[33] I do not mean to say that the accepted law of rent has never been disputed. In all the nonsense that in the present disjointed condition of the science has been printed as political economy, it would be hard to find anything that has not been disputed. But I mean to say that it has the sanction of all economic writers who are really to be regarded as authority. As John Stuart Mill says (Book II., Chap. XVI.), “there are few persons who have refused their assent to it, except from not having thoroughly understood it. The loose and inaccurate way in which it is often apprehended by those who affect to refute it is very remarkable.” An observation which has received many later exemplifications.
[34] According to McCulloch the law of rent was first stated in a pamphlet by Dr. James Anderson of Edinburgh in 1777, and simultaneously in the beginning of this century by Sir Edward West, Mr. Malthus, and Mr. Ricardo.
[35] Buckle (Chap. II., History of Civilization) recognizes the necessary relation between rent, interest, and wages, but evidently never worked it out.
[36] This is really said of profits, but with the evident meaning of returns to capital.
[37] This equalization will be effected by the equation of prices.
[38] This last, which is analogous to the element of risk in profits, accounts for the high wages of successful lawyers, physicians, contractors, actors, etc.
[39] As to this, it may be worth while to say: (1) That the general fact, as shown by the progress of agriculture in the newer States of the Union and by the character of the land left out of cultivation in the older, is that the course of cultivation is from the better to the worse qualities of land. (2) That, whether the course of production be from the absolutely better to the absolutely worse lands or the reverse (and there is much to indicate that better or worse in this connection merely relates to our knowledge, and that future advances may discover compensating qualities in portions of the earth now esteemed most sterile), it is always, and from the nature of the human mind, must always tend to be, from land under existing conditions deemed better, to land under existing conditions deemed worse. (3) That Ricardo’s law of rent does not depend upon the direction of the extension of cultivation, but upon the proposition that if land of a certain quality will yield something, land of a better quality will yield more.
[40] The Subsidy Question and the Democratic Party, 1871.
[41] It is astonishing how in a new country of great expectations speculative prices of land will be kept up. It is common to hear the expression, “There is no market for real estate; you cannot sell it at any price,” and yet, at the same time, if you go to buy it, unless you find somebody who is absolutely compelled to sell, you must pay the prices that prevailed when speculation ran high. For owners, believing that land values must ultimately advance, hold on as long as they can.
[42] This was written a year ago. It is now (July, 1879) evident that a new period of activity has commenced, as above predicted, and in New York and Chicago real estate prices have already begun to recover.