Chapter XIV: Section CLVII

HISTORY OF RENT.--IMPROVEMENTS IN THE ART OF AGRICULTURE.

Improvements in the art of agriculture which are confined to individual husbandmen leave rent unaffected. They do not perceptibly lower the price of agricultural products, and only effect an increase of the reward of enterprise which is entirely personal to the more skillful producers and does not attach to the ground itself.

But how is it when these improvements become general throughout the country? If population and consumption remain unchanged, the supply of agricultural products will exceed the demand. This would compel farmers, if there be no avenue open to exports, to curtail their production. The least fertile and most disadvantageously situated parcels of land will be abandoned to a greater or less extent, and the least productive capital devoted to agriculture, withdrawn. In this way, rent goes down both relatively and absolutely, although the owners of land may be able to partially cover their loss by the gain which results to them as consumers and capitalists.[157-1] (§ 186). After a time, however, and as a consequence of the diminished price of corn, population and consumption will increase, and entail an extension of agriculture and a consequent rise in rents.[157-2] If it, relatively speaking, reaches the same point as before, it still is absolutely much greater than before. Let us suppose that there are three classes of land of equal extent in a country, which for an equal outlay of capital produce 100,000, 80,000 and 70,000 bushels yearly. The rent of the land here would be equal to at least 40,000 bushels. If the yield of production now doubles, while the demand for agricultural products also doubles, the aggregate harvest will be 200,000 + 160,000 + 140,000 bushels, and consequently rent will have risen to at least 80,000 bushels. But this increase of rent has injured no one. If the population increases in a less degree than the productiveness of the land, the consumer may, to a certain extent, gain largely, and the landowner better his condition. However, great agricultural improvements spread so gradually over a country, that, as a rule, the demand for agricultural products can keep pace with the increased supply. But even in this case, that transitory absolute decline of rent may be avoided; and it cannot be claimed universally, as it is by many who are satisfied with mumbling Ricardo's words after him, that an increase of rent is possible only by an enhancement of the price of the products of the soil. Where the development of a people's economy is a normal one, the rent of land is wont to increase gradually, but at the same time to constitute a diminishing quota of the entire national income.[157-3]

Improvements in milling,[157-4] and in the instruments of transportation[157-5] adapted to agricultural products, and the introduction of cheaper[157-6] food, have the same effect as improvements of agricultural production. All such steps in advance render an increase in population, or in the nation's resources, possible without any corresponding increase in the amount paid to landowners as tribute money.[157-7]

The foregoing facts furnish us the data necessary to decide what influence permanent soil improvements have on the rent of land.[157-8] The improved parcels of land now grow more fertile. Their rentability also increases, while that of the others becomes not only relatively but absolutely less, if the demand remains unaltered. The whole is as if capital had been transformed into fertile land, and this added to the improved land.

[Footnote 157-1: Since it has seemed absurd to many writers
to say that an improvement in the art of agriculture may
cause rents to decline (compare _Malthus_, Principles, I,
ch. 3, 8), _John Stuart Mill_, Principles, IV, ch. 3, § 4,
prefers to put the question thus: whether the landowner is
not injured by the improvement of the estates of other
people, although his own is included in the improvement.
Compare _Davenant_, Works, I, 361. And so the long
agricultural crisis through which Germany passed at the
beginning of the third decade of this century was produced
mainly by the great impulse given to agriculture (_Thaer_,
_Schuerz_ etc.), while population did not keep pace with it.
Similarly, at the same time, in England, _McCulloch_, Stat.,
I, 557 ff. Of course, the less fertile pieces of land
declined even relatively most in price. From 1654 to 1663,
Switzerland experienced a severe agricultural crisis,
attended with oppressive cheapness of corn, a great decline
in the price of land, innumerable cases of insolvency,
revolts of the peasantry, emigration, etc. (_Meyer von
Knonau_, Handbuch d. schweiz. Gesch., II, 43.) The Swiss
had, precisely during the Thirty Years' War which spared
them, so extensively developed their agricultural interests,
that now that other countries began to compete with them,
they could not find a market large enough for their
products. For English instances of similar "agricultural
distress" in the seventeenth and eighteenth centuries, see
_Child_, Discourse on Trade, 73, 124 seq.; _Temple_,
Observations upon the U. P., ch. 6; _Tooke_, History of
Prices, I, 23 seq., 42. Even where there have been no
technic improvements, a series of unusually good harvests
may have the same results, of which there are many instances
scattered through _Tooke's_ first volume.

There is great importance attached in England to the
difference between those agricultural reforms which save
land and those which effect a saving in capital and labor.
The latter, it is said, decrease the money rent of the
landowner by depreciating the price of corn, but leave the
corn-rent unaltered. The former, on the other hand, decrease
the rent both in money and corn, but the money rent in a
higher degree. (_Ricardo_, Principles, ch. 2; _J. S. Mill_,
Principles, IV, ch. 3, 4.)]

