Smith had treated it as the peculiar privilege of agriculture,as compared with other forms of production,that in it "naturelabours along with man,"and therefore,whilst the workmen in manufactures occasion the reproduction merely oi the capitalwhich employs them with its owner's profits,the agricultural labourer occasions the reproduction,not only of the employer'scapital with profits,but also of the rent of the landlord.This last he viewed as the free gift of nature which remained "afterdeducting or compensating everything which can be regarded as the work of man."Ricardo justly observes in reply that"there is not a manufacture which can be mentioned in which nature doe not give her assistance to man."He then goes on toquote from Buchanan the remark that "the notion of agriculture yielding a produce and a rent in consequence,becausenature concurs with industry in the process of cultivation,is a mere fancy.It is not from the produce,but from the price atwhich the produce is sold,that the rent is derived;and this price is got,not because nature assists in the production,butbecause it is the price which suits the consumption to the supply."(43)There is no gain to the society at large from the rise ofrent;it is advantageous to the landlords alone,and their interests are thus permanently in opposition to those of all otherclasses.The rise of rent may be retarded,or prevented,or even temporarily changed to a fall,by agricultural improvements,such as the introduction of new manures or of machines or of a better organisation of labour (though there is not so muchroom for this last as in other branches of production),or the opening of new sources of supply in foreign countries ;but thetendency to a rise is constant so long as the population increases.
The great importance of the theory of rent in Ricardo's system arises from the fact that he makes the general economiccondition of the society to depend altogether on the position in which agricultural exploitation stands.This will be seen fromthe following statement of his theory of wages and profits.The produce of every expenditure of labour and capital beingdivided between the labourer and the capitalist,in proportion as one obtains more the other,will necessarily obtain less.Theproductiveness of labour being given,nothing can diminish profit but a rise of wages or increase it but a fall of wages.Nowthe price of labour,being the same as its cost of production,is determined by the price of the commodities necessary for thesupport of the labourer.The price of such manufactured articles as he requires has a constant tendency to fall,principally byreason of the progressive application of the division of labour to their production.But the cost of his maintenance essentiallydepends,not on the price of those articles,but on that of his food;and,as the production of food will in the progress ofsociety and of population require the sacrifice of more and more labour,its price will rise;money wages will consequentlyrise,and with the rise of wages profits will fall.Thus it is to the necessary gradual descent to inferior soils,or less productiveexpenditure on the same soil,that the decrease in the rate of profit which has historically taken place is to be attributed(Smith ascribed this decrease to the competition of capitalists,though in one place,Book I,chap.ix,(44)he had a glimpse ofthe Ricardian view).This gravitation of profits towards a minimum is happily checked at times by improvements of themachinery employed in the production of necessaries,and especially by such discoveries in agriculture and other causes asreduce the cost of the prime necessary of the labourer;but here again the tendency is constant.Whilst the capitalist thusloses,the labourer does not gain ;his increased money wages only enable him to pay the increased price of his necessaries,of which he will have no greater and probably a less share than he had before.In fact,the labourer can never for anyconsiderable time earn more than what is required to enable the class to subsist in such a degree of comfort as custom hasmade indispensable to them,and to perpetuate their race without either increase or diminution.That is the "natural"price oflabour;and if the market rate temporarily rises above it population will be stimulated,and the rate of wages will again fall.
Thus whilst rent has a constant tendency to rise and profit to fall,the rise or fall of wages will depend on the rate of increaseof the working classes.For the improvement of their condition Ricardo thus has to fall back on the Malthusian remedy,ofthe effective application of which he does not,however,seem to have much expectation.The securities against asuperabundant population to which he points are the gradual abolition of the poor-laws --for their amendment would notcontent him --and the development amongst the working classes of a taste for greater comforts and enjoyments.
It will be seen that the socialists have somewhat exaggerated in announcing,as Ricardo's "iron law"of wages,their absoluteidentity with the amount necessary to sustain the existence of the labourer and enable him to continue the race.Herecognizes the influence of a "standard of living"as limiting the increase of the numbers of the working classes,and sokeeping their wages above the lowest point.But he also holds that,in long-settled countries,in the ordinary course ofhuman affairs,and in the absence of special efforts restricting the growth of population,the condition of the labourer willdecline as surely,and from the same causes,as that of the landlord will be improved.
