"Rent, considered as the price paid for the use of land, is naturally the highest which the tenant can afford to pay in the actual circumstances of the land."
[ Smith, I, p. 130 ]
"The rent of an estate above ground commonly mounts to what is supposed to be a third of the gross produce; and it is generally a rent certain and independent of the occassional variations in the crop."
[ Smith, I, p. 153 ]
Rent "is seldom less than a fourth, and frequently more than a third of the whole produce."
[ Smith, I, p. 325 ] Ground rent cannot be paid in the case of all commodities. For example, in many districts no rent is paid for stones.
"Such parts only of the produce of land can commonly be brought to market of which the ordinary price is sufficient to replace the stock which must be employed in bringing them thither, together with its ordinary profits. If the ordinary price is more than this, the surplus part of it will naturally go to the rent of the land. If it is not more, though the commodity may be brought to market, it can afford no rent to the landlord. Whether the price is or is not more depends upon the demand."
[ Smith, I, p. 132 ]
"Rent, it is to be observed, therefore, enters into the composition of the price of commodities in a different way from wages and profit. High or low wages and profit are the causes of high or low prices; high or low rent is the effect of it."
[ Smith, I, p. 132 ] Among the products which always yield a rent is food.
"As men, like all other animals, naturally multiply in proportion the means of subsistence, food is always, more or less, in demand.
It can always purchase or command a greater or smaller quantity of labor, and somebody can always be found who is willing to do something in order to obtain it. The quantity of labor, indeed, which it can purchase is not always equal to what it could maintain, if managed in the most economical manner, on account of the high wages which are sometimes given to labor. But it can always purchase such a quantity of labor as it can maintain, according to the rate at which that sort of labor is commonly maintained in the neighborhood.
"But land, in almost any situation, produces a greater quantity of food than what is sufficient to maintain all the labor necessary for bringing it to market in the most liberal way in which that labor is ever maintained. The surplus, too, is always more than sufficient to replace the stock which employed that labor, together with its profits. Something, therefore, always remains for a rent to the landlord."
[ Smith, I, p. 132-3 ]
"Food is, in this manner, not only the original source of rent, but every other part of the produce of land which afterwards affords rent derives that part of its value from the improvement of the powers of labor in producing food by means of the improvement and cultivation of land."
[ Smith, I, p. 150 ]
"Human food seems to be the only produce of land which always and necessarily affords a rent to the landlord."
[ Smith, I, p. 147 ]
"Countries are populous not in proportion to the number of people whom their produce can clothe and lodge, but in proportion to that of those whom it can feed."
[ Smith, I, p. 149 ] "After food, clothing, and lodging, are the two great wants of mankind."
[Smith, I, p. 147] They generally yield a rent, but not necessarily.
Let us now sees how the landlord exploits everything which is to the benefit of society.
(1) The rent of land increases with population.
(2) We have already learnt from Say how ground rent rises with railways, etc., and with the improvement, security, and multiplication of the means of communication.
(3) "... every improvement in the circumstances of the society tends either directly or indirectly to raise the real rent of land, to increase the real wealth of the landlord, his power of purchasing the labor, or the produce of the labor of other people.
"The extension of improvement and cultivation tends to raise it directly. The landlord's share of the produce necessarily increases with an increase of the produce.
"That rise in the real price of those parts of the rude produce of land... the rise in the price of cattle, for example, tends too to raise the rent of land directly, and in a still greater proportion. The real value of the landlord's share, his real command of the labor of other people, not only rises with the real value of the produce, but the proportion of his share to the whole produce rises with it. That produce, after the rise in its real price, requires no more labor to collect it than before. A smaller proportion of it will, therefore, be sufficient to replace, with the ordinary profit, the stock which employs that labor. A greater proportion of it must, consequently, belong to the landlord."
[ Smith, I, pp. 228-29 ] The greater the demand for raw products and the consequent rise in their value may partly be a result of the increase in population and the growth of their needs. But every new invention and every new application in manufacture of a raw material which was previously not used at all or only used rarely, makes for an increase in the ground rent. For example, the rent of coal-mines rose enormously when railways, steamships, etc., were introduced.
Besides this advantage which the landlord derives from manufacture, discoveries, and labor, there is another that we shall see presently.
(4) "All those improvements in the productive powers of labor, which tend directly to reduce the real price of manufactures, tend indirectly to raise the real rent of land. The landlord exchanges that part of his rude produce, which is over and above his own consumption, or what comes to the same thing, the price of that part of it, for manufactured produce.
Whatever reduces the real price of the latter, raises that of the former. An equal opportunity of the former becomes thereby equivalent to a greater quantity of the latter; and the landlord is enabled to purchase a greater quantity of the conveniences, ornaments, or luxuries, which he has occassion for."
