Bastiat was fully conscious of the weakness of his argument. He saw quite clearly that possession of a suitable piece of land in the Champs-Élysées would earn something more than mere payment for labour and outgoings. It is then that he takes refuge in his theory of value, and attempts to show that the proprietor will never draw more than the price of the service rendered. This may be true. But the mere fact of possessing a natural source of wealth permits of the raising of the price of these goods a great deal, and then what becomes of community of interests, and of the theory that the goods are handed on by the proprietor free of any charge?
How superior is Carey’s theory, both in its scientific value and in its social import! Carey follows Ricardo step by step, whereas it seems that Bastiat had only a very imperfect acquaintance with the Ricardian theory.[718] In reply to the statement that the value of corn rises progressively because the more fertile lands are occupied first, and the less fertile have to be utilised afterwards, Carey points out that, on the contrary, cultivation begins with the poorer land first, and that the richest is the last to be cultivated. The consequence is just the reverse of what Ricardo predicted. As production increases, the price of corn will be lowered. The process of reasoning by which this reversal of the order of cultivation is demonstrated is very interesting. The domestication of land, if the phrase be permissible, like the utilisation of all natural forces, takes place according to the inverted order of their strength. Animals are domesticated before man harnesses wind or water, and water and wind are employed before there is any thought of vapour or electricity. The same is true of land. Fertile land in its natural state is either overrun with vegetation, which must be grubbed up, or is covered with water, which must be drained off. “Rich land is the terror of the emigrant.”[719] Its virgin forests must be felled, its wild animals destroyed, its marshes drained, and its pestilential miasmas rendered innocuous if it is not to become a mere graveyard. And not until several generations have given of their toil will it be of much use. Rather than undertake the task the earliest emigrant seeks the lighter soils of the hill-side, which are better adapted to his feeble means, as well as safer and more easily defended.
That this theory is well founded may be very clearly seen if we watch the progress of cultivation or the colonisation of new lands, or glance at the general history of civilisation. Men group themselves in villages on the higher levels or build their castles on the slopes of the hills, and only descend slowly and carefully into the lower plains. How many are the localities in France where the new town may be seen overspreading the plain close to the old city which still crests the hill! The various national gods—Hercules, for example, who stifled the hydra of Lerna in his arms and shot the birds of Stymphalus’s pool with his arrows—are in all probability just the men who first dared break up the alluvial soils.
This theory, again, is open to the same objection as Ricardo’s. It applies to some cases only, and under certain conditions. Ricardo’s theory explained the facts relative to England, where population presses heavily upon the limited area of a small island already well occupied. Carey’s theory is equally well adapted to an immense continent, with a thinly scattered population, occupying only a few cultivated islets amid the vast ocean of virgin forest and prairie. The two theories are not contradictory. They apply to two different sets of conditions, or to successive phases of economic evolution. And seeing that Ricardo’s applies to the more advanced stage of civilisation, it certainly ought to have the last word. If Carey were writing now he would probably express himself somewhat differently, for it is no longer true even of the United States that the more fertile lands are still awaiting cultivation. Only the poorer and the more arid plains remain uncultivated, and here dry farming has to be resorted to. So that even in the “Far West” Ricardo’s theory is closer to the facts than Carey’s. Rents are rising everywhere, and not a few American millionaires owe their fortunes to this fact.[720]
It is just possible that Bastiat had some knowledge of Carey’s theory, for the theory is outlined in The Past, the Present, and the Future, published by Carey a little before Bastiat’s death, as well as in his Social Science, which appeared ten years later. At any rate, let us render thanks to both of them for the suggestive thought that as human power over nature increases, effort, difficulty, and value, which is the outcome of difficulty, will disappear, and that, consequently, the sum total of real wealth at the disposal of everyone will increase, but that the poor will be those who will benefit most.[721]
III: THE RELATION OF PROFITS TO WAGES
The law of rent was not the only discordant note. That other law which stated that profits vary inversely with wages was also dissonant and needed refuting. Bastiat emphasises the contrast between it and his new law of harmony, according to which the interests of capital and labour are one, their respective shares increase together, and the proportion given to labour grows more rapidly even than capital’s.[722]
That is the conclusion which Bastiat wishes to illustrate by means of the following table:
| Total Product | Capital’s Share | Labour’s Share | |||
|---|---|---|---|---|---|
| First period | 1000 | 500 | (50 per cent.) | 500 | (50 per cent.) |
| Second period | 2000 | 800 | (40 ”) | 1200 | (60 ”) |
| Third period | 3000 | 1050 | (35 ”) | 1950 | (65 ”) |
| Fourth period | 4000 | 1200 | (30 ”) | 2800 | (70 ”) |