and 
 the saving, to produce the effect described, must be more nearly one- 
 eleventh of 39*. Sd. and fourpence more, or 3*. 1 \\d. If instead of 4d. 
 the price would fall by 2d. or by 8d., it would only make an alteration 
 of nearly coincident amount in the magnitude of the saving required.
 
 of Rent. 13 
 
 would be made on the land as would cause the additional five 
 quarters to be produced. But at the same time that these 
 five quarters were being produced by an annual outlay of 
 97. Os. Q$d., the annual outlay necessary to bring the other 
 600 quarters to market would be reduced from 1000/. to 
 8817. 17*. 6d. ; making the whole final outlay 8907. 17*. 9^., 
 and the final receipts, at 39*. Sd. per quarter, 11997. 18*. 4rf, 
 But the portion of these receipts which is necessary to replace 
 8907. 17*. 9ld. with a profit of 10 per cent, is 9797. 19*. 7d. 
 A tenant may therefore be found who will agree to lay out 
 8907. 17*. 9|c?. on condition of retaining 9797. 19*. Id. out 
 of the proceeds, and pay the residuum as rent. Hence if the 
 land-owner chuses to let his estate, 2197. 18*. 9d. is what, 
 under the new dynasty of threshing-machines, he may obtain 
 for rent. 
 
 If the improvement was of the second kind, and if it de- 
 manded, for example, on the estate .supposed, an additional 
 outlay of 1007. per annum, the first thing which maybe 
 remarked is, that it would not take place at all unless the 
 addition made by it to the value of the produce would be 
 at least 1107. per annum. If the addition was exactly this, 
 then the rent would remain unaltered, and the amount of the 
 farmer's yearly profits would be increased by 107. But if it 
 was more, as for instance 1257. per annum, then 15/. would 
 be added to the annual rent as soon as the landlord had the 
 opportunity of appealing to the competition in his favour, 
 and the amount of the farmer's yearly profits would be in- 
 creased by the other 107. as before. In other words, the 
 whole of the gain would be added to the rent, except the por- 
 tion required to pay the necessary profits of the tenant on the 
 additional outlay. If the use of the improved method induces 
 any further changes in the addition that can be made to the 
 outlay so as to be returned with a living profit on the sum 
 added, they must be accounted for separately. As the direct 
 effect of this species of improvement is to create an increase 
 in the produce, its tendency is to create a comparatively great 
 reaction on the price of corn. No correction however is 
 required on this account; because when the addition to the 
 value of the produce is supposed to be 1107. or any other 
 sum, this includes all reactions. 
 
 The effect, then, of all agricultural improvements is to in- 
 crease the quantity of produce and lower its price ; but im- 
 provements which consist in a saving of expense, do this in a 
 much less degree than those which require an augmented 
 outlay. Improvements of the first kind diminish the quantity 
 of capital demanded from the tenant, and consequently the 
 final amount of the profits that will be left him ; improve-
 
 14 True Theory 
 
 ments of the latter kind increase them. In improvements of 
 the first kind, the landlord finally obtains the whole of the 
 gjiin, and a part of what used to be the profits of the tenant 
 besides. In those of the latter kind, he obtains only that 
 part of the gain which is left after paying the increased amount 
 of profits of the tenant. An improvement of this last kind is 
 always advantageous to the tenant ; and, except in the low- 
 est class of cases where nothing is left after paying the neces- 
 sary profits of the tenant, to the landlord also. An im- 
 provement of the other kind is always very advantageous to 
 the landlord ; but it is against the tenant, in the same way as 
 a diminution in the quantity of capital that can be employed 
 with a profit is against any other dealer; in the same 
 wav, for example, as the introduction of cabriolets with one 
 horse is against the interest of the dealers who have been ac- 
 customed to convey single passengers in coaches with two. In 
 the instance of cabriolets, it is possible that the difference 
 may be made up to the dealers, by the increased number 
 of persons who are induced to ride. But this is not the case 
 with the tenants ; because their profits on the additional 
 quarters produced, are not equal to the diminution of profits 
 arising out of the diminution of capital employed on the re- 
 mainder. 
 
 The phenomena here described as attendant on the rent of 
 land in general, will be found to correspond with those which 
 attend on the rent of the vineyard that produces Tokay ; and 
 great clearness will result from attention to the magnified case. 
 More particularly light is thrown on the cause of the principal 
 phenomenon, which is the permanence of the excess of the 
 price of the aggregate produce, above the cost of its produc- 
 tion. The outlay stops at the point where the last addition 
 to it only creates such an addition to the whole produce, as 
 returns the sum added to the outlay with a living profit on 
 itself; but the nature and constitution of the soil are such, 
 that this does not carry the produce to any thing like what 
 will reduce the price of the whole, to what returns the whole 
 outlay with only a living profit. The last 10/. added to the 
 outlay increases the whole proceeds by no more than, it may 
 be, ll/., and another 10/. would increase it by less; and 
 therefore the outlay stops. But this does not prevent the 
 fact that the produce of the whole outlay, or the aggregate pro- 
 duce, may be selling for five or six times the aggregate cost 
 of its production, or for any other amount. 
 
 Perhaps the subject may be made clearer, by considering 
 what the case would have been, if no addition to the outlay 
 would have increased the produce of the vineyard at all. 
 There is no natural impossibility in such having been the
 
 of Rent. 15 
 
 fact ; and simple ignorance on the part of the cultivators 
 would amount in practice to the same thing. In such cir- 
 cumstances, there would be no addition to the outlay above 
 that of an ordinary vineyard ; and yet the aggregate produce 
 would he selling for five or six times the cost of its production. 
 The outlav, for example, might be 10007. ; but the produce, 
 instead of selling for 12007. or 13007., might sell for 60007. 
 Suppose now, that instead of the case being exactly thus, an 
 addition of 107. could be made to the outlay, with the effect 
 of creating an addition to the value of the whole produce, 
 amounting to 117. or whatever else is considered as 107. with 
 the lowest living profit. The 107. would be added accord- 
 ingly ; but the result would still be, that an outlay of 10107. 
 produced a return of 60117. And it is because the nature 
 and constitution of the soil are such that no more than 107. 
 can be added to the outlay so as to be returned with a living 
 profit on the sum added, that the whole outlay never over- 
 takes the whole price, or reduces it to the cost of the whole 
 production. If, for example, a second 10/. was added, the 
 constitution of the soil is such that the increase effected in 
 the produce would be worth, it may be, Wl. ; which is no 
 profit at all. And if a third 107. was added, the increase in 
 the produce might be only worth 9/. ; which is a loss of I/. 
 But no man in his senses, when by laying out 10107. he can 
 obtain 60117., will lay out 10207. to obtain 60217. ; still less 
 1030/. to obtain 60307. The competition for the produce causes 
 high price ; but the high price does not increase the outlay, 
 to any thing like what creates an increase of produce sufficient 
 to reduce the price of the whole to the cost of production ; 
 and the reason why it does not, is to be found in that consti- 
 tution of things, by which the quantity of produce increases 
 more slowly than the quantity of outlay or labour applied. 
 All these conclusions may be rigidly transferred to corn. 
 
 If it is urged that the land which produces Tokay presents 
 the case of a vineyard possessing extraordinary properties in 
 comparison of other vineyards, and that there is nothing 
 analogous to this in the case of corn, and therefore the cases 
 are not alike; the answer is, that if all the other vineyards 
 were to lose the faculty of producing wine, the price of Tokay 
 would only be increased ; and the land that produces Tokay 
 would then be in the same circumstances with respect to wine, 
 that the corn land of any country where the quantity is limited 
 in comparison with the demand, is in with respect to corn. 
 
 On returning to the passages extracted in pages 2 and 3, 
 it will be seen that the first inaccuracy occurs at the words 
 ' when it is necessary ;' the truth being, that land of inferior 
 quality is not taken into cultivation because it is necessary, 
 but because it is profitable. The necessity might exist long
 
 16 True Theory 
 
 enough, if it did not make itself intelligible to the cultivator 
 through his purse. And the inaccuracy is of importance, be- 
 cause'it holds of the great aboriginal fallacy of the Theory of 
 Rent. But the inference ou which that fallacy is directly 
 built in the passages quoted, is first intimated in the words 
 and that payment constitutes rent.' The payment described 
 is rent; but that does not prove that rent is this and nothing 
 else. It no more proves it, than because turtle is man's 
 food, it is proved that man's food is turtle, and where there is no 
 turtle there will be no food. A ploughman puts his chil- 
 dren on their guard against this sophism, by the homely illus- 
 tration, that ' a mare is a horse, but a horse is not a mare.' If 
 he was a logician according to forms, he would tell them that 
 one is the inclusum, the other the includens, and that these are 
 not interconvertible terms. This may be all very abstruse 
 and metaphysical; but ploughmen laugh at those who do not 
 practically comprehend it. The fallacy looks out again more 
 confidently in the words ' It follows that' &c ; and in the next 
 paragraph it is embodied into ' a general expression,' where 
 rent is stated to be the difference between the greatest and least 
 returns, instead of staling that the difference between the re- 
 turns, when circumstances happen to be such that there 
 exists a difference of returns at all, is equal to the rent. In 
 which the deceptive process consists, as in the instance of 
 the turtle, in first stating a proposition which is true, and 
 then substituting the inverse of the proposition, which is not 
 true. And the mode in which the substitution is effected, is 
 an instance of the figure called ' encroachment;' which con- 
 sists in introducing a fallacy gently at first, and repeating it 
 over and over in bolder terms, as the mind becomes familiarized 
 with its appearance. 
 
 If it is urged that both the present writer and Mr. Ricardo 
 from whom his theory is derived, have distinctly represented 
 the cultivation of the inferior soils as flowing from the appro- 
 priation of land and the limitation of its quantity, and that to 
 affirm that rent proceeds from the secondary cause is tanta- 
 mount to affirming that it proceeds from the first; the an- 
 swer is, that it is one thing to affirm that the competition is 
 the simple cause of rent in all cases, and would equally cause 
 it if no difference in the qualities of soils and no knowledge 
 of the art of forcing crops were in existence, and another 
 thing to affirm, that it causes rent through the intervention of 
 these circumstances, and would not cause rent without them. 
 
 [To this the reply has been, that the difference is ' only in 
 the expression', and that 'there is none in the principle*.' 
 Which is simply affirming, that it makes no difference whether 
 
 * Westminster Review, No. XIII, p. 1/9, /. 24, 25, note.
 
 of Rent. 
 
 17 
 
 the horse is held to move the cart, or the cart the horse ; 
 that we see their movements are coincident in one instance, 
 and therefore the question whether the cart could go without 
 the horse or the horse without the' cart, is a logomachy and 
 superfluous in respect of all conceivable consequences. This is 
 an unexaggeratecl statement of the reasoning of the reply.] 
 
 [The substantial proof that there is a difference, is that 
 there is another case, in which weighty variations arise from 
 the two assumptions. The whole of the inference that tithes 
 and taxes on the land fall on the consumer, is dependent 
 on the belief that the cart may be held to move the horse. It 
 lies therefore with the supporters of the inference, to prove 
 their premises.] 
 
 Extracts will next be given from the same Theory as de- 
 livered by its original propounder Mr. Ricardo ; with a com- 
 mentary. 
 
 Rent invariably pro- 
 ceeds from the em- 
 ployment of an addi- 
 tional quantity of la- 
 bour with a propor- 
 tionally less return. 
 Principles of Political 
 Economy and Tax- 
 ation. By David Ri- 
 cardo, Esq. p. 58. 
 
 It is true, that on 
 the best land, the same 
 produce would still 
 be obtained with the 
 same labour as before, 
 but its value would be 
 enhanced in conse- 
 quence of the dimi- 
 nished returns ob- 
 tained by those who 
 employed fresh la- 
 bour and stock on the 
 less fertile land. Ri- 
 cardo. p. 61. 
 
 The reason then, 
 why raw produce rises 
 in comparative value, 
 
 The aboriginal fallacy of the Ricardo 
 Theory of Rent. An additional quan- 
 tity of labour will be employed because 
 prices have risen, which at the same time 
 raises rents ; and not rents rise because 
 more labour has been employed. 
 
 [The gratuitous and unsupported in- 
 version of this proposition, is the radical 
 defect of the whole Theory, and of the 
 consequences which depend upon it.] 
 
 The value of one man's produce is not 
 enhanced because the returns obtained 
 by another man in less favourable cir- 
 cumstances are smaller than his own ; 
 for the tendency of the latter indivi- 
 dual's creating new produce at all, is 
 to reduce the price of produce, not in- 
 crease it. But the price of all agricul- 
 tural produce is first enhanced from an 
 extrinsic cause, namely the increase of 
 competition among the purchasers ; and 
 the enhancement makes it worth while 
 to employ more labour for the sake of 
 an increase of produce, in spite of the 
 partial reaction created by the appear- 
 ance of this new produce in the market. 
 
 [The reason is neither because more 
 labour is employed in the production of 
 the last portion, nor because a rent is 
 c
 
 18 
 
 True Theory 
 
 is because more la- 
 bour is employed in 
 the production of the 
 last portion obtained, 
 and not because a 
 rent is paid to the 
 landlord. Ricardo. 
 p. 62. 
 
 paid to the landlord ; but because the 
 competition rises so as to increase the 
 price. And this increase of price is 
 what makes it worth while to apply 
 more labour, for the sake of an increase 
 of produce.] 
 
 Tokay does not rise in comparative 
 value either because more labour is 
 employed in the production of the last 
 portion obtained, or because a rent is 
 It rises in consequence of the magnitude 
 
 of the demand for it, compared with the quantity that can be 
 supplied ; and then it becomes profitable to employ a certain 
 quantity of additional labour in the production of a new 
 portion of produce, and the rent is raised at the same time. 
 
 paid to the landlord. 
 
 The value of corn 
 is regulated by the 
 quantity of labour be- 
 stowed on its produc- 
 tion on that quality of 
 land, or with that 
 portion of capital, 
 which pays no rent. 
 Ricardo. p. 62. 
 
 The value of corn is not regulated 
 by this, but does itself regulate the 
 quality of land and the portion of ca- 
 pital, that can be brought into action 
 with a profit. 
 
 The inverted proposition as given 
 opposite, amounts to saying, that the 
 price of corn is regulated by the cost for 
 which it can be produced on the last 
 quality of land, or with the last portion 
 of capital, that can be brought into activity with a living 
 profit at the going price. Or in other words, that the price 
 is regulated by the price ; which is reasoning in a circle. 
 
 Among the properties here assigned 
 as the causes of no rent, the property 
 of abundance, or of unappropriated land 
 not having begun to be scarce, is the 
 only effective one. The rise in the 
 price of agricultural produce, at one 
 and the same time raises rent, and 
 makes it practicable to cultivate land 
 less fertile or whose powers have de- 
 cayed. But there is no foundation for 
 the inverted proposition, that it is only 
 when the powers of land decay, that 
 there will be rent. 
 
 [There would be rent though there 
 was no such thing as decayed or infe- 
 rior land within the circle to which a 
 given community is limited for its 
 
 Nothing is more 
 common than to hear 
 of the advantages 
 which the land pos- 
 sesses over every 
 other source of useful 
 produce, on account 
 of the surplus which 
 it yields in the form 
 of rent. Yet when 
 land is most abun- 
 dant, when most pro- 
 ductive, and most fer- 
 tile, it yields no rent ; 
 and it is only when 
 its powers decay, and 
 less is yielded in re- 
 turn for labour, that 
 a share of the origi-
 
 of Rent. 
 
