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第43章 Ricardo and the Growth of Rent(4)

The last point in the theory of rent is the relation between rent and price.Before Ricardo's time most practical men thought that rent was a cause of price.Ricardo answered,There is land cultivated in England which pays no rent,or at least there is capital employed in agriculture which pays none;therefore there is in the market corn which has paid no rent,and it is the cost of raising this corn,which is grown on the poorest land,that determines the price of all the corn in the same market.Probably he was right in his statement that there is land in England which pays no rent;but even if all land and all farmers'capital paid rent,it would not affect the argument,which says that rent is not the cause but the result of price.We may conclude that at the present day rent is determined by two things:the demand of the population,and the quantity and quality of land available.

These determine it by fixing the price of corn.

Now let us turn to facts,to see how our theories work.We will take the rise in rents between 1790and 1830,and ask how it came about.The main causes were -(1)improvements in agriculture,the chief of which were the destruction of the commonfield system,rendering possible the rotation of crops,the consolidation of farms with the farmhouse in the centre of the holding,and the introduction of machinery and manures;(2)the great growth of population,stimulated by mechanical inventions;(3)a series of bad harvests,which raised the price of corn to an unparalleled height;(4)the limitation of supply,the population having to be fed with the produce of England itself,since,during the first part of the period all supplies from abroad were cut off by war,and later,higher and higher protective duties were imposed,culminating in the famous corn bill of 1815.

After 1815,however,a fall in rents -not a very great one-took place,a process which greatly puzzled people at the time.It was the consequence of a sudden coincidence of agricultural improvements and good harvests;there was for a time an over production of corn,and wheat fell in price from 90s.to 35s.This fact is the explanation of Ricardo's mistaken idea that agricultural improvements tend to reduce rents.Having no historical turn of mind,such as Malthus had,he did not recognise that this effect of agricultural improvements was quite accidental.This case,indeed,and the instance of Switzerland given above,with the similar events in Germany about 1820,are the only historical examples of such an effect.For a time there was great agricultural distress;the farmers could not get their rents reduced in proportion to the fall in prices,and many,in spite of the enormous profits they had before made under beneficial leases,were ruined;the farming class never wholly recovered till the repeal of the Corn Laws.But the fall was temporary and exceptional.Taking the period as a whole its striking feature is the rise of rents,and this rise was due to the causes stated:increased demand on the part of an increased population,and limitation of quantity,with improved quality,of the land available.

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