NOTE. Ricardo’s principle of rent is susceptible of development into a universal principle of competitive distribution. To J. B. Clark this development is in fact due. (In divers early articles in the American economic periodicals. Professor Clark’s views have now been summed up in his _Distribution of Wealth_. See especially Chapters iv, viii, xii and xiii.) Perfecting the reasoning, by means of which Ricardo endeavored to get rid of the rent of land, as a cause of the divergence of the exchange value of products from proportionality to their labor costs, Clark gets rid of interest on capital as well. What is left of the product of industry after interest (including land rent and rent of other capital goods) has been deducted is defined by Professor Clark as the _specific_ product of labor, or the marginal product of labor. To assert proportionality of the specific product of labor to its labor cost is a very different thing from asserting that the total product of land, labor and capital in any given business is governed by the labor cost of that product, defining the labor cost as Ricardo did. It cannot be said that Ricardo in any way realized that the principle of land rent could be turned to account as a universal principle in determining shares in distribution. But there is a distant hint at such use in the following passage: “The exchangeable value of all commodities, whether they be manufactured, or the produce of the mines, or the produce of land, is always regulated, not by the less quantity of labour that will suffice for their production under circumstances highly favourable, and exclusively enjoyed by those who have peculiar facilities of production, but by the greater quantity of labour necessarily bestowed on their production by those who have no such facilities, by those who continue to produce them under the most unfavourable circumstances, meaning by the most unfavourable circumstances, the most unfavourable under which the quantity of produce required, renders it necessary to carry on the production.” (P. 50.) In Chapter xi of the present essay we shall attempt to make clear the difference between the assertion that the exchange value of the entire product of a given industry is determined by its labor cost and an assertion that the specific product of labor has a value determined by its labor cost. The following chapters will contain many references to Ricardo. These will concern minor points in his theory which are best taken up in connection with the arguments of subsequent economists. CHAPTER VI MCCULLOCH, JAMES MILL AND TORRENS. ANTICIPATIONS OF MARX’S THIRD VOLUME.