 19 
 
 nal produce of the 
 more fertile portions 
 is set apart for rent. 
 Ricurdo. p. 62. 
 
 supply ; as soon as the demand for corn 
 began to press against the limits of the 
 produce. The fact of there being either 
 decayed or inferior land at all, is itself 
 but an accident, which might have been 
 or might not have been, like the fact of 
 
 there being weak and inferior spirits ; and has no more to do 
 with the general cause of rent, than the fact of there being 
 weak spirits has to do with the general fact of spirits selling for 
 a price. If any man was to assert that proof spirit sold for a 
 high price because there were weaker spirits that were selling 
 for a lower, and was thence to derive some practical inference, 
 it would be clear that the whole was a fallacy, cultivated for 
 the sake of the inference. The case of rent is of the same 
 kind ; and the false inference for the sake of which the fallacy 
 is cultivated, is that tithes fall on the consumer.] 
 
 It is however quite true, that land possesses no advantages 
 over other sources of useful produce on account of its yielding 
 a rent; for all that is given to one, is taken from another. 
 The overlooking this, appears to have been the error of the 
 Economistes. 
 
 If air, water, the 
 elasticity of steam. 
 
 When air, water, &c. can be appro- 
 priated and the supply is limited in 
 and the pressure of proportion to the demand, they are 
 the atmosphere, were made the su bj ec ts of rent ; without any 
 reference to the existence of various 
 qualities. A gaoler who should take 
 bribes for the luxury of breathing a 
 freer atmosphere, would receive rent 
 for air. And if a walk on the roof sold 
 for half-a-crown, while putting the 
 head out of window was only sixpence, 
 he would have been equally able to 
 obtain the half-crown, if his gaol had 
 happened to have no windows at all. It 
 is the high price of fresh air altogether, 
 that makes the window sell for sixpence; and not the 
 window selling for sixpence that makes the roof sell for 
 half-a-crown. 
 
 of various qualities ; 
 if they could he ap- 
 propriated, and each 
 quality existed only 
 in moderate abun- 
 dance, they as well as 
 the laud would afford 
 a rent, as the succes- 
 sive qualities were 
 brought into use. 
 Ricardo. p. 63. 
 
 With every worse 
 quality employed, the 
 value of the commo- 
 dities in the manufac- 
 ture of which they 
 were uaed would rise ; 
 
 [The value of the commodities does 
 not rise because equal quantities of 
 labour are less productive; but it is 
 because the price of the commodities is 
 raised by the increase of competition
 
 20 
 
 because equal quanti- 
 ties of labour would 
 be less productive. 
 Ricardo. p. 63. 
 
 True Theory 
 
 or some other extrinsic cause, so as to 
 make it worth while to employ an in- 
 creased quantity of labour for the sake of 
 a comparatively smaller increase of pro- 
 duce, that the quantity of labour is 
 increased.] 
 
 If manufacturers can afford to purchase a less efficient 
 material at the same price as they used to purchase a better, 
 it must be because the demand for the articles finally manu- 
 factured has raised their price sufficiently to prevent the 
 manufacturers from losing ; and not the price rise because 
 less efficient materials have been employed. 
 
 This is only an expansion of the falla- 
 cious proposition conveyed in the preced- 
 ing extract. It is, however, quite true, 
 that the surplus produce which land 
 affords in the form of rent, is no advan- 
 tage in the aggregate. 
 
 If the surplus pro- 
 duce which land af- 
 fords in the form of 
 rent be an advantage, 
 it is desirable that, 
 every year, the ma- 
 chinery newly con- 
 structed should be 
 less efficient than the 
 
 old, as that would undoubtedly give a greater exchangeable value to 
 the goods manufactured, not only by that machinery, but by all the 
 machinery in the kingdom ; and a rent would be paid to all those 
 who possessed the most productive machinery. Rieardo. p. 64. 
 
 The rise of rent is 
 always tbe effect of 
 the increasing wealth 
 of the country, and of 
 the difficulty of pro- 
 viding food for its 
 augmented popula- 
 tion. Ricardo. p. 65. 
 
 It is the effect of the last alone. It 
 is true that the necessity for giving 
 an increased quantity of manufactured 
 goods in return for agricultural pro- 
 duce, which raises rent, will at the 
 same time increase the national wealth ; 
 because it implies the production of an 
 increased quantity of useful commo- 
 dities. But the rise of rent and the in- 
 crease of the national wealth, proceed 
 from a common cause ; not one from 
 the other. 
 
 Rent increases most 
 rapidly, as the dispo- 
 sable land decreases 
 in its productive pow- 
 ers. Ricardo. p. 66. 
 
 It would increase still more rapidly, 
 if there was no disposable land with 
 any difference of productive powers at 
 all. The less is the produce of the belt 
 of land which is so circumstanced as to 
 be called into activity by any particular 
 increase of price, the less will be the 
 magnitude of the reaction upon price and rent, which arises
 
 of Rent. 21 
 
 from the appearance of its produce in the market ; and it will 
 be least of all, if the belt of land happens to be none. The 
 relation between rent and the productive power of the dispo- 
 sable land, is one of opposition, not of connexion. It is of 
 the same kind as the relation between the water in a reservoir 
 and a leak. The accumulation of water increases most 
 rapidly, as the leak decreases ; and would be most of all if it 
 were none at all. To infer that the existence of the leak is 
 essential to the accumulation, would present a fallacy like that 
 conveyed in this part of Mr. Ricardo's Theory of Rent. 
 
 [The mistake of believing, that because the water accumu- 
 lates most rapidly as the leak decreases, the leak is the cause 
 of the accumulation, was probably what led to the fallacy of 
 inversion which is the great error of the Ricardo Theory.] 
 
 [This again may be all very abstruse and metaphysical ; but 
 the man who cannot comprehend it, would never get his 
 living as a cooper's journeyman.] 
 
 Wealth increases The effect of agricultural improve- 
 most rapidly in those ments, in all cases, has been shown to 
 countries where the be, not to retard the progress of rent, 
 disposable land is but to proraote it. 
 most fertile, where 
 importation is least 
 
 restricted, and where through agricultural improvements, produc- 
 tions can be multiplied without any increase in the proportional 
 quantity of labour, and where consequently the progress of rent is 
 slow. Ricardo. p. 66. 
 
 But that corn which The aboriginal fallacy again. The 
 is produced with the corn which is produced with the great- 
 greatest quantity of est quantity of labour does not regulate 
 labour is the regulator the price of corn . but the price deter _ 
 
 ft 1116 ?" 06 6 7 COrn '~~ mines what is the greatest quantity of 
 ' P' '* labour that can be profitably expended 
 
 on producing corn. 
 
 Adam Smith, there- Adam Smith knew, that the limita- 
 
 fore, cannot be cor- tion of the land, as soon as the time 
 
 rect in supposing that arrives when the population begins to 
 
 the original rule which g aga i nst the production, introduces 
 
 regulated the ex- ft new element of the exchangeable 
 
 changeable value of , f . u j i .? . f 
 
 commodities, namely value , f the . produce namely that of 
 
 the comparative quan- monopoly price. Unde* a monopoly 
 
 tity of labour by which wnere the quantity of produce is ne- 
 
 they were produced, cessarily limited, the question is no 
 
 can be at all altered longer how much it cost in producing,
 
 22 True Theory 
 
 by the appropriation but how much the competition among 
 of land and the pay- the purchasers will induce them to give, 
 ment of rent. Ri- Tokay does not cost more in producing 
 cardo. p. 67. tna n any other wine ; or at all events 
 
 not more in proportion to its price. 
 
 But it sells for a great deal more, because the supply is limited 
 and the competition great ; and the difference becomes rent. 
 
 To say the value was regulated by the cost because it was 
 regulated by the cost of the last portion produced, would 
 only be a quibble, even if the latter part was true. For the 
 question is, why the whole produce of one kind of commodity 
 sells only for the average cost of production including a living 
 profit ; and of another, for five or six times as much. 
 
 Adam Smith, therefore, was right. 
 
 Raw material enters The incorrectness of this has been 
 into the composition shown, in what has been said of corn, 
 of most commodities, 
 but the value of that 
 
 raw material as well as corn, is regulated by the productiveness 
 of the portion of capital last employed on the land, and paying 
 no rent ; Ricardo. p. 67. 
 
 and therefore rent If this means, that rent is not the 
 is not a component cause of the price of the produce, or of 
 part of the price of anv part o f j t> j t j s true . Dut not f or the 
 commodities. Ri- reason assigned . The reason is because, 
 car o. p. by. instead of the rent being the cause of 
 
 the price, the price is the cause of the 
 
 rent. The rent of the vineyard is not a component part of 
 the price of Tokay; for the plain reason, that the price men 
 are willing to give for Tokay, is what causes the rent. 
 
 At the same time there is no objection to the ordinary sense 
 in which rent is said to be a component part of the price of a 
 commodity ; meaning only that the price of some of its com- 
 ponent parts is a monopoly price, or one that affords a rent. 
 The two senses are different ; and must not be confounded. 
 
 and we have seen, The aboriginal fallacy again. The 
 
 that with every por- pr j ce o f produce rises first, and deter- 
 
 tion of additional ca- mines wfaat addition of capital can be 
 
 pital which it becomes em ] d with a fit aml at lhe same 
 
 necessary to employ 4 - ' J 
 
 on the land with a less time raiS6S rent ' 
 productive return, 
 rent would rise. Ri- 
 cardo. p. 68.
 
 of Rent. 
 
 23 
 
 It follows from the 
 same principles, that 
 any circumstances in 
 society which should 
 make it unnecessary 
 to employ the same 
 
 Any saving in agricultural processes 
 is such a circumstance; and agricul- 
 tural savings, as has been seen, do not 
 lower rent, but powerfully increase it. 
 The error arises, as before, from attri- 
 
 amo'u'nt 7f capitaTon butin the Production of rent to a wrong 
 
 the land, and which cause ' 
 
 should therefore make the portion last employed more productive, 
 
 would lower rent. Ricardo. p. 68. 
 
 It would lower rent ; but it would be 
 because it diminished the power of the 
 competitors to bid, and consequently 
 the price of corn. 
 
 Any great reduc- 
 tion in the capital 
 of a country, which 
 should materially di- 
 minish the funds des- 
 tined for the mainte- 
 nance of labour, would naturally have this effect. Ricardo. p. 68. 
 
 The effects of agricultural improve- 
 ments upon rent, have been shown to 
 be of a nature directly contrary. 
 
 The same effects 
 may however he pro- 
 duced when the wealth 
 and population of a 
 country are increased, 
 
 if that increase is accompanied by such marked improvements in 
 agriculture, as shall have the same effect of diminishing the necessity 
 of cultivating the poorer lands, or of expending the same amount of 
 capital on tlie cultivation of the more fertile portions. Ricardo. 
 p. 69. 
 
 If a million of quar- 
 ters of corn be neces- 
 sary for the support 
 of a given population, 
 and it be raised on 
 land of the qualities 
 of No. 1, 2, 3; and if 
 an improvement be 
 afterwards discovered 
 by which it can be 
 raised on No. I and 2, 
 without employing 
 No. 3, it is evident 
 that the immediate 
 effect must be a fall 
 of rent; for No. 2, 
 instead of No. 3, will 
 then be cultivated 
 without paying any 
 rent ; and the rent of 
 No. 1, instead of being 
 the difference be- 
 tween the produce of 
 No. 3 and No. 1, will 
 
 If a million of quarters is raised on 
 land of the qualities of No. 1, 2, 3, and 
 an improvement in agriculture subse- 
 quently takes place, the effect will be 
 that there will be some increase of pro- 
 duce on 1 and 2 and 3, and some re- 
 duction of price in consequence; and 
 the landlord will every where take all 
 that remains after paying the necessary 
 profits of stock, for rent. With the 
 same population and no more, there can 
 be no demand for any additional quan- 
 tity of corn at the same price as before ; 
 but there will, at a reduced price. Men 
 economize in the use of corn, as of every 
 thing else, when it is dear, and use it 
 more liberally when it is cheap ; and to 
 say they do not, is only the fallacy of 
 saying some men do not. If it was not 
 so, it would be impossible to get through 
 a scarce year, or to consume all the corn 
 that is produced in one of extraordinary
 
 24 
 
 plenty. The nature of effectual demand 
 is entirely overlooked. 
 
 be the difference only 
 between No. 2 and 1. 
 With the ame popu- 
 lation, and no more, 
 
 there can be no demand for any additional quantity of corn ; the 
 capital and labour employed on No. 3, will be devoted to the pro- 
 duction of other commodities desirable to the community, and can 
 have no effect in raising rent, unless the raw material from which 
 they are made cannot be obtained without employing 1 capital less 
 advantageously on the land, in which case No. 3 must again be cul- 
 tivated. Ricardo. p. 69. 
 
 Their effect on rent is of a nature di- 
 rectly contrary to what is intended to 
 be stated. They both increase it. It 
 is true that they both lead to a small 
 fall in the price of produce ; but they 
 increase rent after all. 
 
 But improvements 
 in agriculture are of 
 two kinds : those 
 which increase the 
 productive powers of 
 the land, and those 
 which enable us to 
 obtain its produce with 
 
 less labour. They both lead to a fall in the price of raw produce ; 
 they both affect rent, but they do not affect it equally. Ricardo. p. 70. 
 
 If, by the introduc- The aboriginal fallacy again. Land- 
 lords may be asked whether turnip hus- 
 bandry and invigorating manures have 
 lowered rent. If they had, landlords 
 would have been seen forming, not a 
 Board of Agriculture, but a Board for 
 the Suppression of Turnips and the 
 Prevention of Manure. 
 
 tion of the turnip hus- 
 bandry, or by the use 
 of a more invigorating 
 manure, I can obtain 
 the same produce with 
 less capital, and with- 
 out disturbing the 
 difference between the 
 productive powers of 
 the successive por- 
 tions of capital, I shall lower rent ; for a different and more pro- 
 ductive portion will be that which will form the standard from which 
 every other will be reckoned. Ricardo. p. 72. 
 
 but since the 
 same cause, the diffi- 
 culty of production, 
 raises the exchange- 
 able value of raw pro- 
 duce, and raises also 
 the proportion of raw 
 produce paid to the 
 landlord for rent, it is 
 obvious that the land- 
 lord is doubly bene- 
 fited by difficulty of 
 production. First he 
 obtains a greater 
 share, and secondly 
 the commodity in 
 
 In the case of a monopoly like that, 
 for example, of the vineyard which pro- 
 duces Tokay, an increase of the diffi- 
 culty of production cannot raise the ex- 
 changeable value of the produce; be- 
 cause that is raised already, above the 
 height which would be assigned by the 
 difficulty of production. The difficulty 
 of production only diminishes the quan- 
 tity of gain which will remain with the 
 owners of the monopoly. In the same 
 manner in the case of other agricultural 
 produce, the difficulty of production 
 cannot raise the exchangeable value, as 
 long as there is a monopoly gain or
 
 of Rent. 25 
 
 which he is paid is of rent which can he taken from the land- 
 greater value. Ri- } ord . Neither can it raise the proportion 
 cardo. p. 75. ^ f the produce i eft to the l an dlord for 
 
 rent; for, as in the case of Tokay, it 
 
 evidently diminishes it. The assertion made to the contrary, 
 is only the aboriginal fallacy repeated. 
 
