An Inquiry into the Nature and Progress of Rent, and the Principles by Which It is RegulatedMalthus, T. R. (Thomas Robert)
General
An Inquiry into the Nature and Progress of Rent, and the Principles by Which It is Regulated
Malthus, T. R. (Thomas Robert)
Rent
There is a radical difference in the cause of a demand for those objects
which are strictly necessary to the support of human life, and a demand
for all other commodities. In all other commodities the demand is
exterior to, and independent of, the production itself; and in the case
of a monopoly, whether natural or artificial, the excess of price is
in proportion to the smallness of the supply compared with the demand,
while this demand is comparatively unlimited. In the case of strict
necessaries, the existence and increase of the demand, or of the number
of demanders, must depend upon the existence and increase of these
necessaries themselves; and the excess of their price above the cost of
their production must depend upon, and is permanently limited by, the
excess of their quantity above the quantity necessary to maintain the
labour required to produce them; without which excess of quantity no
demand could have existed, according to the laws of nature, for more
than was necessary to support the producers.
It has been stated, in the new edition of the Wealth of nations, that
the cause of the high price of raw produce is, that such price is
required to proportion the consumption to the supply. [8] This is also
true, but it affords no solution of the point in question. We still want
to know why the consumption and supply are such as to make the price so
greatly exceed the cost of production, and the main cause is evidently
the fertility of the earth in producing the necessaries of life.
Diminish this plenty, diminish the fertility of the soil, and the excess
will diminish; diminish it still further, and it will disappear. The
cause of the high price of the necessaries of life above the cost
of production, is to be found in their abundance, rather than their
scarcity; and is not only essentially different from the high price
occasioned by artificial monopolies, but from the high price of those
peculiar products of the earth, not connected with food, which may be
called natural and necessary monopolies.
The produce of certain vineyards in France, which, from the peculiarity
of their soil and situation, exclusively yield wine of a certain
flavour, is sold of course at a price very far exceeding the cost of
production. And this is owing to the greatness of the competition for
such wine, compared with the scantiness of its supply; which confines
the use of it to so small a number of persons, that they are able, and
rather than go without it, willing, to give an excessively high
price. But if the fertility of these lands were increased, so as very
considerably to increase the produce, this produce might so fall in
value as to diminish most essentially the excess of its price above the
cost of production. While, on the other hand, if the vineyards were to
become less productive, this excess might increase to almost any extent.
Public-domain text, read in full here on John Shaqi.
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