On The Principles of Political Economy, and TaxationRicardo, David
General
On The Principles of Political Economy, and Taxation
Ricardo, David
Economics
Raw produce is not at a monopoly price, because the market price of
barley and wheat is as much regulated by their cost of production, as
the market price of cloth and linen. The only difference is this, that
one portion of the capital employed in agriculture regulates the price
of corn, namely, that portion which pays no rent; whereas, in the
production of manufactured commodities, every portion of capital is
employed with the same results; and as no portion pays rent, every
portion is equally a regulator of price: corn, and other raw produce,
can be augmented too in quantity, by the employment of more capital on
the land, and therefore they are not at a monopoly price. There is
competition among the sellers, as well as amongst the buyers. This is
not the case in the production of those rare wines, and those valuable
specimens of art, of which we have been speaking; their quantity cannot
be increased, and their price is limited only by the extent of the power
and will of the purchasers. The rent of these vineyards may be raised
beyond any moderately assignable limits, because no other land being
able to produce such wines, none can be brought into competition with
them.
The corn and raw produce of a country, may indeed for a time sell at a
monopoly price; but they can do so permanently only when no more
capital can be profitably employed on the lands, and when, therefore,
their produce cannot be increased. At such time, every portion of land
in cultivation, and every portion of capital employed on the land will
yield a rent, differing indeed in proportion to the difference in the
return. At such a time too, any tax which may be imposed on the farmer,
will fall on rent, and not on the consumer. He cannot raise the price of
his corn, because, by the supposition, it is already at the highest
price at which the purchasers will or can buy it. He will not be
satisfied with a lower rate of profits, than that obtained by other
capitalists, and, therefore, his only alternative will be to obtain a
reduction of rent, or to quit his employment.
Public-domain text, read in full here on John Shaqi.
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