 [Having in a former [If the principle represented as regu- 
 part of this work lating the price of com is incorrect, the 
 established, I hope sa- conclusion derived from it on the sub- 
 tisfactorily, the prin- j ect of l an d-tax, tithes, and taxes on 
 Ciple, that the price du is without f ounda tion.] 
 
 of corn is regulated ' r * . -n J ,, 
 
 bv the cost of L pro- C A taX F tlth : Wl11 . C3USC a Sma11 re : 
 
 duction on that land action on the price, in consequence of 
 exclusively, or rather ^ e existence of land and outlay which 
 with that capital ex- are thrown out of activity by it. But 
 clusively, which pays this will not prevent the tax, with the 
 no rent, it will fol- exception of a small effect of the re- 
 low that whatever may action, from being thrown upon the rent.] 
 increase the cost 
 
 of production will increase the price ; whatever may reduce 
 it, will lower the price. The necessity of cultivating poorer 
 land, or of obtaining a less return with a given additional 
 capital on land already in cultivation, will inevitably raise the ex- 
 changeable value of raw produce. The discovery of machinery, 
 which will enable the cultivator to obtain his corn at a less cost of 
 production, will necessarily lower its exchangeable value. Any tax 
 which may be imposed on the cultivator, whether in the shape of 
 land-tax, tithes, or a tax on the produce when obtained, will in- 
 crease the cost of production, and will therefore raise the price of 
 raw produce. Ricardo. p. 194.] 
 
 After these extracts from the Theory as delivered by its ori- 
 ginal propounder, the examination of the consequences derived 
 from k will be carried on by references to the work of Mr. Mill. 
 
 The idea of having discovered a new principle for the de- 
 termination of Rent, which among other qualities has that of 
 being independent of the rate of profits of capital, leads to 
 what is presented as a discovery of the regulating principle of 
 Profits. Rent, it is urged, has been discovered to be a thing 
 of fixed and determinate magnitude, depending on something 
 in the decreasing qualities of land, and ' independent of the 
 general result of the productive powers of labour and capital* ;' 
 Wages, 'depend on the proportion between population and 
 capital f;' and these two being settled, 'it is evident that the 
 portion which remains is Profits J.' That 'wages depend on 
 
 * Mill. p. 85. f Ib. p. 41. t Ib. p. 68.
 
 26 True Theory 
 
 the proportion between population and capital,' is tantamount 
 to saying, that the greater share a man gets, the richer he will 
 be. But it is never stated why the proportion between popu- 
 lation and capital is different at one time and place from what 
 it is at another, or what it is that induces such a condition of 
 things as makes the shares different. To state how things 
 vary, is not to state their absolute magnitude ; for one may be 
 indefinitely great and another indefinitely small, and still both 
 vary after the same law*. A labourer in Ireland will live and 
 bring up a family upon potatoes ; a labourer in England will 
 see the world unpeopled first. Why does not the labouring 
 population in England increase till wages are reduced to the 
 same condition as in Ireland ; or why is not the population in 
 Ireland diminished till it bears the same proportion to capital 
 as in England ? This is the question that wanted answering ; 
 and the answer would have pointed to another element es- 
 sential to the determination of both Wages and Profits, and 
 whose existence is incompatible with the solution advanced. 
 And this element, as long since pointed out by Adam Smith, 
 is the force of opinion and habit. Englishmen have the phy- 
 sical capability of living on potatoes as much as other men, 
 but fortunately they have not the habit ; and though it might 
 be wrong to say they would starve first in their own proper 
 persons, they will utterly refuse to multiply upon such diet, 
 the effect of which on population is ultimately the same. And 
 the causes of these differences of habit, are to be found in every 
 thing that has affected the past or affects the present condition 
 of society, in ancient institutions, in modern improvements, 
 in past and present laws, in battles lost and won, in refor- 
 mations of religion, in the progress of science, in the manners 
 of the higher classes, in the information of the lower, in every 
 thing which man can neither suddenly alter nor create, and 
 which connects his present mode of existence with that of his 
 ancestors and his posterity. Fluctuations will be perpetually 
 taking place in the existing proportion between population 
 and capital; but the element which, in the midst of these, keeps 
 the average rate of wages to one point and not to another, or 
 which determines the point to which wages shall tend as to a 
 mean, is not physical but mental. There may be a lowest 
 physical point somewhere ; but happily all civilized, and most 
 uncivilized nations, are considerably above it. The New- 
 
 * In the language of algebra, # and X may both vary as -f; but to 
 know any thing about the absolute magnitude of #, it is necessary to 
 know that x-=.A x ^. The manner of living imposed by habits and opi. 
 nions, is the missing A.
 
 of Rent. 27 
 
 Hollander may approach the lowest physical point, when he 
 feeds on worms ; but this has no bearing on the question why 
 one man lives on beef and another on potatoes, for both diets 
 are happily far removed from that of the New- Hollander. 
 The Englishman will not live and bring up a family upon po- 
 tatoes ; because, though he may consent to live on them when 
 he can positively procure nothing else, habit, custom, the 
 opinion of those around him, have made it in his eyes con- 
 temptible, irrational, absurd, for a man to be living on po- 
 tatoes when he has the opportunity of getting any thing better. 
 In his hours of prosperity therefore, he will to a certainty 
 solace himself with bacon, and most probably venture upon 
 beef; and as this absorbs a greater portion of his income in 
 what he views as necessary to his individual existence, it pro- 
 portionally reduces his disposition to burthen himself with 
 new mouths. If the Irishman had the prospect of all this 
 bacon and beef, he would view it as convertible into potatoes 
 for a family like a patriarch's. The Englishman thinks it but 
 decency to swallow all, and omits the family. 
 
 And as opinions and habits determine the final or average 
 proportion which shall be maintained between the numbers of 
 the labouring population and the funds for their support, or 
 in other words determine the average rate of Wages, so 
 they also determine the average rate of Profits of Stock, which 
 are only the wages of another description of labourers, con- 
 sisting 1 partly of the recompense of present labour exerted in 
 the form of superintendence, and partly of the recompense of 
 past labour exerted in the creation of their capital*. Public 
 opinion and custom require, for example, that a shopkeeper 
 shall have a good coat, shall drink at all times malt liquor 
 and sometimes wine, and give them to his neighbours, that 
 his wife and daughters, if he has any, shall wear clean linen, and 
 moreover not wash it themselves, and that when they 
 travel, it shall be by the stage-coach and not by the waggon. 
 
 * This last part, is the recompense spread over the greatest possible 
 space. If it was proposed to a savage hunter to give a hundred of his deer 
 for a gun, for the sake of the additional deer which his hunting would by 
 means of it obtain for him in future, if the gun would last only one year, 
 he must expect from it a hundred additional deer within the year, and 
 something more. If it would last two years, he might be content with the 
 prospect of 60 a year, the difference being a compensation for the delay; 
 if four, with 40 ; if eight, with 25 ; and if it would last for ever, or for a 
 time to which he sees no end, he might be induced to consent by the ex- 
 pectation of 6 or 8. But in all these cases, what he expects, is the recom- 
 pense of the labour expended in procuring the hundred deer, spread over 
 a larger space.
 
 28 True Theory 
 
 Though he may do without some or other of these things in a 
 certain degree when necessity presses, he cannot and will not 
 do without them in the main. If therefore he is a man of 
 foresight, he will at all events defer adding to the population 
 of shopkeepers, till he sees a fair prospect of supporting a 
 family in the way which public opinion pronounces to be 
 respectable. But if he engages in it without foresight, he 
 will keep down the population of shopkeepers in another way ; 
 for he will break. Bankruptcy is the check to the indefinite 
 multiplication of traders, as the evils arising from diminished 
 food are the check to the indefinite multiplication of the lower 
 classes of labourers. In the same manner if the higher order 
 of traders would, or could, do without a certain rate of expen- 
 diture, they might remit something of their rate of profits. 
 If a great brewer, for example, would drive his family to the 
 two-shilling gallery in one of his own drays, or a banker 
 be content, as in India, to sit on a mud floor in the shop of 
 his forefathers, and retire to swallow rice with the condiment 
 of ghee, there would be some chance of the thing being 
 brought to pass. But ' the crowning city' has determined, 
 that her merchants shall be princes, and her traffickers the 
 honourable of the earth ; and they neither can, nor will, resist 
 the award. The opinion of society therefore, is what in the 
 long run determines and keeps up the rate of recompense in 
 this class as well as in the other; and, though there may be 
 individual exceptions, men in general will break, sooner than 
 not live up to whatis expected from them. The difficulty is not 
 in finding men who will live up to this mark, but in finding 
 men who will live within their means. The profits of stock, 
 like wages, may be momentarily elevated or depressed by the 
 fluctuations in the proportion between the business to be done 
 and the men who are to do it. When business is scarce, the 
 competition may to a certain degree induce traders to do it at 
 a cheaper rate ; and the contrary. But if the scarcity of 
 business is permanent, traders will begin to go out by the 
 horn gate of bankruptcy, and so the balance will be preserved. 
 The Section on ' Exchangeable Value' omits all notice of 
 commodities produced under a monopoly, or for which the 
 competition causes more to be given than repays the whole 
 expenses with a living profit. Agricultural produce comes 
 notoriously under this description ; for the price not only pays 
 the expenses and profits of the cultivator, but a rent besides. 
 
 'Cost of production, then, regulates the exchangeable value of 
 commodities.' Mill. p. 93. 
 
 This is only true in one direction. The exchangeable
 
 of Rent. 29 
 
 value of a commodity of ordinary consumption cannot long 
 continue to be less than will pay the cost of production including 
 the necessary profits ; but it will be more, to an extent limited 
 only by the circumstances of the particular case, whenever 
 the competition increases the price faster than the outlay 
 increases the produce. 
 
 If there is any truth in the account that has been given of 
 the origin and progress of Rent, an immediate corollary from 
 it is, that taxes upon the landfall on the landlord. For if the 
 land-owner united the characters of landlord and cultivator 
 by keeping the land in his own hands, the charge must fall 
 upon him. And what he cannot keep himself, he can never 
 recover from others by the invention of selling it to them with 
 their eyes open. 
 
 If it is urged that such land-owners might recover the tax 
 from the consumers, by raising the price of corn, the answer 
 is, that the operation of their individual interests will prevent 
 it. If they raise the price of corn, it is manifest that less must 
 be sold. A high price spins out the consumption of a defi- 
 cient harvest, and would cause only a portion of equal 
 magnitude to be consumed out of a plentiful one. But none 
 of the land- owners would place so much confidence in the 
 union among his brethren, as either to throw away corn 
 already in his barns, when he had the option of selling it, 
 or to refuse to grow it, when by the sale of it he could obtain 
 what he considers as a reasonable profit. The quantity of 
 corn grown and sold, therefore, will not be diminished by any 
 such combination ; and if the quantity is not diminished, the 
 price for which it is sold cannot be increased. If there was 
 no monopoly gain, the case would be very different indeed. 
 For then the tax would oblige the land-owners to contract 
 their growth, till the price rose to what would pay them for 
 their trouble ; in the same manner as other producers do in 
 similar circumstances. And the land-owners themselves will 
 actually do this, with respect to that portion of their produce 
 which will not pay them the necessary profits of stock. 
 
 If it is suggested that the landlords may raise the price by 
 throwing the necessity upon the tenants, it is not difficult to 
 see that the tenants will be equally unable to compass the 
 end desired. To put the strongest case, let it be supposed 
 that all the landlords resolve not to abate a fraction of rent on 
 account of the tax, and that all the tenants have been pre- 
 viously bound by long leases which leave them no alternative 
 but that of recovering the tax from the consumers or losing 
 the amount. The tenant then, has made an improvident 
 bargain, by which he is likely to lose the amount of the tax 
 for several years, unless it can be recovered from the con-
 
 30 True Theory 
 
 sumers. But this will not produce in him any inclination to 
 throw more away after it, either by omitting to sell corn 
 which is in his barns, or by omitting to grow it to the utmost 
 that will pay him a living profit upon the last sum added to 
 the outlay. The outlay and the produce will therefore be the 
 same as if the land-owners had held the land in their own 
 hands ; and consequently, as before, the tax will not be re- 
 covered in the price. The tenants therefore must put up with 
 the loss, till they have the opportunity of recurring to the 
 fair competition between landlords and tenants, when the tax 
 will be thrown upon the landlords ; for it is impossible that 
 any resolutions of the landlords should induce the tenants to 
 go on accepting less than a living profit. 
 
 The way then to determine the effect of any tax or charge 
 upon land or agricultural produce, is to see what the effect 
 would be upon land-owners uniting the characters of landlord 
 and cultivator, and what alterations would be made in the 
 bargain which they would have to offer to the competition 
 among tenants. 
 
 By the application of this principle, it will appear, that the 
 Section on ' Taxes on Rent' (Mill. p. 248.) is right in the 
 conclusion delivered, but not for any reason that is there 
 stated. The inability of the landlords to protect themselves 
 by throwing the tax upon the tenants, who pertinaciously 
 refuse to starve upon less than a living profit; the inability 
 of either landlords or tenants to raise the price of corn for 
 their own convenience and throw the tax on the consumers ; 
 are the reasons why taxes on rent, whether levied from the 
 person of the landlord or of the tenant, must fall upon the 
 landlord. 
 
 The Section entitled ' A Tax on Profits ' presents the fol- 
 lowing results. 
 
 ' A direct tax on profits of stock offers no question of any difficulty. 
 It would fall entirely upon the owners of capital, and could not be shifted 
 upon any other portion of the community. 
 
 As all capitalists would be affected equally, there would he no motive 
 to the man, engaged in any one species of production, to remove his 
 capital to any other. If he paid a certain portion of his profits, 
 derived from the business in which he was already engaged, he would 
 pay an equal portion, derived from any other business to which he 
 could resort. There would not, therefore, in consequence of such a 
 tax, be any shifting of capital from one species of employment to 
 another. The same quantity of every species of goods would be pro- 
 duced, if there was the same demand for them. That there would nn the 
 whole be the same aggregate demand, is also immediately apparent. The 
 same capital is supposedto be employed in the business of production, 
 and if part of what accrued to the capitalist was taken from him, lessen- 
 ing to that extent his means of purchasing, it would be transferred to 
 the government, whose power of purchasing would be thence to the 
 same degree increased.' Mill. p. 266.
 
 of Rent. 31 
 
 The Profits here meant are manufacturing 1 profits, as dis- 
 tinguished i'rom agricultural ; for ' Taxes on the Profits of 
 the Farmer' form the subject of a subsequent Section. It 
 may however be useful to consider the two kinds in a different 
 order. 
 
 When there is a monopoly gain behind, as there is in the 
 case of agricultural profits, it will be found by application to 
 the case of a land-owner uniting the characters of landlord 
 and cultivator, that the effects of a tax on profits, upon the 
 cultivator, will be the same as those of a reduction of price. 
 On the landlord the effects will in the first instance be, that 
 the tax on the final amount of the cultivator's profits will be 
 taken out of the rent. But at the same time there will be a 
 reaction on the price of corn in the way of increasing it, in 
 consequence of the partial diminution of produce; and of this 
 increase of price the landlord will have the benefit. To 
 recur, for example, to the case formerly taken, If corn was 
 at 55*. and a tax of 20 per cent was imposed on the profits 
 of the capital employed, the first approximation to the result 
 would be, that the cultivator, instead of cultivating all the land 
 and making all the outlay that would return him 10 per cent, 
 would stop at that which would leave him 10 per cent after 
 payment of the tax, or which would return him in the first 
 instance 121 . The effects of this on the outlay, on the amount 
 of the cultivator's profits, and on the quantity of produce, would 
 be the same as those of a reduction of the price of corn from 
 55s. to 44s. ; for it would be the same thing in respect of the 
 last 10/. added to the outlay, whether what was received for 
 its produce was reduced one fifth by a tax, or by corn falling 
 one fifth. The outlay would therefore be reduced from 1020/. 
 to 1010/., the annual amount of profits from 102/. to 101?., 
 and the produce from 609 quarters to 605. The price re- 
 ceived for the 605 quarters at 55*. would be 1663/. 15s. ; so 
 that after deducting 207. 4s. for the tax on 101/., the final 
 receipts of the individual combining the characters of land- 
 lord and cultivator would be 1643/. 11s. And since what he 
 could dispose of to a tenant would be simply the opportunity 
 of making the outlay of 1010/. with the condition of retaining 
 llll/. out of the proceeds, what would remain to him in the 
 shape of rent would be 532/. 11s., instead of 552/. 15s. as it 
 was before; or the rent would be diminished by 20/. 4s., 
 which is the tax. But to all this there must be applied a 
 correction, for the reaction on the price of corn created by 
 the general diminution of produce which arises from the tax 
 and is represented in this particular case by four quarters. 
 If on an estimate like that formerly entered into in a note, the 
 amount of this reaction might be stated at sixpence per quarter,
 
 32 True Theory 
 
 the price of corn instead of 55*. would be 55*. 6d. And the 
 effect of this increase of price would be in a small degree to 
 increase the outlay, the amount of profits, and the produce. 
 But the principal effect, neglecting inconsiderable fractions, 
 would be, that the price of the 605 quarters would be in- 
 creased by sixpence a quarter or 15/. 2*. 6d., which would 
 be added to the rent. A further correction might be made 
 by calculating the effect of the small increase of produce last 
 mentioned upon prices, and similar corrections might be ex- 
 tended to an indefinite number ; but. their amount would be 
 insignificant. The corrected rent therefore may be stated at 
 5471. 13*. 6d. 
 
