'This excess is rent.'84He proceeds to expound his doctrine by comparing land to a set of machines for ****** corn.85If,in manufacture,a new machine is introduced every one adopts it.In agriculture the worst machines have still to be used;and those who have the best and sell at the same price,can appropriate the surplus advantage.This,he declares,is a law 'as invariable as the action of the principle of gravity.'86Yet Smith and others have overlooked a 'principle of the highest importance'87and have failed to see that the price of corn,as of other things,must conform to the cost of production.The same doctrine was expounded in the same year by Sir Edward West;88and,as it seems to me,more clearly and simply.West,like Malthus,says that he has to announce a principle overlooked by Adam Smith.This is briefly that 'each equal additional quantity of work bestowed on agriculture yields an actually diminished return.'He holds that profits fall as wealth increases,but he denies Adam Smith's view that this is a ****** result of increased competition.89Competition would equalise,but would not lower profits,for 'the productive powers of manufactures are constantly increasing.'In agriculture the law is the opposite one of diminishing returns.Hence the admitted fall of profits shows that the necessity of taking inferior soils into cultivation is the true cause of the fall.
Such coincidences as that between Malthus and West are common enough,for very obvious reasons.In this case;I think,there is less room for surprise than usual.The writer generally credited with the discovery of the rent doctrine is James Anderson,who had stated it as early as 1777.90The statement,however,did not attract attention until at the time of West and Malthus it was forced upon observers by the most conspicuous facts of the day.Adam Smith and other economists had,as Malthus notices,observed what is obvious enough,that rent in some way represented a 'net produce'--a something which remained after paying the costs of production.So much was obvious to any common-sense observer.In a curious paper of December 1804,91Cobbett points out that the landlords will always keep the profits of farmers down to the average rate of equally agreeable businesses.This granted,it is a short though important step to the theory of rent.The English system had,in fact,spontaneously analysed the problem.The landlord,farmer,and labourer represented the three interests which might elsewhere be combined.Prices raised by war and famine had led to the enclosure of wastes and the breaking up of pastures.The 'margin of cultivation'was thus illustrated by facts.Farmers were complaining that they could not make a profit if prices were lowered.The landed classes were profiting by a rise of price raised,according to a familiar law,in greater proportion than the deficiency of the harvest.Facts of this kind were,one must suppose,familiar to every land-agent;and to discover the law of rent,it was only necessary for Malthus and West to put them in their natural order.The egg had only to be put on its end,though that,as we know,is often a difficult task.When the feat was accomplished consequences followed which were fully developed by Ricardo.
NOTES:
1.Mr James Bonar's Malthus and his Work (1885)gives an admirable account of Malthus.The chief original authorities are a life by Bishop Otter,prefixed to a second edition of the Political Economy (1831),and an article by Empson,Malthus's colleague,in the Edinburgh Review for January 1837.
2.Political Justice (3rd edition,1798),ii,bk viii,chap.ix,p.514.
3.Wallace wrote in answer to Hume,A Dissertation on the Numbers of Mankind in Ancient and Modern Times (1753),and Various Prospects of Mankind,and Nature and Providence (1761).Godwin refers to the last.
4.Political Justice ,ii,520.
5.Ibid.ii,528.
6.First published in 1795,after the first edition,as Godwin remarks,of the Political Justice .
7.Ami des hommes (reprint of 1883),p.15.
8.Ami des hommes ,p.26.
9.See the curious debate in Parl.Hist .xiv,1318-1365.
10.The seventh edition of Price's Observations on Reversionary Payments ,etc.(1812),contains a correspondence with Pitt (i,216,etc.)The editor,W.Morgan,accuses Pitt of adopting Price's plans without due acknowledgment and afterwards spoiling them.
11.Essay on Population ,p.18.In Observations ,ii,141,he estimates the diminution at a million and a half.Other books referring to the same controversy are Howlett's Examination of Dr.Price's Essay (1781);Letter to Lord Carlisle ,by William Eden(1744-1814),first Lord Auckland;William Wale's Enquiry into Present State of Population,etc .(1781);and Geo.Chalmer's Estimate of the Comparative Strength of Great Britain (1782and several later editions.)
12.Essay (first edition)p.339.
13.Memoirs ,etc.(1819),ii,10.
14.So Sir James Stewart,whose light was extinguished by Adam Smith begins his Enquiry into the Principles of Political Economy (1767)by discussing the question of population,and compares the 'generative faculty'to a spring loaded with a weight,and exerting itself in proportion to the diminution of resistence (Works ,1805,i,22).He compares population to 'rabbits in a warren.'
Joseph Townsend,in his Journey Through Spain (1791),to whom Malthus refers,had discussed the supposed decay of the Spanish population,and illustrates his principles by a geometric progression;see ii,213-56,386-91.Eden,in his book on the poor (i,214),quotes a tract attributed to Sir Matthew Hale for the statement that the poor increase on 'geometrical progression.'
15.Malthus and his Work ,p.85.