The English Utilitarians, Volume 2 (of 3): James Mill
John Stuart Mill · en
The rent doctrine gives one essential datum. A clear comprehension of
rent is, as he was persuaded, 'of the utmost importance to political
economy.'[303] The importance is that it enables him to separate one
of the primary sources of revenue from the others. It is as though, in
the familiar illustration, we were considering the conditions of
equilibrium of a fluid; and we now see that one part may be considered
as a mere overflow, resulting from (not determining) the other
conditions. The primary assumption in the case of the market is the
level of price. When we clearly distinguish rent on one side from
profits and wages on the other, we see that we may also assume a level
of profits. There cannot, as Ricardo constantly says, 'be two rates of
profit,' that is, at the same time and in the same country. But so
long as rent was lumped with other sources of revenue it was
impossible to see, what Malthus and West had now made clear, that in
agriculture, as in manufactures, the profits of the producer must
conform to the principle. Given their theory, it follows that the
power of land to yield a great revenue does not imply a varying rate
of profit or a special bounty of nature bestowed upon agriculture. It
means simply that, since the corn from the good and bad land sells at
the same price, there is a surplus on the good. But as that surplus
constitutes rent, the farmer's rate of profit will still be uniform.
Thus we have got rid of one complication, and we are left with a
comparatively simple issue. We have to consider the problem, What
determines the distribution as between the capitalist and the
labourer? That is the vital question for Ricardo.