 What in the case of a tax on profits makes the result so 
 little prejudicial to the landlord, is that ihe reaction upon 
 prices, and its effect in raising rent, are the same as if the rate 
 was levied on the whole produce ; while the actual levy is 
 only on the profits. Thus in the case assumed, the reaction 
 upon prices is as great as would have been caused by a tax of 
 one fifth, or a double tithe ; while the sum taken by the tax, 
 or what falls on the other side of the landlord's account, is 
 less than an eightieth, or than the eighth of a tithe. And 
 what is thus saved by the landlord, is at the expense of the 
 consumers. 
 
 There remains the case where there is no monopoly gain 
 behind ; or in other words the case of a tax on manufacturing 
 profits. And here it is evident, that if the tax on the profits 
 of the capitalists amounted, for example, to nine tenths, the 
 capitalists would not live upon the tenth without doing all in 
 their power to throw the loss on other persons. It lies there- 
 fore on the affirmant to prove, that they can throw the tax on 
 nobody else. 
 
 If the difficulty of bringing silver from the mine, should, 
 from the failure of the mines or other natural causes, be in- 
 creased til! it approached to the difficulty of procuring gold, 
 the producers of silver, if there was no monopoly gain be- 
 hind upon which the difference could be thrown, must of 
 necessity raise its price, and consent to the diminution of the 
 extent of their sales which would be the consequence. For 
 nothing can long continue to be produced and sold, for less than 
 what will replace, with a living profit, the payments that 
 must be made by the producer. But precisely the same effects 
 would follow, if the increased difficulty of bringing silver to 
 market arose from a tax instead of a natural impediment. 
 For example, if what the capitalists accounted a living profit 
 was 10 per cent, and the tax amounted to 20 per cent on their 
 profits, the capitalists, to live, must demand the prices which 
 would leave them in the first instance 12i per cent instead of
 
 of Rent. 33 
 
 10, or, for the silver which costs them 100/. and which they 
 used to sell for 11(W., they must now ask 112/. 10*. And the 
 effects of this on the quantity of silver produced and sold, 
 would be the same as if the necessity for selling the silver for 
 112/. 10s. instead of 11 0/. had arisen from its costing ten 
 elevenths of 112/. 10s., or 102/. 5s. 5d., instead of 100/., 
 or as if from natural causes the difficulty of producing silver 
 had been increased by ten elevenths of 2%, or 2-rr per cent. 
 
 If the tax instead of being confined to the profits of the 
 producers of silver, extended to manufactures in general, the 
 same consequences would ensue in all ; or the prices of all the 
 commodities must be raised to the point which would give the 
 producers their living profits after deducting the tax. The 
 producers before demanded such prices as left them 10 per 
 cent, and no business was done without it ; and for the same 
 reasons and by the same processes that this took place with 
 respect to the 10 per cent, it would take place with respect to 
 the 12, when the 12| was made the lowest by which men 
 could live. And the effect of this on the production and con- 
 sumption of manufactured goods in the aggregate, would be 
 the same as if an ordinance of nature had suddenly determined 
 that the difficulty of every kind of operation connected with 
 manufactures should be increased by 2A- per cent ; for the 
 prices at which the goods could be sold, and consequently the 
 quantities finally sold and consumed, would be the same in 
 the two cases. But of such a physical visitation, the conse- 
 quence would be, that of a given quantity of manufacturing 
 industry and intelligence exerted by the community, the pro- 
 duce would in the aggregate be diminished in the proportion 
 of 100 to 102 ,*-!- The consequence, therefore, of the tax 
 would be the same ; in addition to the abstraction of the tax. 
 
 Under such a visitation, the labouring classes would proceed 
 to bring about a return to the same substantial rate of wages 
 as before, by their painful but irresistible resource of reducing 
 their numbers. But though they could by this method effect 
 a return to the same rate of wages, they could not effect a re- 
 turn to the same quantity of employment at that rate. Their 
 numbers, therefore, must finally be diminished. 
 
 The manufacturing capitalists would go on increasing their 
 prices, though at the expense of diminishing their sales, till 
 they secured to themselves their living rate of profits as be- 
 fore. But, like the labourers, though they secured to themselves 
 the substantial enjoyment of the same rate of profits, they 
 could not secure the same quantity of profits at that rate ; 
 for they can never get over the fact, that there is a positive 
 diminution of the production and consumption of the commu- 
 nity. Hence the number of persons engaged in trade must be 
 
 D
 
 34 True Theory 
 
 finally diminished also ; either by men's abstaining from adding 
 to the population of traders, or by the shorter cut of bankruptcy. 
 
 On comparing the effects of a tax of 20 per cent on manu- 
 facturing profits with those of a tax of 20 per cent on agri- 
 cultural profits as stated in a former place, it will be perceived 
 that the loss or prevention of production is of very different 
 comparative magnitude in the two cases. In the first, it is ne- 
 cessarily equal in value to the tax ; and amounts, in the in- 
 stance stated, to about 2-fV per cent on the whole produce. 
 In the other, it depends on the accident of there being land 
 which will be thrown out of cultivation, and outlay which will 
 be cut off; and its absolute magnitude in the instance stated 
 amounts to less than 4. per cent on the whole produce, being 
 to the percentage in the other case, only as about 2 to 7. The 
 difference between the effects of taxes on agriculture and on 
 manufactures, will be further illustrated on arriving at the case 
 of Tithes. 
 
 A tax on the profits of manufacturers, then, will be taken 
 by the government once, and there will be an additional loss 
 or prevention of an equivalent quantity of production besides, 
 which will be lost to the community without advantage to the 
 government or any body else, in a manner analogous to what 
 would be the result of a deterioration of the powers of nature. 
 The tax falls on the consumers, and the gratuitous loss on the 
 capitalists and labourers. And this last gratuitous loss is 
 measured by, and is in fact identical with, the losses arising 
 to the manufacturing capitalists and labourers from the dimi- 
 nution of the extent of their business. 
 
 The assertion that there would on the whole be the same 
 aggregate demand, points to an inaccurate notion of the nature 
 of demand. Demand is spoken of as if it was something to 
 which all other things must bend, as if men began by deter- 
 mining that they must and would have a certain quantity of 
 commodities, and the consequence was that they had it. 
 Whereas the truth is that effectual demand, the demand of 
 those who are willing to pay the whole of the price necessary 
 to secure them the possession of the commodity under the 
 existing state of competition and of the quantity in the market, 
 is a floating or variable quantity, that alters with every change 
 of price or variation in the facility of production. It is by 
 means of this connexion between the increase of price and 
 the diminution of effectual demand, that a deficient harvest 
 is made to last till the arrival of the next ; and the contrary. 
 In this and other passages, demand appears to be confounded 
 with desire, or with that kind of demand which, in the 
 language of Adam Smith, a very poor man may be said to 
 have for a coach and six.
 
 of Rent. 35 
 
 The Section entitled ' A Tax on Wages' omits, as before, 
 to give any reason for their absolute magnitude. And in con- 
 sequence much of it is expended in reasoning upon a case 
 which never exists. It is never true physically, that ' wages 
 ' are already at the lowest point to which they can be reduced ; 
 ' that is, just sufficient to keep up the number of labourers 
 ' and no more.' It is always true virtually, or including the 
 effects of habit and opinion ; with the exception of such tem- 
 porary fluctuations as, when they are in the way of increase, 
 it may be conceded will be immediately put down by the ap- 
 pearance of a tax. ' When wages are so low as barely to 
 ' keep up the number of labourers, wages must rise to the 
 ' amount of any tax imposed upon them, because there is a 
 * continual diminution of the supply of labourers till the rise 
 ' is effected.' If this might be construed as alluding to the 
 virtual instead of the physical boundary, the conclusion would 
 to a certain extent coincide with what have been represented 
 as the just inferences with respect to Wages and Profits. Two 
 consequences however remain ; both of them contrary to the 
 conclusions of the author. One is, that taxes on the wages 
 of labourers employed in agriculture, will in the end be taken 
 from the landlord in the rent. The other, that taxes on the 
 wages of manufacturing labour will be recovered from the ca- 
 pitalists, and finally from the consumers, so far as that will be 
 done by the restoration of the old substantial rate of wages ; 
 but that there will still be a gratuitous loss to the capitalists 
 and labourers conjointly, in the shape of a diminution of the 
 quantity of their business, over and above the loss of the tax 
 by somebody else besides, in the same manner as was noted 
 under the head of Taxes on Profits. 
 
 To the recovery of Taxes on Wages from the capitalists 
 Mr. Ricardo has objected, that ' the rise in the price of goods 
 ' will again operate on wages, and the action and reaction, 
 * first of wages on goods, and then of goods on wages, will be 
 ' extended without any assignable limits*;' which he repre- 
 sents as an ' absurd conclusion,' that makes ' the principle 
 indefensible.' But the supposition that any absurd conclusion 
 arises, is founded on inattention to the nature of infinite series. 
 Because a series is endless in its number of terms, it does not 
 follow that the sum of the whole is infinite f. If a man was to 
 proceed to calculate all the successive actions and reactions of 
 wages and prices upon each other, he might find himself en- 
 
 * Principles of Political Economy and Taxation. p. 301. 
 
 f The most familiar example is the series + i + + &c. adinfini- 
 tum ; which is the foundation of the sophism of Achilles and the tor- 
 toise. The sum of the terms ad inftnitum is manifestly only equal to J. 
 
 D 2
 
 36 True Theory 
 
 gaged in what mathematicians call the method of approxima- 
 tion ; which, though he could never positively arrive at its end, 
 he might carry to as minute a fraction of a farthing as would 
 satisfy the most scrupulous accountant. But there exists a 
 palpable cause which would prevent the effect of these actions 
 and reactions, not only from being infinite for that they could 
 never be but from rising above an amount which may easily 
 be specified. And this cause is, the impossibility of money prices 
 rising above what can be conducted by the circulating medium. 
 The nature of the process is the opposite of that by which 
 an excess of circulating medium causes a depreciation of the 
 currency and increase of money prices. And this process 
 and the other, will go on at the same time without interfering 
 with each other ; as the pieces on a chess-board are carried 
 forwards or backwards with relation to one another, though 
 the board and the ship in which it is contained are all the 
 time moving in some direction of their own. On the whole 
 therefore, there is nothing that is absurd ; and the error 
 charged upon Adam Smith a few lines further on, resolves 
 itself into the defectiveness of the writer's own conclusion 
 respecting the origin of Rent. 
 
 The next Section, entitled 'Direct Taxes which are destined to 
 fall equally upon all sources of income,' commences as follows. 
 
 'Assessed taxes, poll taxes, and income taxes, are of this descrip- 
 tion. After what has been said, it is not difficult to see upon whom, 
 in each instance, the burden of them falls. 
 
 In as far as they are paid by the man, whose income is derived from 
 rent, or the man whose income is derived from profits of stock, the burden of 
 them is borne by these classes. No additional demand arises from the 
 tax ; and, therefore, neither can landlords raise their rents, nor capita- 
 lists the price of their commodities. 1 Mill. p. 267. 
 
 Either the words ' In as far as they are paid by the man ' 
 &c. mean ' Tn as far as the burden of them is finally borne by 
 the man' &c., which makes a truism; or it is intended to 
 infer that the burden is borne by certain individuals, because the 
 tax is paid by them in the first instance. If nothing was required 
 towards determining on whom a tax finally fell, but to ask at 
 whose door the tax-gatherer knocked for the amount, the 
 science of taxation would be wonderfully simplified. The 
 assertion that capitalists cannot raise the price of their commo- 
 dities because no additional demand arises from the tax, ex- 
 hibits the same inattention as in a former instance, to the na- 
 ture of effectual demand. If they cannot increase the demand, 
 they can diminish the supply ; and they must do it, whether 
 the difficulty of production is increased from a physical cause 
 or from a tax, or else go on manufacturing with less than a 
 living profit. And at the same time that the price is thus 
 raised, the effectual demand the demand of those who are
 
 of Rent. 37 
 
 willing to pay the expenses and profits necessary for bringing 
 the commodity to market will not only not be increased, but 
 will be diminished. All this is nothing but what takes place 
 on every occasion of a rise of price from increased difficulty 
 of production. 
 
 With respect to ' assessed taxes, poll taxes, and income 
 taxes,' the truth seems to be, that such of them as are levied 
 from the landlords, and from individuals who are living upon 
 some kind of previous accumulation without being engaged in 
 trade, will be finally paid by those persons and affect nobody 
 else ; for to the manufacturing and commercial classes, the ex- 
 penditure of these sums by the government will be the same 
 thing in the aggregate as if they had been left to be expended by 
 the original owners. Such as are levied from agricultural 
 capitalists or labourers, will finally fall on the ??ndlord in the 
 rent ; with the comparatively small alterations in outlay, pro- 
 duce, &c. which have been stated. Such as are levied from 
 manufacturing capitalists or labourers, will produce the effects 
 stated under the heads of Taxes on Profits and on Wages ; 
 among which the most important, is the gratuitous loss, in 
 the shape of the destruction of employment, which arises in 
 addition to the tax. 
 
 The Section upon ' Taxes on Commodities' is true with 
 respect to only one of the two great divisions into which com- 
 modities are to be classed ; and only partially true with re- 
 spect to that. 
 
 When a tax is laid on any commodity that has not a mo- 
 nopoly gain behind, it rises in price, ' and the dealer or pro- 
 ' ducer is re-imbursed for what he has advanced on account of 
 ' the tax. If he were not re-imbursed, he would not remain 
 ' upon a level with others, and would discontinue his trade.' 
 And if the tax was laid upon all commodities, it would still 
 ' fall upon purchasers.' Such with the exception of the li- 
 mitation relating to monopoly produce are the admissions 
 of the author. It would be curious to know how he con- 
 vinces himself, that this is true when the tax is demanded from 
 the producer under the title of a tax on his commodities, and 
 would not have been true if the same sum had been demanded 
 from him under the title of a tax on his profits. 
 
 The omissions are, First, The distinction into commodities 
 which are produced under a monopoly, and commodities 
 which are not ; or in other words into raw produce, and manu- 
 factured goods*. For in the case of the first kind, the tax 
 will be recovered from the residuary proprietors, who are the 
 landlords. 
 
 * [All commodities must contain some raw produce ; and this part 
 must follow the laws of its own class. By manufactured goods must
 
 38 True Theory 
 
 Secondly, The gratuitous loss or prevention of production, 
 analogous to what would take place from a deterioration of 
 the powers of nature, which will necessarily attend a tax on 
 manufactured goods, in the same way as if it had been levied 
 by an impost of a different proportion upon the profits of the 
 individuals engaged in the production. For example, if the 
 rate of profits be 10 per cent, it will be the same thing whether 
 a tax of 20 per cent is levied on the profits, or a tax of 2-* 
 per cent on the prime cost, or of 2-rV on the selling price. 
 The effect of any of which will be, in addition to the infliction 
 of the tax, to cause a gratuitous loss or prevention of ma- 
 nufacturing production, amounting to a reduction in the pro- 
 portion of 100 to 102^. 
 
