Ricardo’s unwillingness to recognise this other class of rent, which depends solely upon the limited quantity of land, was due to the fact that it would have contradicted his other theory that there is no value except labour. It is true that he made an exception of some rare “products,” such as valuable paintings, statuary, books, medals, first-class wines, etc., the quantity of which could not be increased by labour. Nobody would have taken any notice of such a slight omission as that, but had he left out such an important item of wealth as the earth itself there would be great danger of the whole theory crumbling to dust.[339]
Such is the theory of rent, celebrated above all economic doctrines, and concerning which it might be said that no doctrine, not even that of Malthus, has ever excited such impassioned criticism. For this there are several reasons.
In the first place, it led to an overthrow of the majesty of the “natural order” by simply depicting some of its gloomier aspects. Men had been led to believe that the “order” was for ever beyond challenge. Now, however, it seemed that if the new doctrine was true then the interests of the landed proprietors were opposed not only to those of every other class in the community—for sharing always begets antagonism—but also to the general interest of society as a whole.
For what are the real interests of proprietors? First, that population and its demands should increase as rapidly as possible in order that men may be forced to cultivate new lands, and that these new lands should be as sterile as possible, requiring much toil and thus causing an increase in rents. Exhaustive labour bestowed upon the cultivation of land that is gradually becoming poorer and poorer would soon make the fortune of every landlord.
As a class, proprietors have every interest in retarding the progress of agricultural science, a paradox which the slightest reflection will show to be true. Every advance in agricultural science must mean more products from the same amount of land and a check upon the law of diminishing returns, resulting in lower prices and reduced rents, since it would no longer be necessary to cultivate the poorer soils. In a word, since rent is measured by reference to the obstacles which thwart cultivation, just as the level of water in a pond is determined by the height of the sluice, everything that tends to lower this obstacle must reduce the rent. In mitigation of this charge it must, however, be noted that, taken individually, every proprietor is of necessity interested in agricultural improvement, because he may have an opportunity of benefiting by larger crops before the improvements have become general enough to lower prices and to push back the margin of cultivation. If every proprietor argued in this way, individual interest would finally cheat itself, to the advantage of the general public. But this is nothing to be very proud of.
Ricardo set out to demonstrate the antagonism,[340] and with what a vigorous pen does he not picture it! The study of this question of rent made of him a Free Trader stauncher than Adam Smith, more firmly convinced than the Physiocrats. Free Trade was for them founded upon the conception of a general harmony of interests, while Ricardo built his faith upon one clearly demonstrated fact—the high price of corn and its concomitant, high rents. Free Trade seemed to be the means of checking this disastrous movement. The free importation of corn implied the cultivation of distant lands as rich as or even richer than any in Britain. All this meant avoiding the cultivation of inferior lands and reducing the high price of corn.
He was also desirous of proving to the proprietors that the practice of free exchange, even though it might involve some loss of revenue to them, was really to their interest. Their opposition, he thought, was very short-sighted. “They fail to see,” he writes, “that commerce everywhere tends to increase production, and that as a result of this increased production general well-being is also improved, although there may be partial loss as the result of it. To be consistent with themselves they ought to try to arrest all improvement in agriculture and manufacture and all invention of machinery.”[341]
The theory of rent, in the second place, endangered the reputation of landowners by showing that their income is not the product of labour, and is consequently anti-social. No wonder that it has been so severely criticised by conservative economists. Ricardo himself, however, seemed quite unconscious of the nature of the blow thus aimed at the institution of private property. His indifference, which appears to us so surprising, is partly explained by the fact that the theory absolved the proprietor from all responsibility in the matter. Unlike profits and wages, rent does not figure in cost of production because it makes no contribution to the price of corn, but is itself wholly determined by that price.[342] The landed proprietor thus appears as the most innocent of the co-partners, playing a purely passive rôle. He does not produce rent, but simply accepts it.
That may be; but the fact that the proprietor plays no part in the production of rent, whilst exonerating him from complicity in its invidious consequences, spells ruin to his title of proprietor—that is, if we consider labour to be the only title to proprietorship. It was just this aspect of the question that drew the attention of Ricardo’s contemporary James Mill. Mill advocated the confiscation of rent or its socialisation by means of taxation.[343] He thus became a pioneer in the movement for land nationalisation, a cause that has since been championed by such writers as Colins, Gossen, Henry George, and Walras.
Finally, the theory of rent seems to give colour to certain theories which predict an extremely dark future for the race, corroborating the gloomy forebodings of Malthus. As society grows and advances it will be forced to employ lands that are less fertile and means of production that are more onerous. It seems as if the curse uttered in Genesis has been scientifically verified. “Thorns also and thistles shall it bring forth to thee; … in the sweat of thy face shalt thou eat bread.”
True, he did not carry his pessimism so far as to say that as the result of this fatal exhaustion of this most precious instrument of production the progress of mankind would for ever be arrested by the ravages of famine. Other beneficent forces, the progress of agricultural science and a larger employment of capital, would surmount the difficulty. “Although the lands that are actually being cultivated may be inferior to those which were in cultivation some years ago, and consequently production is becoming more difficult, can anyone doubt that the quantity of products does not greatly exceed that formerly produced?”
Ricardo’s theory does not involve a denial of progress. But it shows how the struggle is becoming more and more difficult, and how scarcity and want, if not actual famine, must lie in the path along which we are advancing. Suppose Great Britain were now to attempt to feed her 45 million inhabitants from her own soil, would there be much doubt as to the correctness of Ricardo’s prophecy?
It is an easy matter to reproach Ricardo[344] with his failure to foresee the remarkable development in the methods of transport and cheap importation which resulted in the arrest, if not the reversal, of the upward movement of the rent curve. The complaints of landlords both in England and Europe seem to belie the Ricardian theory.[345] But who can tell whether the peril is finally removed or not? The inevitable day will arrive when new countries will consume the corn which to-day they export. This may not come about in the history of England and Europe for some centuries yet, but when it does happen, rent, instead of being stationary and retrogressive, as it has been so long, will again resume its upward trend.
It is true that we may reckon upon the aid of agricultural science even if foreign importation should fail us. Ricardo was ever mindful of the great possibilities of human industry. Other economists, notably Carey and Fontenay, one of Bastiat’s disciples, have propounded a theory which is the exact antithesis of the Ricardian, namely, that human industry in its utilisation of natural forces always begins with the feeblest as being more easily tamed, the more powerful and recalcitrant forces only coming in for attention later on. The earth is no exception to the rule, and agricultural industry might well become not less but more productive.