[Footnote 157-2: When the demand for products of the soil
which minister to luxury, such as fat meat, milk,
vegetables, is increasing, a greater cheapness of the
necessary wheat may raise rent, for the reason that lands
are now cultivated which were not formerly tillable. Thus,
there is now land in Lancashire which could not formerly be
planted with corn, because the laborers would have consumed
more than the harvest yielded. Since the large imports of
the means of subsistence from Ireland these lands have been
transformed into artificial meadows, gardens, etc.
(_Torrens_, The Budget, 180 ff.) Compare _Adam Smith_, I,
257, ed. Bas. _Banfield_ would misuse these facts to
overturn the theory of Ricardo. (Organization of Industry,
1848, 49 ff.)]

[Footnote 157-3: The French testamentary tax was on an
amount,

In 1835, of 552 mill. francs moveable property
and 984 " immoveable.
In 1853, of 820 " francs moveable property
and 1,176 " immoveable.
In 1860, of 1,179 " francs moveable property
and 1,545 " immoveable.

so that the preponderance of immoveable property constituted
a converging series of 78, 43, and 31 per cent. (_Parieu._)
In North America, with its great unoccupied territory, the
reverse is the case. The census of 1850 gave a moveable
property of 36 per cent.; that of 1860 of only 30 per cent.
According to _Dubost_, the rent of land in Algeria was 80
per cent., a gross product of only 10-15 francs per
_hectare_; in Corsica, 66 per cent., a gross yield of from
30-35 per cent.; in the Department du Nord, 17.5-24 per
cent., a gross yield of from 500-740 francs. (Journal des
Economistes, Juin, 1870, 336 ff.)]

[Footnote 157-4: The repeated sifting of the bran (_mouture
économique_) had great influence in this respect. In France,
in the sixteenth century, a _setier_ of wheat gave only 144
pounds of bread. In 1767, according to _Malouin_, L'Art du
Bonlanger, it gave 192 pounds. It now gives from 223 to 240
pounds. The gain in barley is still greater; the _setier_
gives 115 pounds of flour, formerly only 58. (_Roquefort_,
Histoire de la Vie Privée des Français, I, 72 ff.
_Beckmann_, Beitr. zur Gesch. der Erfind., II, 54.)]

[Footnote 157-5: In the beginning of the eighteenth century,
the counties in the neighborhood of London addressed a
petition to Parliament against the extension of the building
of turnpike roads which caused their rents to decline, from
the competition of distant districts. (_Adam Smith_, Wealth
of Nat., I, ch. 11, 1.) Compare _Sir J. Stewart_,
Principles, I, ch. 10. Improvements in transportation which
affect the longest and shortest roads to a market in an
absolutely equal degree, as, for instance, the bridging of a
river very near the market, leave rent unaffected. (_von
Mangoldt_, V. W. L., 480.)]

[Footnote 157-6: _Malthus_, Principles, 231 ff. If the
laboring class were to become satisfied with living on
potatoes instead of meat and bread as hitherto, rents would
immediately and greatly fall, since the necessities of the
people might then be obtained from a much smaller
superficies. But after a time, the consequent increase in
population might lead to a much higher rent than before;
since a great deal of land too unfertile for the cultivation
of corn might be sown with potatoes, and thus the limits of
cultivation be reached much later.]

[Footnote 157-7: In France, between 1797 and 1847, the
average price of wheat did not rise at all. _Hipp. Passy_
mentions pieces of land which produced scarcely 12
hectolitres of wheat, but which now produce 20--an increased
yield of 170 francs, attended by an increase in the cost of
only 75 francs. (Journal des Economistes, 15 Oct., 1848.)
Moreover, it may be that a not unimportant part of modern
rises in the price of corn may be accounted for by the
better quality of the corn caused by higher farming. (_Inama
Sternbeg_, Gesch. der Preise, 10 seq.) Such facts, readily
explainable by _Ricardo's_ theory, remove the objection of
_Carey_, _Banfield_ and others, that the condition of the
classes who own no land has, since the middle ages,
unquestionably improved. Political Economy would be simply a
theory of human degradation and impoverishment, if the law
of rent was not counteracted by opposing causes. (_Roesler_,
Grundsätze, 210.) According to _Berens_, Krit.
Dogmengeschichte, 213, the actual highness of rent is to be
accounted for by the antagonism between the "soil-law
(_Bodengesetz_) of the limited power of vegetation," and the
"progress of civilization" (but surely only to the extent
that the latter improves the art of agriculture). Thus, too,
_John Stuart Mill_, Principles, I, ch. 12; II, ch. 11, 15
seq.; III, ch. 4 seq.; IV, ch. 2 ff.]

[Footnote 157-8: Thus, for instance, drainage works which,
where properly directed, have paid an interest of from 25 to
70 per cent. per annum in England and Belgium on the capital
invested.]