 A tax, therefore, on manufactured goods, is taken by the 
 government once, and there is a gratuitous loss or prevention 
 of production besides, equal in value to the tax. The tax 
 falls on the consumers, and the gratuitous loss on the capi- 
 talists and labourers. 
 
 On the first of these omissions is founded the fallacy in the 
 next Section entitled ' A Tax upon the produce of the Land/ 
 
 ' A tax upon the produce of land, a tax upon corn, for example, 
 would raise the price of corn, as of any other commodity. It would 
 fall by consequence, neither upon the farmer, nor upon the landlord, 
 but upon the consumer. The farmer is situated as any other capita- 
 Hit, or producer; and we have seen sufficiently in what manner the 
 tax upon commodities is transferred from him that produces to him 
 that consumes.' Mill. p. 282. 
 
 The first fallacy is in the conclusion of the preceding Sec- 
 tion that all commodities are alike. The next is in the in- 
 ference, that a tax on corn will raise the price because it is a 
 commodity. 
 
 What follows is equally remote from being correct. The 
 farmer is not situated as any other capitalist or producer ; for 
 he precisely differs from them in the capital point of having 
 a monopoly gain at his back from which he may recover. To 
 say that he is situated as any other capitalist or producer, is 
 like saying that a man in a house on fire is situated as a man 
 in a ship; when the most notable fact about the whole case 
 is, that he has a back-door by which he may escape, and the 
 other has not. 
 
 ' The landlord is equally exempted. We have already seen that 
 there is a portion of the capital employed upon the land, the return 
 to which is sufficient to yield the ordinary profits of stock, and no 
 more. The price of produce must be sufficient to yield this profit, 
 otherwise the capital would be withdrawn.' Mitt. p. 282. 
 
 therefore, in strictness, be understood only that part ef the goods or of 
 their quality, which is the effect of manufacturing industry and not raw 
 produce. For example, if a halfpenny-worth of iron ore is made into a 
 waich-chain worth twenty shillings, one halfpenny-worth of the chain 
 is always raw produce, and the rest manufactures.]
 
 of Rent. 39 
 
 The fallacy here is in the assumption that the tenants can 
 raise the price of corn, to gratify either themselves or the 
 landlords, and that capital cannot be withdrawn. The tenant 
 must be indemnified for the tax ; but not out of the price of 
 corn. A portion of capital will be withdrawn ; though it will 
 be a comparatively small one. So far is there from being any 
 difficulty in capital being withdrawn, that it is what happens 
 on every diminution of demand. The idea of there being any 
 difficulty in its happening, must be referred to the opinion be- 
 fore mentioned, of the existence of an unalterable demand. 
 
 ' If a tax is imposed upon produce, and levied upon the cultivator, 
 it follows that the price of produce must rise sufficiently to refund the 
 tax. If the tax is 10 per cent or any other rate, upon the selling price, 
 corn must rise in value one-tenth, or any other proportion.' Mill. 
 p. 282. 
 
 It follows that something must be altered. But it no more 
 follows that it must be the price of produce, when it may also 
 be the rent, than it follows that because a man's brother is 
 dead it is Thomas, when he has also a brother named John. 
 
 The real effects on the landlords and tenants, of a tax on 
 agricultural produce, will, with the exception of a small re- 
 action, be the same as those of a reduction of price of equal 
 amount. To recur, for example, to the case stated before, 
 If corn was at 44*., and a tax was imposed of 4*. per quarter, 
 the first approximation to the result would be, that the outlay 
 would be reduced from 1010/. to 1000/., the produce from 
 605 quarters to 600, the annual amount of profits from lOlf. 
 to 100/., and the rent from 220/. to 100/. For it would be 
 the same thing to the land-bolder, both in his character of 
 cultivator and landlord, whether a loss of 4s. per quarter was 
 occasioned by a reduction of price or by a tax. But the effect 
 of the tax will not be to cause a loss of precisely 4*. per quar- 
 ter ; for there will be a certain reaction on the price of corn 
 in the way of increasing it, in consequence of the diminution 
 of produce which arises from the tax and is represented in the 
 particular case by five quarters. If on an estimate like those 
 formerly entered into, the amount of this reaction might be 
 stated at fourpeuce per quarter, the price of corn instead of 44*. 
 would be 44s. 4c?. And the effect of this would be in a small 
 degree to increase the outlay, the amount of profits, and the 
 produce. But the principal effect, neglecting inconsiderable 
 fractions, would be that the price of the 600 quarters would be 
 increased by fourpence a quarter, or 10/. ; which will be added 
 to the rent. The corrected rent therefore may be stated at 110/. 
 A further correction might be made by calculating the effect 
 of the small increase of produce last mentioned upon prices, 
 and similar corrections might be extended to an indefinite 
 number ; but their amount would be insignificant. The tax
 
 40 True Theory 
 
 therefore, with the exception of the reaction amounting to 
 10/., is taken from the rent. 
 
 On referring to the case of Taxes on Agricultural Profits 
 it will be readily discerned, how much more prejudicial to ihe 
 consumers would have been the raising of a given sum by a 
 tax of that description, than by a tax on agricultural produce. 
 
 The next Section, which is on ' A Tax upon the Profits of 
 the Farmer, and upon Agricultural Instruments,' concludes 
 that 
 
 ' It would in the first place raise the price of raw produce ; because 
 that price is determined by the produce of the capital which pays no 
 rent, and which, if it sustains a tax, must rise like any other taxed com- 
 modity, to indemnify the producer. 
 
 In consequence of this rise of price, it would increase the rent of the 
 landlords.' Mill. p. 284. 
 
 This is the great aboriginal fallacy, which assigns the pro- 
 duce of the capital that pays no rent, as the regulator of the 
 price of corn, instead of the price being the regulator of the 
 addition that can be made to the capital. There is also the 
 same inattention to the nature of effectual demand, that was 
 formerly noticed. The produce of the capital which pays no 
 rent, if it is to sustain a tax and continue to be. produced, must 
 rise in price to indemnify the producer. But the fallacy is in 
 assuming that it will continue to be produced ; the truth being 
 that the outlay will always stop at the point where the last 
 sum added to it will be returned with a living profit clear of 
 all deductions. 
 
 The real effects of a Tax on the Profits of the Farmer, 
 have been shown under the head of Taxes on Profits. 
 
 ' A tax upon the instruments of agriculture, is the same thing in 
 effect, as a tax upon the profits of the farmer. It raises the value of 
 produce, without affecting the quantity which goes as rent to the land- 
 lord. Not only, therefore, does the whole of the tar fall upon the con- 
 sumer, but he is charged with another burthen, the additional rent which 
 is paid to the landlord. The community is taxed, in part for the use of the 
 government, in part for the benefit of the landlords.' Mill. p. 285. 
 
 If the Tax on Agricultural Instruments is of such a nature 
 that its amount varies in proportion to the magnitude of the 
 produce, it is a tax on produce; and the tax, with the exception 
 of a small effect of reaction upon prices, will be taken out of 
 the rent, with sundry small alterations in outlay, profits, and 
 produce. If the amount does not vary at all with the pro- 
 duce, it is a dead charge upon the cultivator, and will be taken 
 out of the rent without affecting any thing else. If it does 
 something between both, the effects will be of some interme- 
 diate nature, according to the circumstances of the case. 
 
 The next Section is upon ' Tithes and Poor Rates.' 
 
 ' Tithes are a tax upon the produce of the land ; a tenth of the pro- 
 duce, perfectly or imperfectly collected.
 
 of Rent. 41 
 
 The operation, therefore, of this tax, has been already ascertained. 
 It raises the price of produce, and falls wholly upon the consumer.' 
 Mill. p. 286. 
 
 That tithes are a tax upon the produce is clear. The con- 
 sequence therefore will be, that with the exception of a small 
 reaction, they will be taken from the rent; with certain small 
 alterations in outlay, profits, and produce, as before stated. 
 The truth of this or of the opposite representation, depends 
 on the existence or non-existence of a fallacy in the Section 
 entitled ' A Tax on the Produce of the Land.' 
 
 [The great engine of confusion and fallacy on this part 
 of the question, is the introduction of the reaction upon 
 prices and rents, which arises out of the accident of there 
 being land and capital that will be thrown out of activity ; 
 and representing what is true of this small accidental part, as 
 true of the whole. And the way to escape from the effect 
 of this fallacy, is to attend in the first instance to what would 
 have been the consequences, if there had been no such thing 
 as the accident of different qualities of soil and different modes 
 of cultivation ; and to attain to a clear conviction of the in- 
 firmity of the argument, which would represent the existence 
 of this accident as essential to the existence of rent; and 
 then to calculate the real effects of the existence of the 
 accident, without confounding them with what is left unaltered 
 by it.] 
 
 The cheval de bataille of those who believe that taxes on 
 agricultural produce fall on the consumers, is the malt tax. If 
 a tax is laid on malt, the price of beer rises till the tax is re- 
 covered to the dealers; and it would do the same if the tax 
 was laid on barley. What then, they say, so clear, as that 
 the tax falls on the consumers? 
 
 The fallacy here is in bringing forward only half the case. 
 If a tax is laid on barley, the quantity of land laid down with 
 barley will be diminished, in such a manner as according to 
 the guesses of the growers will cause the price to rise to what, 
 after paying the tax, will make it as advantageous to grow 
 barley as any thing else. And though the guesses may be 
 rough and imperfect the first year, they will be better in every 
 succeeding year, and will in the end attain to the greatest 
 exactness that can be desired. But if the price of barley 
 is raised through the quantity grown being diminished, the 
 prices of some other kinds of produce must fall through the 
 quantity grown being increased ; for the land will be employed 
 in growing something else. The land-owners therefore furnish 
 the tax, and iu the first instance recover it from the consumers 
 of barley in the price. But on the other hand they suffer a 
 reduction of the prices of other kinds of produce ; which 
 makes a deduction from their recovery of the tax, and a
 
 42 True Theory 
 
 set-off to the consumers of agricultural produce against the in- 
 creased price paid for the article taxed. The consumers of 
 beer pay a higher price for their barley, and consume less ; 
 but the consumers of wheat or of something else, pay a lower 
 price for what they consume, and consume more. There is 
 some loss of business to maltsters, brewers, and publicans ; but 
 there is an increase of business to millers, bakers, or whoever 
 are the dealers in the articles whose consumption is increased. 
 And as no man lives on beer alone, the tax will be compen- 
 sated, at all events in a certain degree, not only to the consu- 
 mers of agricultural produce in the aggregate, but to every 
 individual consumer of beer also. And if it should turn out 
 in the end, that the aggregate gains of the consumers by the 
 reduction of the prices of other things, are equal to their losses 
 by the rise of barley, or in other words that they have paid 
 the same sum for the whole produce as before, the consu- 
 mers will be just where they were, with the exception of the 
 altered proportions which have been forced upon them, and 
 the land-owners will have furnished the tax without recovery. 
 
 In the absence of taxation altogether, the distribution of 
 the land to different kinds of produce would be regulated by 
 the tendency of individual interests to create such a supply of 
 each kind, as would induce a state of relative prices that made 
 it impracticable for an individual to gain any thing by growing 
 more of one kind and less of some other. The question 
 whether in any particular case the land-owners would receive 
 more or less for the whole produce, after the natural distribu- 
 tion of crops had been altered by a tax on a particular article, 
 is the same as the question whether they would obtain more 
 or less if it were possible for them to alter the natural distri- 
 bution by a combination among themselves; and is one to 
 which a general answer cannot hastily be given. But whatever 
 might be the answer in the case of a tax upon one particular 
 kind of produce by itself, it is clear that if the taxation was 
 extended to all kinds in such a manner as to leave no inducement 
 for altering the relative proportions of different crops, the sum 
 received by the land-owners would be the same as before the 
 tax. For as there would be no inducement to alter the rela- 
 tive proportions, so there would be no general diminution of 
 the growth of all kinds ; because it would be prevented by 
 the absence of sufficient union among the growers, as was 
 shown in demonstrating the impossibility of land-holders re- 
 covering a tax by raising the price of corn. But if the quantities 
 grown were in all respects the same as before, the sums received 
 for them must be the same ; for there is the impossibility just 
 alluded to, that any act or wish of the growers should induce 
 the consumers to give more for a given quantity of produce, 
 than they were obliged to by the competition among them-
 
 of Rent. 43 
 
 selves. The land-owners therefore in such a case, would 
 receive from the consumers in the aggregate, and from every 
 individual consumer also, the same sum for the same produce 
 as before. But if each and all of the consumers paid the same 
 sum for the same produce as before, the consumers would be 
 just where they were, and the land-owners would have fur- 
 nished the tax without recovery. 
 
 In the case of a general tax either ad valorem or in kind like 
 a tithe, the taxation does fall on all kinds of produce so as to leave 
 no inducement for altering the relative proportions ; and con- 
 sequently the landlords will furnish the tax without recovery. 
 Whether, therefore, the loss of the landlords and the com- 
 pensation to the consumers be complete in the case of the 
 taxation of a single article like malt, or not, they are com- 
 plete in the case of a general taxation either ad valorem or in 
 kind like a tithe. 
 
 If, to view the thing in another light, the taxation described 
 is supposed to be extended to the different kinds of produce 
 in succession, each kind will at one period have its price 
 raised and growth diminished in consequence of being taxed 
 itself, and will at other periods be among the kinds whose 
 prices fall in consequence of the increased growth of them 
 which takes place through something else being taxed. In 
 which there is no difficulty in seeing, how the end is to bring 
 the prices and growths of all kinds to what they were at first ; 
 while at every step a levy equal to the new tax, or at least one 
 which in conjunction with all the successive levies is finally 
 equal to the sum of the successive taxes, is made upon the 
 land-owners. 
 
 If the above are the consequences to the land-owners when 
 they keep the land in their own hands, they will equally result 
 when it is let to tenants ; as has been proved before. 
 
 The difference between a tax on barley and a tax on malt, 
 if barley was grown only to be made into malt, which is 
 not very far from being the case, would be that the tax- 
 gatherer would knock at the door of the maltster instead of 
 the grower, and that the grower would deduct the tax from 
 the price paid by the maltster, instead of paying it to the tax- 
 gatherer. And there would further be a small saving to the 
 consumers in the price of malt, in consequence of the maltster 
 not being obliged to advance the tax during the time occupied 
 in converting the barley into malt. 
 
 Another argument brought to prove that tithes fall on the 
 consumers, and which is indeed no other than the theory 
 formerly noticed of an unalterable demand, is, that if a tax 
 or tithe has a tendency to throw a certain belt of land out of 
 cultivation or cause a certain diminution of outlay, and 
 thereby create a diminution of produce, the price must be
 
 44 True Theory 
 
 raised till it makes the produce the same as before, because 
 men cannot go without the produce. And this assumption 
 is probably at the bottom of the frequent introduction that has 
 been made of the subject of demand*. 
 
