On The Principles of Political Economy, and TaxationRicardo, David
General
On The Principles of Political Economy, and Taxation
Ricardo, David
Economics
It will be seen then, that whatever rise may take place in the price of
corn, in consequence of the necessity of employing more labour and
capital to obtain a given additional quantity of produce, such rise will
always be equalled in value by the additional rent, or additional labour
employed; so that whether corn sells for 4_l._, 4_l._ 10_s._, or 5_l._
2_s._ 10_d._, the farmer will obtain for that which remains to him,
after paying rent, the same real value. Thus we see, that whether the
produce belonging to the farmer be 180, 170, 160, or 150 quarters, he
always obtains the same sum of 720_l._ for it; the price increasing in
an inverse proportion to the quantity.
Rent then, it appears, always falls on the consumer, and never on the
farmer; for if the produce of his farm should uniformly be 180
quarters, with the rise of price, he would retain the value of a less
quantity for himself, and give the value of a larger quantity to his
landlord; but the deduction would be such as to leave him always the
same sum of 720_l._
It will be seen too that, in all cases, the same sum of 720_l._ must be
divided between wages and profits. If the value of the raw produce from
the land exceed this value, it belongs to rent, whatever may be its
amount. If there be no excess, there will be no rent. Whether wages or
profits rise or fall, it is this sum of 720_l._ from which they must
both be provided. On the one hand, profits can never rise so high as to
absorb so much of this 720_l._, that enough will not be left to furnish
the labourers with absolute necessaries; on the other hand, wages can
never rise so high as to leave no portion of this sum for profits.
Thus in every case, agricultural, as well as manufacturing profits are
lowered by a rise in the price of raw produce, if it be accompanied by
a rise of wages.[11] If the farmer gets no additional value for the corn
which remains to him after paying rent, if the manufacturer gets no
additional value for the goods which he manufactures, and if both are
obliged to pay a greater value in wages, can any point be more clearly
established than that profits must fall, with a rise of wages?
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