On The Principles of Political Economy, and TaxationRicardo, David
General
On The Principles of Political Economy, and Taxation
Ricardo, David
Economics
the rate would proportionably fall, and as the produce would at the same
time be diminished, its price would rise; he would be compensated for
the tax, by charging it to the consumer, and no part would fall on rent;
but this is impossible, at least with respect to some proportion of the
capital, and consequently in that proportion the tax will be paid by the
farmers during their leases, and by landlords at their expiration. This
additional tax, as far as it fell unequally on manufacturers, would
under such circumstances be added to the price of their goods; for there
can be no reason why their profits should be reduced below the general
rate of profits, when their capitals might be easily removed to
agriculture.[26]
CHAPTER XVII.
ON SUDDEN CHANGES IN THE CHANNELS OF TRADE.
A great manufacturing country is peculiarly exposed to temporary
reverses and contingencies, produced by the removal of capital from one
employment to another. The demands for the produce of agriculture are
uniform, they are not under the influence of fashion, prejudice, or
caprice. To sustain life, food is necessary, and the demand for food
must continue in all ages, and in all countries. It is different with
manufactures; the demand for any particular manufactured commodity, is
subject not only to the wants, but to the tastes and caprice of the
purchasers. A new tax too may destroy the comparative advantage which a
country before possessed in the manufacture of a particular commodity;
or the effects of war may so raise the freight and insurance on its
conveyance, that it can no longer enter into competition with the home
manufacture of the country to which it was before exported. In all such
cases, considerable distress, and no doubt some loss, will be
experienced by those who are engaged in the manufacture of such
commodities; and it will be felt not only at the time of the change, but
through the whole interval during which they are removing their
capitals, and the labour which they can command, from one employment to
another.
Public-domain text, read in full here on John Shaqi.
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