 The fallacy here, as has been mentioned already, is in the 
 inattention to the nature of effectual demand, and the assump- 
 tion that the produce cannot be diminished. It is not true 
 that men say, ' We must and will have such and such a quan- 
 tity of corn whatever may be the price.' But they say, ' We 
 will have as much as it is more convenient for us to pay 
 for at the price for which the grower will grow it, than to do 
 without.' It is a question of equilibrium, between the incon- 
 venience of paying a high price and the inconvenience of 
 economizing in the use of corn; and whatever may be the 
 laws by which the magnitudes of these two inconveniences 
 severally vary, there must be an equilibrium somewhere, at a 
 point short of consuming the old quantity. That men cannot 
 live without a certain quantity, meaning thereby some quantity, 
 of food is true; but it is not true that men are living on a 
 fixed quantity, which will not be diminished on an increase of 
 price. At the siege of Gibraltar General Elliott ascertained 
 by experiment upon himself, that a man can live on four 
 ounces of food per day. If this is assumed as the smallest 
 quantity on which life can be sustained, it is still, in the first 
 place, not true that the community, or any considerable por- 
 tion of its members, are living on four ounces of food per 
 day ; and secondly, even if it was true, the result of an in- 
 crease of price would be, not that the same quantity of food 
 would continue to be bought by the consumers whatever was 
 the price, but that the population would begin to decrease by 
 all the modes consequent on insufficient food, and that for 
 this decrement there would be no food bought at all. So far 
 from there being any necessity that the same quantity of food 
 shall be bought, it does not even follow that the buyers shall 
 all live to buy. But there is no necessity for pushing the 
 argument to this length. It is sufficient to attend to the fact, 
 
 * This argument is advanced in very plain terms by Mr. M c Culloch. 
 
 ' Suppose no tithes are levied, and that the wheat raised on the poorest 
 ' lands, or with the capital last applied to the soil, and which determines 
 ' the price of the whole crop, yields a sufficient profit to the cultivator, 
 ' and no more, when it sells for 70s. a quarter the price must rise to 77*. 
 ' before the same profit can be obtained after tithes are imposed. In this 
 ' case the tithe cannot possibly occasion any diminution of rent ; for this 
 ' produce pays no rent ; so that if it were not compensated to the culti- 
 ' vators by an increase of prices, they would withdraw their capital from 
 ' cultivation, and the necessary supplies would no longer be obtained.' 
 Supplement to the 4th and 5th Editions of the Encyclopeedia Britannica. 
 Art. TAXATION, p. 629.
 
 of Rent, 45 
 
 that when there is a necessity for the consumption being di- 
 minished because the corn is not there to be consumed, an 
 increase of price is the engine which carries it into effect; a 
 clear proof that increase of price diminishes consumption. 
 
 The real magnitude and effects of the increase of price con- 
 sequent on a tax or tithe, have been shown under the head 
 of ' A Tax upon the produce of the Land.' There will be a 
 certain diminution of produce, which will cause a certain 
 reaction on the price in the way of increasing it ; and this 
 increase of price will cause the diminution of produce to be 
 finally something less than it would have been without it, and 
 make a small deduction from what would otherwise have been 
 the loss of the landlord. But to suppose that it can go the 
 length of destroying the diminution of produce altogether, 
 is like the story of the two cats that ate up each other. What- 
 ever was eaten, there must have been something left to eat it. 
 Whatever may be the effect of the increase of price, there 
 must be some diminution of produce left, to cause an increase 
 of price to exist. The truth therefore is, that there will be 
 a reaction ; but one far short of restoring the produce to its 
 original magnitude, or throwing the tax on the consumers. If 
 the accident of there being land of inferior qualities, and ways 
 of increasing the produce by increased outlay, had not existed, 
 the tax or tithe would have been taken from the land- 
 lords simpliciter. But in proportion to the degree in which 
 the accident exists, there will be a reaction, of small magni- 
 tude, arising from the land and outlay which are of such a nature 
 as to be thrown out of activity by the tax. 
 
 A late publication has been profuse of arguments on the 
 subject of Tithes; and it may be worth while to follow them. 
 
 ' We now come to the important conclusion. This may be stated 
 in a few words. The lowest soil in cultivation pays no rent [to the 
 landlord]. Every soil from which produce is extracted pays tithe 
 [to the clergyman]. Rent therefore [to the landlord], and tithe [to 
 the clergyman] are not identical {Who ever thought they were ?~\, but 
 altogether different. But tithe, not being 1 a portion of the rent of 
 land, [Here shift the meaning of rent, from the net payment to the 
 landlord, to the total residuum left after paying the expenses and ne- 
 cessary profits of the cultivator.] can only be a tax on produce, and 
 in the language of Mr. Ricardo, 'like all taxes on produce falls 
 wholly on the consumer.' WESTMINSTER REVIEW. No. II. p. 413. 
 
 The fallacy here, is manifestly in shifting from one meaning 
 of the word rent to another during the argument*. 
 
 * A still more extraordinary fallacy on the same basis appears in the 
 Supplement to the 4th and 5th Editions of the Encyclopaedia Britannica. 
 
 4 But, independently of these consideration?, the fact that tithes and 
 ' other taxes on raw produce do not form a deduction from rent, but go
 
 40 True Theory 
 
 ' We think, however, that there is a simpler mode of arriving at 
 the same conclusion. 
 
 If tithes are not paid by the consumer, as it is contended, they 
 are portion of the rent of land [that is, of the total residuum left 
 after paying the expenses of cultivation ; not, it may be presumed, of 
 what is left after themselves are paid]. This is admitted. It will 
 also be granted, that every acre in England not specially exempted, 
 whatever it may yield under the name of rent [to the landlord after 
 the tithe is taken}, returns to the clerical incumbent a tithe of its 
 gross produce. It follows, that the lowest possible rent [total re- 
 siduum} of land in England for tithe is [taken out of the} rent by 
 the supposition is a tenth of its gross annual produce. \This is 
 quite true. The tithe will prevent the land from being cultivated, 
 except where nine tenths of the gross annual produce will pay the ex- 
 penses and necessary profits of cultivation ; or where, after the payment 
 of these, there will be a residuum of at least one tenth.~\ If this be the 
 case in England [where there is a tithe~\, it must be so universally, 
 wherever land is appropriated and brought into cultivation [whether 
 there is a tithe or not. Such is the argument J] It is well known that 
 the farmer on the banks of the Ohio, so far from paying a tithe of 
 his produce as rent [either to the landlord or to the tithe-owner], 
 pays no rent at all. The same might no doubt be observed of lands 
 much nearer home. The lowest rent [residuum'] of land, therefore, 
 
 [in places where no tithe is taken,] is not the tithe of its produce 
 Who ever thought it was ?~] ; and [consequently, for such is the 
 argument,] where such a portion is extracted by provision of law, 
 [that is, in places where tithe is taken,'] that portion is not rent of land, 
 but a tax on produce.' WESTMINSTER REVIEW. No. II. p. 413. 
 
 The fallacy here .if the term can be applied, consists in 
 arguing, that tithe is not taken out of the residuum where 
 
 ' to increase the price of produce, is obvious from the circumstance that 
 ' the tithe of expensive crops, and which require a great expenditure in 
 ' their cultivation, frequently amounts to four or five times the rent of the 
 ' land. The Rev. Mr. Hewlett, by far the ablest advocate of tithes, and 
 ' whose authority cannot, therefore, be questioned, informs us that the 
 * tithe of an acre of hops, raised on land worth 40*. or 50s. an acre, is, 
 ' after deduction of drying and duty, generally worth from 31. to 41. ; and 
 ' he further states, that he had known 11. or 8/. paid for the tithe of an 
 ' acre of carrot-seed where the land was not worth 20*. ! In such cases, 
 ' it is plainly as great an absurdity to affirm that tithes fall exclusively 
 ' on the rent of the landlord, as it would be to affirm that a part is 
 ' greater than the whole.' Art. TAXATION. By J. R. MCulloch Esq. 
 p. 630. 
 
 The whole of this is a confusion of ideas arising from the two meanings 
 of the word rent. 
 
 When a tax or tithe is said to form a deduction from rent, this mani- 
 festly means from the rent as it would be without the deduction of the tax, 
 and not as it is after the deduction. 
 
 Nobody ever said that the 8/. whichis the tithe of an acre of carrot-seed, 
 is taken out of the 20*. which is left for the landlord afterwards ; but that 
 it is taken out of the 9/. which is the residuum after paying the expenses 
 and necessary profits of cultivation, and that it is because 8/. is taken for 
 tithe, that only 20*. is left for the landlord.
 
 of Rent. 47 
 
 tithe exists, because tithe is not taken out of the residuum 
 where there is no tithe at all. 
 
 ' Again : Assuming 1 , as before, that tithe is portion of the rent 
 [residuum} ; we will take, for the sake of argument, the case in which 
 the tithe and the remainder of the rent shall together amount to less 
 than a fifth of the gross produce ; or, in other words, in which the 
 portion of rent [residuum] paid under the name of rent [to the landlord], 
 shall be less than the portion paid under the name of tithe [to the 
 clergyman]. Of land in this condition we will suppose two contiguous 
 parcels. Such land will, of course, be all of the same fertility. If the 
 legislature raise the tithe on one parcel to a fifth, [ft is impossible. The 
 whole residuum is not a fifth. The land must cease to be cultivated if it 
 were enacted. It is ordering- Jive quarts to be taken out of a gallon.] 
 but make no alteration on the other, it is plain that from the former 
 parcel the church alone will extract a rent of a fifth of the gross pro- 
 duce ; [ The church will extract nothing at all ; for there will be a stop 
 put to the production altogether, in consequence of the demand being 
 greater than will leave the expenses of cultivation.] whilst from the 
 latter parcel, the landlord and church together will receive something 
 which will be less than a fifth. Here then we should have two parcels 
 of equally fertile land, paying two different rents, at one and the same 
 period ; which is absurd. Tithe, therefore, as before, is not of the 
 nature of rent, but of a tax on produce.' WESTMINSTER REVIEW. 
 No. II. p. 414. 
 
 The fallacy here consists in arguing on what would come 
 to pass, if out of a gallon the legislature should take five 
 quarts. It is John Cade declaring that ' the three-hoop'd 
 pot shall have ten hoops.' 
 
 ' To conclude, if tithe be rent, the American government by im- 
 posing it on the lands in the back settlements, which now yield no 
 rent at all, or a nominal sum which is next to none, may at once 
 create a rent equal to the tenth of the gross produce. Advancing 
 another step, it may create rent to the amount of half, or even the 
 whole of the gross produce a supposition too absurd to be insisted 
 on.' WESTMINSTER REVIEW. No. II. p. 414. 
 
 If the American Government were to impose such a tax, 
 it would put a stop to the cultivation of lands in the back 
 settlements altogether ; with the exception of those where 
 nine tenths of the produce were sufficient to give a living 
 profit to the cultivator. There would be a certain reaction 
 on the price of produce, which would in some degree increase 
 the quantity of land that would be able to resist the tax; but 
 the effect would be in the main to check the cultivation of 
 the back settlements, in the same manner that would result 
 from a diminution of one tenth in the productive powers of 
 nature there. The fallacy therefore, is in supposing that 
 the American government would get the tax, tithe, rent or 
 whatever else it may be called, because it enacted it. 
 
 " Let us suppose," it has been said [by a writer on the opposite 
 side in the Quarterly Review for December, \23, Art. ECCLESIAS- 
 TICAL REVENUES], " that the produce of a given quantity of the least 
 fertile soil, which is said to pay no rent, sells for 401., and that the claim
 
 48 True Theory 
 
 of the tithe-owner now amounting to 41. were abolished, would the 
 whole produce which now sells for 40/., be in that case sold for no more 
 than 36/.? 'Yes,' say the political economists. 'No,' say common 
 sense and experience ; if the 41. now received for tithes ceased to be 
 exacted, another claimant to an equal amount would instantly start 
 up in the person of the landlord." 
 
 This, the writer in the Westminster Review says would be 
 true, if the remission of the tithe was confined to this parti- 
 cular portion of soil, but would not be true if the remission 
 was general. Which is what remains for him to prove. 
 
 'Instead of remitting the tithe of that particular portion, we will 
 suppose it to be remitted universally. The produce of the same por- 
 tion which formerly sold for 40/., would now fetch only 361. 
 
 For : If the capital employed by the farmer on the particular portion 
 of soil referred to in our case were 31/., and the common profits of stock 
 on that sum were 51., he xvould sell his produce for 361. and no more, 
 whether it consisted of 10 quarters or of 9. [He would not ; the com- 
 petition among- the consumers of corn would be such as to enable him to 
 get 401. for the produce as before. And even if the sellers were so dull as 
 not to find this out, there would be a necessity for the price being raised 
 in consequence of the rapid consumption of the stock in hand. Corn sold 
 for 41. a quarter before, because nothing- less than that price would induce 
 the competitors to agree in such a division as would spin out the consump- 
 tion to the needful length ; and the same necessity would exist afterwards. 
 But the landlord will immediately come down on the tenant for 41. in- 
 crease of rent ; or, if he refuses to pay it, find another tenant who will.'} 
 If the whole produce of the land he occupied were 10 quarters, of which 
 he paid one to the parson, he must sell the remaining 9 quarters for 
 361., because he must have the ordinary rate of profits on his capital. 
 [They are not sold for 361. because this is necessary to his having the 
 ordinary rate of profits ; but it is because they can be sold for 361. in con- 
 sequence of the state of the competition, that the tithe-owner or the land- 
 lord can lay hands on the other quarter and still leave him a living- profit.] 
 If the tithe were abolished, and he continued to sell the 10 quarters at 
 the same rate per quarter as he had formerly sold the 9 quarters, his 
 gains would exceed the ordinary profits of stock by the price of the 
 tenth quarter [and therefore the landlord will take advantage of the com- 
 petition among farmers, to take the excess fn,m him in the shape of rent]. 
 This would be speedily corrected by the competition of other growers, 
 [ft would not ; because it is corrected already by the interference of the 
 landlord, and because other growers are in the same situation with respect 
 to their own landlords], which would compel him to reduce his price till 
 he gained no more than the ordinary profits of stock. The 10 quarters, 
 therefore, the whole produce of the particular portion of soil referred 
 to in our case, and which formerly sold for 40/., would now be worth 
 only 36.'.' WESTMINSTER REVIEW. No. II. p. 415. 
 
 The whole of this is a begging of the point at issue ; which 
 is whether the excess will not be taken by the landlord in the 
 shape of rent. Whether it will or not, ascends to the great 
 question concerning the origin of Rent. 
 
 In opposition then to all these arguments, the conclusion is, 
 that Tithes fall on the landlords, but have also a certain effect 
 in preventing the cultivation of poor soils, and diminishing 
 the outlay upon others ; which in return must cause a small
 
 of Rent. 49 
 
 reaction upon price, but one far short of throwing the tax on 
 the consumers. And it becomes of importance to ascertain 
 the magnitude of this last effect, and to compare it with what 
 would have been the result if the support for the clergy had 
 been raised by a tax on the produce of manufactures instead 
 of agriculture. 
 
 In England the waste lands have been estimated at a seventh 
 of the whole. Hence if it may be assumed that the quality of 
 this seventh varies uniformly, from that quality where the ex- 
 penditure of a given sum will return enough to pay the ex- 
 penses with the necessary profits and a ninth of all this besides 
 for tithe, to that where it would produce nothing, the abo- 
 lition of tithes, in calling into cultivation all the land down to 
 that which would return the expenses and profits without the 
 tithe, or furnish nine tenths of what was formerly the lowest 
 produce, wonld call into cultivation one tenth of the waste, 
 and increase the quantity of cultivated land by one sixtieth. 
 And if three quarters of corn per acre is a fair average pro- 
 duce for the whole of the cultivated land in the country, and 
 one quarter per acre for the worst, the produce of the new 
 land called into cultivation by the abolition of tithes would be 
 a hundred-and-eightieth part of what existed before. 
 
 Again, the rents in England are supposed to be in the ag- 
 gregate a third of the produce. Hence the case so often as- 
 sumed as an example, with corn at 55*., is not very far 
 from an average case. And in it, the diminution of produce 
 consequent on the reduced outlay arising from a tax of one 
 tenth or a tithe, would be less than the three-hundredth part. 
 Adding therefore this effect to the other, the whole diminution 
 of produce effected by tithes in England, supposing them to 
 be universal, may be estimated at less than the hundred-and- 
 twelfth part. 
 
 The value of the whole annual produce of agriculture in 
 Great Britain, compared with that of manufactures, has been 
 estimated as being as one to three. If then the support of 
 the clergy were to be raised by a tax on the produce of ma- 
 nufactures instead of agriculture, the tax must be a third of 
 a tithe, or 3| per cent. And the consequence of this would 
 be, in addition to the tax being paid by the consumers, to 
 cause a gratuitous loss or prevention of production, which, if 
 10 per cent may be assumed as the average rate of manu- 
 facturing profits, would be equal to ten elevenths of 3l per 
 cent on the whole amount of goods manufactured. And the 
 value of this, would be to the value of the hundred-and- 
 twelfth part of the agricultural produce, which is what is sup- 
 posed to be kept out of existence by the system of tithe, as 
 -r^. x $ x v x 3, to 1 divided by 112 ; or as -rV to TTT, or 
 something more than 10 to 1; an inequality not to be got 
 
 E
 
 50 True Theory 
 
 over by any conceivable inaccuracy in the numerical assump- 
 tions. In which it is remarkable, that the result is indepen- 
 dent of the comparative values of the agricultural and manu- 
 factured produce, and will be the same whatever is their pro- 
 portion. The explanation of which is, that if the manufac- 
 tured produce is less, a greater portion of it must be taken. 
 
 Hence the real state of the charge against tithes is, first, 
 that the tax, with the exception of a trifling reaction, is paid 
 by the landlords instead of being paid by the consumers as 
 would have been the case if it had been levied on manufac- 
 tures ; and secondly, that there is a saving of more than nine 
 tenths of the loss or prevention of production which would 
 have taken place by the other mode. When tithes are as- 
 serted to be a peculiarly pernicious and impolitic mode of tax- 
 ation, these facts are always kept out of sight. The proof of 
 the assertion falls to the ground upon examination, like the 
 proof of many other popular outcries. As the woodpecker, 
 the rook, and the goatsucker, have been persecuted time out 
 of mind for imaginary injuries, so the ecclesiastical rook has 
 been charged with collecting his subsistence in a manner pe- 
 culiarly injurious to the public, through clear ignorance or 
 concealment of the nature of the process. Some species of 
 commutation might possibly be better still. But it is plain 
 that the extended outcry has been made either through igno- 
 rance, or a desire to direct the hostility of the community to 
 a particular quarter by misrepresentation. 
 
 If a tax or tithe should be remitted on a certain portion of 
 the land, the effect would be the removal of something ap- 
 proaching to a proportionate part of the consequences that 
 resulted from the tax. For example, if the tithe in England, 
 provided it were universal, would diminish the whole pro- 
 duce by the hundred-and-twelfth part, and if this would in- 
 crease the price of corn by sixpence a quarter, the effect 
 of the remission of tithe on an average third of the land would 
 be, that the produce of the country would be increased by 
 something not far from a third of a hundred-and-twelfth 
 part, and the price of corn fall by about twopence a quarter. 
 And the value of the tax remitted, with the exception of the 
 reaction produced by these petty alterations, would go into the 
 pockets of the landlords. For it is evident that this would 
 be the result if the land-owners held the land in their own 
 hands. It could make no difference in the prices in the 
 market, whether corn was sold there for the benefit of the 
 tithe-owner or the grower. If the tithe-owner could eat all 
 his corn himself, the case would be different ; but as it is, the 
 same quantity of corn must be brought to market, and conse- 
 quently be sold for the same price. And of this price, the 
 whole that is left after paying the necessarv profits of the ca-
 
 of Rent. 5L 
 
 pital employed, would be rent. These seem to be all the 
 effects that arise from a partial remission of the tax*. 
 The next subject is that of Poor Rates. 
 
 ' If the poor rate were levied in proportion to profits upon farmers, 
 manufacturers, and merchants, it would be a tax upon profits. If &c. 
 But if a separate tax is laid upon the farmers, we have already seen 
 that it operates immediately to raise the price of corn sufficiently high to 
 afford them compensation for the tax, and raises the rent of the landlords. 
 It is to them a benefit, not a burthen.' Mill. p. 286. 
 
 The reasons for opposing the conclusion marked in italics, 
 have been formerly stated, 
 
 A poor rate is commonly levied iu proportion to the rent. 
 In the case, therefore, of a land-owner uniting the characters 
 of landlord and cultivator, it would be simply a tax on rent, 
 and would alter nothing else. And the same will take place 
 when the characters are divided. 
 
 If a poor rate was levied in proportion to profits or to pro- 
 duce, it would be a tax on profits or on produce, and its ef- 
 fects will be found under those heads. 
 
 The Section on ' A Tax per acre on the Land ' infers, 
 that if the tax was levied only on cultivated land 
 
 ' Such a tax would raise upon the consumers, not only so much per 
 acre to the government, but a great deal more for the benefit of the 
 landlords.' Mill. p. 290. 
 
 and it founds this upon the former argument, that there is a 
 portion of capital employed upon the land, the return to ^yhich 
 is sufficient to afford the ordinary profits of stock, but nothing- 
 more, and that 
 
 * In an Article on the Corn Laws in No. 88 of the Edinburgh Review, 
 some inferences on the effect of tithes are presented as derived from the 
 fact of the impost being of partial application. 
 
 ' it is obvious that the price of corn must have been regulated by the 
 ' price for which it can be raised on the last lands cultivated that are free 
 'from tithe, and not for what it could be raised for on the last lands 
 ' cultivated that are subject to that charge. It appears, therefore, &c.' 
 
 Corn can be raised on the sand above high-water mark, if any body 
 chuses to do it in defiance of the loss ; but it is clear that it is not meant 
 to say that this corn would regulate the price. What is meant therefore 
 must be, that the price of corn has been regulated by the price for which 
 it can be raised on the last lands cultivated with a living profit at the 
 going price. In other words, that the price has been regulated by the 
 price ; which is reasoning in a circle. 
 
 If it is urged that the price is regulated by the necessity, this necessity 
 has no organ for expressing itself but through the price. Which makes 
 the circle as before. 
 
 The whole is in fact the fallacy of inversion noticed under the Theory 
 of Rent. The price of corn is neither regulated by on'-, of the things 
 mentioned nor by the other; but the state of competition first settles 
 what shall he the price in proportion to the quantity in the market, and 
 the price determines the quality of land on which it is worth while to 
 grow corn, in tithed lands and tithe-free respectively. And no difference 
 will be made to the consumers, by tithe being taken or not taken ; 
 except the slight alterations in produce and price which have been stated. 
 
 E 2
 
 52 True Theory 
 
 ' If any addition is made to the cost of producing 1 , a rife of price must 
 afford compensation.' p. 288. 
 
 The fallacy of this, as before stated, is in supposing that 
 this portion of capital will cf necessity continue to be employed. 
 
 Bv application to the case of a land-owner uniting the 
 characters of landlord and cultivator, it is plain that a tax per 
 acre on the land, whether co^fi^ed to cultivated land or not, 
 will be taken from the landlord. In cases where the tax per 
 acre should be greater than the rent, the landlord, if he could 
 escape the tax by it, would keep the land out of cultivation, or 
 even disown it altogether. But if he cannot by either of these 
 means escape the tax, he will have no resource but to get all 
 the rent he can, and make up the tax out of his own pocket. 
 
 To recapitulate, The Theory of Rent with its adjuncts is 
 proved to be fallacious, First, By the irrationality of the con- 
 clusion that what it assigns as the cause is the cause ; as de- 
 monstrated by the application of a similar conclusion in other 
 cases ; and Secondly, By the results being contradicted by the 
 evidence of experiment. The theory says, that no rent should 
 be paid where land is of a uniform quality and the art of 
 forcing crops is unknown. The palpable fact is, that a heavy 
 rent is paid in countries lying under precisely these circum- 
 stances. The theory says, that landlords lose rent by turnips 
 and drill husbandry. Landlords quietly do all in their power 
 to encourage both. The theory says, that taxes on agricul- 
 tural produce are shifted on the consumers. Landlords and 
 tenants both know, that no power on earth can induce the 
 consumers to give more for a given quantity of corn than the 
 competition obliges them to do. The theory says, that taxes 
 on the farmer's profits, and on his instruments of agriculture, 
 raise rent. Landlords know, that they pay for them out of the 
 rent. The theory says, that rent is made higher by poor rates. 
 Landlords know, that it is as snow by sun-shine. The theory 
 says, that a land-tax raises a sum on the consumers for the 
 benefit of the landlords. Landlords are so dull, as never yet 
 to have voted for a land-tax but under the pressure of ne- 
 cessity. When the measure of the truth of a theory shall be 
 the hostility of its results with experiment, this theory may be 
 believed on argument. Till then, it must be believed because 
 it is a convenience to have the labouring classes told, that the 
 clergy are supported out of the price of bread *. 
 
 * [The Westminster Review has replied to the objections made to its 
 conclusion upon tithes, by saying that ' they are not corollaries from the 
 ' doctrine advanced on rent, but from a peculiar and altogether erro- 
 ' neous opinion on profits, which are conceived to be regulated, like 
 ' wages, by the, proportion between numbers and demand.' WEST- 
 MINSTER REVIEW, No. XIII. p. 179, Note.] 
 
 [A reference to pages 25 28 mil be civ. ugh to show, that no such 
 opinion has been advanced on profits at all. What is advanced is, that
 
 of Rent. 53 
 
 The theory of ' No General Glut' is in a certain degree 
 connec^d with the rest. 
 
 ' Every commodity is always, at one and the same time, matter of 
 demand, and matter of supply. Of two men who perform an ex- 
 change, the one does not come with only a supply, the other with 
 only a demand ; each of them comes with both a demand and a supply. 
 The supply, which he brings, is the instrument of his demand ; and 
 his demand and supply are of course exactly equal to one another.' 
 Mill. p. 232. 
 
 This is the rhythm of an argument, without the substance. 
 The fallacy lies in assuming that the demand and the supply 
 are equal. The supply of every individual is the source of his 
 demand, the storehouse from which his demand is taken ; 
 but it is not his demand. Nobody ever doubted that the por- 
 tion of an individual's supply which he succeeds in exchanging 
 with a living profit, is the instrument of his demand ; but the 
 question was, whether he might not have a further portion 
 behind, which he could not exchange, or could not exchange 
 with a living profit. The sportsman's charge of shot is the 
 instrument of his demand upon the covey ; but it by no means 
 follows that his demand upon the covey shall be equal to his 
 charges of shot. 
 
 It seems to be abundantly clear, that if the manufacturing 
 capitalists, who now demand a profit of, it may be, ten per cent 
 on the capital they advance, and consider it as only a living 
 profit, could be persuaded to advance it for four, their goods 
 would be offered at a less price, and a greater quantity would 
 from time to time be manufactured and sold. And if they 
 could be induced to advance capital with no profit at all, a 
 still greater increase of sales might take place. And it might 
 be greater still if, for argument's sake, it were possible that 
 they should consent to advance capital at four per cent loss. 
 
 they are not regulated by the proportion between numbers and demand, 
 but ' the force of opinion and habit ' regulates the rate of profit neces- 
 sary for living in the way which society pronounces to be respectable, 
 and this regulates the number of traders, the excess being withdrawn 
 by bankruptcy.] 
 
 [The statement that what has been said of rent had moreover been 
 said previously, and much more clearly, in No. 50, p. 475-6 of the Quar- 
 terly Review, is no answer to any thing ; and is scarcely worthy of men 
 professing to search after truth. There was no question about who had 
 said it, but whether they could answer it. The difference of clearness 
 cannot be much, for the sentences into which the argument is collected 
 are almost the same ; as may be seen by comparing Quarterly Review, 
 No. 50, p. 476, line 5 16, with the similar passages in the 'True Theory 
 of Rent.' And as this took place without a knowledge of the existence 
 of the parallel investigation, it is to a certain degree evidence of the 
 accuracy of both.] 
 
 [The best thing the Westminster Reviewers could do, would be to 
 come over to the truth. If they will not, the truth will not come over to 
 them. They had better confess at once, that ' Fleas are not lobsters ;' 
 even though they should be unable to restrain the curse that followed it.]
 
 54 True Theory 
 
 Bv the converse of the argument it seems equally clear, that 
 if the capitalists, from any cause whatever, proceed to manu- 
 facture at any of the increased rates severally specified above, 
 the quantity of goods from time to time produced will be such as 
 could only be sold with a profit of four per cent, or with none, 
 or with a loss of four per cent, respectively ; and consequently 
 such as it is impossible to sell with a living profit, when the 
 living profit is ten per cent. The progress, therefore, of their 
 attempt to manufacture these increased quantities, must be 
 checked by the accumulation of what it is impossible to sell 
 with a li\ing profit, and the withdrawing of a portion of the 
 producers by bankruptcy. 
 
 All that remains to be accounted for, is why, in a given 
 state of manufacturing skill, all the manufacturers and shop- 
 keepers in the country do not make and sell more than they 
 actually do; as, for instance, ten times as much. And here 
 it will be found, that there is an ultimate reference to corn. 
 For if they were to attempt such an increase, they must 
 proceed to create a labouring population approaching to 
 ten times the present number; because when a man is working 
 twelve hours a day already, it is in vain to think of making 
 him work ten times as much. And whether they set about 
 effecting this increase by the shortest road, which would be 
 by the introduction of adult workmen from other countries, 
 or waited for the slower progress of population at home, it 
 is clear that they must commence by advancing in the shape 
 of wages the means of obtaining a supply of corn, which, first 
 or last, is to amount to something like ten times the present 
 supply. But since no prices could have the effect of making 
 our agriculturists produce a tenfold supply, the projectors 
 must, to use a maritime phrase, be brought up by the impos- 
 sibility of furnishing what would procure the corn required 
 to go on. Hence if they persisted in the attempt to furnish it, 
 they would first discover that their profit was being eaten up 
 in the contest, next that it was nothing, and next that they 
 were continuing the struggle at a ruinous loss. The secret 
 therefore lies in the slowness of the increase of the produce of 
 land, compared with the increase of manufactures which might 
 otherwise be created to tempt the agriculturists withal. It 
 would be easy to double the quantity of goods manufactured, 
 if the offer of them would teach the agriculturists to produce 
 food for two men where they produce for one now, and leave 
 a certain rate of profit for the manufacturing capitalists be- 
 sides. But as it is impossible for this to take place, there 
 must be a point where the increase of manufactures must stop. 
 
 There is then, in any given state of manufacturing skill and 
 of the supply of corn, a certain quantity of all kinds of manu- 
 factures which can be produced and sold with a living pro-
 
 of Rent. 05 
 
 fit. And if more are produced, they cannot be sold with a 
 living profit ; and this is a General Glut*. 
 
 It is not true that there would be no glut, if there was only 
 less of one kind of manufactures and more of some other. The 
 cause of the glut extends to all kinds, and cannot be remedied 
 by altering their proportions. 
 
 All manufacturers, if not restrained by foresight of the con- 
 sequences, have the power of increasing their individual pro- 
 duce without reference to what can in the aggregate be finally 
 sold with a living profit. They can do it through the opera- 
 tion of one agent, credit; by which is meant the practice of 
 selling goods for the promise of future payment. There is 
 no man of moderate respectability, who could not through 
 this agency double his rate of manufacturing from the present 
 moment till he appeared among the bankrupts in the Gazette, 
 if he chose to take the consequences. Many foresee the con- 
 sequences and avoid ; some do not, and so create a glut. 
 And this tendency to plethora is kept down from time to time 
 
 * It does not seem to be very clear, whether the supporters of the 
 impossibility of a General Glut intended to include corn under the 
 term commodity, or not. If they did, it is only another form of the 
 fallacy which consists in assuming that all kinds of production are 
 alike. 
 
 If corn had been ever so distinctly included, it would still have been 
 untrue that there could be no general glut. For under any imagi- 
 nable state of the trade in corn, there might arrive a period when 
 the quantity of manufactures and manufacturers would press against 
 the quantity of food ; and then the possibility of a general glut would 
 ensue. 
 
 The strong peculiarity attending the production of corn and raw 
 produce in general, is, that by the constitution of nature the facility of 
 increasing the production diminishes with the quantity produced, in a 
 way which does not take place in the operations performed on raw 
 produce by manufacturing industry. A certain quantity of the labour 
 of a husbandman produces a quarter of corn ; and a certain quantity 
 of the labour of a manufacturer turns a halfpenny-worth of iron ore 
 into a watch-chaiu of great beauty and value. But there is this re- 
 markable difference between the operations ; that if the labour of two 
 individuals were to be employed in making watch-chains where one was 
 employed before, two watch-chains would be produced instead of 
 one ; but if the labour of two individuals were to be employed in 
 producing corn where one was employed before, the result would 
 by no means be the production of two quarters instead of one ; for the 
 constitution of nature by which the quantity of raw produce increases 
 more slowly than the quantity of labour applied, would intervene. 
 
 It is not true therefore, that the difference between agriculture and ma- 
 nufactures, is only that one is the application of industry to one kind of 
 produce and the other to another. But there is a great and substantial 
 difference arising out of the fact, that manufactures are the applica- 
 tion of industry in a direction where the produce varies as the labour 
 applied, and agriculture where it does not. 
 
 If the labour of two individuals would, produce two quarters of corn 
 where there was one before, as it will produce two watch-chains, it 
 might be conceded that there could be no General Glut.
 
 56 True Theory 
 
 by evacuations in the Gazette ; which do not however take 
 place with perfect continuity, any more than a bleeding at 
 the nose is spread over every minute of every hour ; but ap- 
 pear by fits and starts, as circumstances direct the eruption 
 of the process. There appears therefore reason to believe, 
 that the habit of giving credit, which in earlier stages of society 
 may be a useful stimulant, is in more advanced states a prin- 
 cipal agent in producing something like a periodical return 
 of commercial distress. 
 
 Agriculturists have also the power of making a mistake in 
 the calculation of the last sum which can be added to the 
 outlay so as to be returned with a living profit; and they 
 doubtless do so occasionally in a certain degree. But the ef- 
 fects of such a mistake are confined to a comparatively incon- 
 siderable sum, and are consequently of insignificant amount ; 
 which is the reason why little is ever heard about cultivation 
 being carried to a ruinous extent. 
 
 There remains a subject which it is necessary to go through 
 
 con volto ne torbido, ne chiaro 
 
 protesting against any inferences from the limitation of the 
 commentary. 
 
 ' Every body knows the fact, that in the greater number of coun- 
 tries, the population is stationary, or nearly so. But what does this 
 prove, so long as we are not informed, by what causes it is pre- 
 vented from increasing ? We know well, that there are two causes, 
 by which it may be prevented from increasing, how great soever its 
 natural tendency to increase. The one is poverty; under which, 
 let the number born be what it may, all but a certain number un- 
 dergo a premature destruction. The other is prudence ; by which 
 either marriages are sparingly contracted, or care is taken that chil- 
 dren, fieyond a certain number, shall not be the fruit.' 31511. p. 50. 
 
 'There are two modes in which artificial means may be employed to 
 make population and capital keep pace together : expedients may besought, 
 either to restrain the tendency <>f population to increase ; or to accelerate 
 beyond its natural pace the increase of capital.' Ib. p. 57. 
 
 ' The result to be aimed at is, to secure to the great body of the 
 people all the happiness tehich it capable of being derived from the 
 matrimonial union, without the evils u-hich a too rapid increase of their 
 numbers involves. The progress of legislation, the improvement of 
 the education of the people, and the decay of superstition, will, in time, 
 it may be hoped, accomplish the difficult task of reconciling these im- 
 portant objects.' Ib. p. 58. 
 
 'If we may, thus, infer, that human happiness cannot be secured 
 by taking forcible methods to make capital increase as fast as po- 
 pulation ; and if, on the other hand, it is certain, that where births 
 take place, more numerous than are required to uphold a popula- 
 tion corresponding to the state, of capital, human happiness is 
 impaired, it is immediately seen, that the grand practical problem is, 
 To find the means of limiting the number of births.' Ib. p. 65. 
 
 ' If Mr. Owen means that population should not go on, and if expe- 
 dients can be employed to limit sufficiently the number of births, there 
 is no occasion for these [Mr. Owen's] establishments.' Ib. p. 67. 
 
 What is it ' the new school of political economy' would be
 
 of Rent. 57 
 
 at ? And where is it that superstition above all things, inter- 
 feres with their wishes ? It cannot be unfair to allow the 
 writer to explain himself, by extracts from others of his ac- 
 knowledged works. 
 
 ' It is perfectly evident, thai, so long 1 as men are produced in greater 
 numbers than can he fed, there must be excessive misery. What is 
 wanted then is, the means of preventing mankind from increasing so 
 fast ; from increasing faster than food can be increased to support 
 them. To the discovery of these means, the resources of the human 
 mind should be intensely applied. This is the foundation of all im- 
 provement. In the attainment of this important end, it is abundantly 
 plain that there is nothing impracticable. There is nothing which 
 offers any considerable difficulty, except the prejudices of mankind.' 
 Supplement to the 4th and 5th Editions of the Encyclopaedia Britannica. 
 Art. BANKS FOR SAVINGS, p. 93. 
 
 ' As the tendency in population to increase faster than food, produces 
 a greater number of individuals than can be fed, as this is the grand 
 parent of indigence, and the most prolific of all the sources of evil to 
 the labouring portion of mankind, take all possible means for prevent- 
 ing so rapid a multiplication ; and let no mere prejudice, whether reli- 
 gious or political, restrain your hands in so beneficent and meritorious 
 an undertaking. It would be easy to offer suggestions on this head, if we 
 were not entirely precluded from going into detail. It is abundantly eji- 
 dent, in the mean time, that indirect methods can alone avail ; the 
 passions to be combated cannot be destroyed, nor, to the production of 
 effects of any considerable magnitude, resisted. With a little ingenuity 
 they may, however, be eluded, and, instead of spending themselves in 
 hurtful, made to spend themselves in harmless channels. This it is the 
 business of skilful legislation to effect.' Tb. Art. BEGGAR, p. 246. 
 
 ' What are the best means of checking the progress of population, 
 when it cannot go on unrestrained without producing one or other of 
 two most undesirable effects, either drawing an undue proportion of 
 the population to the mere raising of food, or producing poverty and 
 wretchedness, it is not now the place to inquire. It is indeed, the most 
 important practical problem to which the wisdom of the politician and 
 moralist can be applied. It has, till this time, been miserably evaded by 
 all those who have meddled with the subject, as well as by all 
 those who were called upon by their situation to find a remedy for 
 the evils to which it relates. And yet, if the superstitions of the nursery 
 were discarded, and the principle of utility kept steadily in view, a solu- 
 tion might not be very difficult to be found ; and the means of drying up 
 one of the most copious sources of human evil, a source which, if all 
 other sources of evil were taken away, would alone suffice to retain the 
 great mass of human beings in misery, might be seen to be neither 
 doubtful nor difficult to be applied.' Art. COLONY, p. 261. 
 
 It may occur to some readers, that abstinence from mar- 
 riage is the remedy intended. But this is inconsistent with 
 the data ; as will be proved by going through the passages 
 marked with italics in the extracts. For ' marriages to be spar- 
 ingly contracted,' is one way ; but to ' take care that children, 
 ' beyond a certain number, shall not be the fruit,' is another. 
 Abstinence from marriage cannot be termed either ' artificial 
 means,' or ' expedients.' The plan is ' to secure to the great 
 ' body of the people all the happiness which is capable of be- 
 ' ing derived from the matrimonial union,' though 'without
 
 58 True Theory 
 
 1 the evils which a too rapid increase of their numbers in- 
 ' volves;' which is something quite different from abstinence 
 from marriage. What is found to oppose the plan, is 'super- 
 stition ;' and superstition was never understood to be opposed 
 to abstinence from marriage. The evil of improvident mar- 
 riages has long been known ; but nobody ever entered before 
 on ' the grand practical problem' of 'limiting the number 
 ' of births' without diminishing marriages, by means of 'ex-' 
 ' pedients.' The thing is stated to be easy, if it were not 
 for the ' prejudices of mankind,' religious among others ; and 
 religious prejudices never hindered abstinence from marriage. 
 ' It would be easy to offer suggestions on this head,' but there 
 is something that ' precludes from going into detail.' There is 
 nothing to prevent the going into detail to the utmost, on 
 the subject of abstinence from marriage. The passions, it 
 is declared, are not proposed to be 'resisted;' but they are 
 to be ' eluded,' and made to ' spend themselves in harmless 
 channels.' Of all the occupations in vented for skilful legislators, 
 assuredly that here proposed is the oddest. The question, it 
 is affirmed, has hitherto 'been miserably evaded ;' yet all 
 has been said on abstinence from marriage, that can be said. 
 If the superstitions of the nursery were discarded,' the 
 solution might be found ; and assuredly there are no nursery 
 superstitions on the subject of abstinence from marriage. 
 
 It would be a painful thing to load any sect or school with 
 a disagreeable misconstruction ; but if any thing like it should 
 happen in the present case, the aggrieved have a ready remedy, 
 which is, to explain what it is they do mean. Men are 
 not always obliged to prove a negative ; but when cir- 
 cumstances of reasonable suspicion have arisen out of their own 
 act, the most innocent persons on earth must either do so, or 
 remain under the imputation. There is no use in pretending 
 not to know, what has been disseminated in full and dis- 
 gusting detail by the instrumentality of the press *. It is sub- 
 
 * To describe it as nearly as is easily practicable, it was an appeal to 
 the doctrines of political economy on the evils of a redundant popula- 
 tion, concluding with a detail of 'expedients' for procuring abortion 
 in an evanescent period by mechanical means ; or to define it with more 
 accuracy in the words of the extract, for procuring 1 ' the happiness 
 capable of being derived from the matrimonial union,' without 
 'children being the fruit.' It was printed in two different forms; 
 and possibly in more. One was of a superior type and paper, in general 
 appearance resembling the hand-bills of fashionable venders of perfu- 
 mery; and, as might be gathered from the circumstances of the indivi- 
 dual case, was distributed anonymously by the twopenny post. The 
 other was in the manner of the lowest order of quack advertisements 
 which are thrust into the hands of passengers at Temple Bar; and was 
 apparently for distribution among the labouring classes. It was stated in 
 some of the public prints of the time, that tailors were the class among 
 whom the plan found its principal supporters, and that the progress of 
 the sect was stopped by a threat of public prosecution.
 
 of Rent. 59 
 
 mitted, without violence or exaggeration, to the judgment of 
 unprejudiced persons, whether in the absence of explanation, 
 the passages extracted do not necessarily lead to the con- 
 clusion, that ' the new school of political economy' intended 
 what is alluded to above. 
 
 It may appear questionable to some, whether it is right to 
 bring such a subject into notice. The objection would be 
 valid, if the matter was really drawn out of obscurity. But 
 when a theory has been published in Encyclopaedias, recom- 
 mended in octavos, dispersed in detail by the press, and urged, 
 as cannot be doubted, on the acceptance of every new insti- 
 tution for purposes of education, to the extent of what the in- 
 fluence of the propounders can effect, this objection seems 
 to be gone by, and nothing is left but to examine the theory 
 on the grounds, first of morality, and secondly of its adaptation 
 to the attainment of the end proposed. And on the first of 
 these, it may be conceded to the fullest extent, that the ques- 
 tion shall stand solely on ' the principle of utility,' or the effect 
 on the general happiness. What, then, is to be the situation 
 of the women of the lower and middle classes, when in every 
 street political economists go about seeking whom they may 
 devour, under the assurance that they bring with them the 
 ' expedients' for evading the ordinary consequences of sexual 
 irregularity ? And what will be the purity of the wives and 
 daughters of the higher classes, when in every room the foot- 
 men are neighing after the chambermaids under assurances of 
 like impunity? There is difficulty enough in keeping the pas- 
 sions of mankind in a state of decent repression, with all the 
 existing checks on their irregular exhibition ; and what is to 
 be the case when one of the strongest checks, the fear of con- 
 sequences, is removed ? Society may and must struggle, with 
 so much of men's passions as are connected with the great 
 operations of nature and the continuation of the species; but 
 it has long agreed to rid itself of the intolerable nuisance of 
 struggling with any others, by referring them to a class of crimes 
 which it is not usual to describe except by omitting to name. 
 
 And next for its adaptation to the end proposed. And 
 here it is plain, First, that as long as such expedients are not 
 universal in the classes where population is proposed to be 
 repressed, their adoption by one will only make room for the 
 natural use of marriage by another, and consequently the re- 
 duction of population will be nothing. Secondly, that the 
 ultimate effect must be the same as that of the permission of 
 infanticide ; which is well known to end in increasing the 
 density of population, through men's entering into marriage 
 with some view to the practice while it is at a distance, and 
 shrinking from it afterwards. 
 
 [To the first of these it will perhaps be objected, that the 
 same reasoning would demonstrate the inutility of moral
 
 60 True Theory of Rent. 
 
 restraint. But there is this wide difference ; that moral 
 restraint, meaning the determination to abstain from even 
 legitimate indulgence until a certain degree of provision has 
 been made for the support of a family, is capable of being 
 extended, and actually does extend, in a certain degree, to all 
 the individuals in the classes concerned, or at all events to so 
 great a proportion of them that the exceptions are insignificant. 
 For all efforts to extend the influence of moral restraint, tend, 
 either by the influence of example or otherwise, to produce an 
 effect of some magnitude or other on all the individuals of the 
 community, even the least compliant; or at all events the 
 number of recusants is finally inconsiderable. And it may 
 readily be conceded, that moral restraint does only operate, 
 by that portion of it which is finally extended to all the mem- 
 bers of the class concerned, or to so nearly all, that the recu- 
 sants are unable to prevent the ultimate effect. But widely 
 different from the case of moral restraint, is that of the expe- 
 dients here supposed. They are incapable of degree ; for 
 they must either be employed entirely, or let alone entirely. 
 And they are so revolting in themselves, that it is impossible 
 that their influence can extend to all, or to any thing like all ; 
 and consequently any effect in diminishing population which 
 may be produced by them in one direction, must be compen- 
 sated by the invitation held out to it in some other.] 
 
 It is impossible not to notice the contrast presented by the 
 purity, and even elegance, of the author of the great dis- 
 coveries on the subject of Population. Virginibus puerisque 
 canto may, as far as the spirit of the author is concerned, be 
 written on every page of the work of Mr. Malthus ; and his 
 illustrations, such as those of ' the tree with its branches and 
 foliage,' and ' the sunny spot in man's whole life where his 
 imagination loves to bask,' are the very poetry of science. 
 
 Though the instructors of youth are not bound to enter 
 into the actual confutation of every unseemly error that men 
 may fall into, enough has been said to show the importance 
 of bringing the pursuits of political economy within the pale 
 of academical education. When such efforts are made to 
 teach the new mumpsimus, the least the universities can do is 
 to teach the old sumpsimus. As long as the accredited guar- 
 dians of learning stand aloof from a branch of science pecu- 
 liarly adapted for the exercise of cultivated reason, it necessa- 
 rily falls into the hands of those who have less power to dis- 
 tinguish fallacies, and less caution to avoid them. 
 
 THE END. 
 
 C. WOOD & SON, Printera, Poppin's Court, Fleet Street. 
 
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