Malthus's views were first fully given in his Inquiry into Rent, the second of three pamphlets which he published during the corn-law controversy of 1814-15.[281] The opinions now stated had, he says, been formed in the course of his lecturing at Haileybury; and he made them public on account of their bearing upon the most absorbing questions of the time. The connection of the theory with Malthus's speculations and with the contemporary difficulties is indeed obvious. The landlord had clearly one of the reserved seats at the banquet of nature. He was the most obvious embodiment of 'security' as opposed to equality. Malthus, again, had been influenced by the French economists and their theory of the 'surplus fund,' provided by agriculture. According to them, as he says,[282] this fund or rent constitutes the whole national wealth. In his first edition he had defended the economists against some of Adam Smith's criticisms; and though he altered his views and thought that they had been led into preposterous errors, he retained a certain sympathy for them. Agriculture has still a certain 'pre-eminence.' God has bestowed upon the soil the 'inestimable quality of being able to maintain more persons than are necessary to work it.'[283] It has the special virtue that the supply of necessaries generates the demand. Make more luxuries and the price may fall; but grow more food and there will be more people to eat it. This, however, seems to be only another way of stating an unpleasant fact. The blessing of 'fertility' counteracts itself. As he argues in the essay,[284] an equal division of land might produce such an increase of population as would exhaust any conceivable increase of food. These views—not, I think, very clear or consistently worked out—lead apparently to the conclusion that the fertility is indeed a blessing, but on condition of being confined to a few. The result, in any case, is the orthodox theory of rent. The labourer gets less than he would if the products of the soil were equally distributed. Both wages and profits must fall as more is left to rent, and that this actually happens, he says, with unusual positiveness, is an 'incontrovertible truth.'[285] The fall enables the less fertile land to be cultivated, and gives an excess of produce on the more fertile. 'This excess is rent.'[286] He proceeds to expound his doctrine by comparing land to a set of machines for making corn.[287] If, in manufacture, a new machine is introduced every one adopts it. In agriculture the worst machines have still to be used; and those who have the best and sell at the same price, can appropriate the surplus advantage. This, he declares, is a law 'as invariable as the action of the principle of gravity.'[288] Yet Smith and others have overlooked a 'principle of the highest importance'[289] and have failed to see that the price of corn, as of other things, must conform to the cost of production. The same doctrine was expounded in the same year by Sir Edward West;[290] and, as it seems to me, more clearly and simply. West, like Malthus, says that he has to announce a principle overlooked by Adam Smith. This is briefly that 'each equal additional quantity of work bestowed on agriculture yields an actually diminished return.' He holds that profits fall as wealth increases, but he denies Adam Smith's view that this is a simple result of increased competition.[291] Competition would equalise, but would not lower profits, for 'the productive powers of manufactures are constantly increasing.' In agriculture the law is the opposite one of diminishing returns. Hence the admitted fall of profits shows that the necessity of taking inferior soils into cultivation is the true cause of the fall.
Such coincidences as that between Malthus and West are common enough, for very obvious reasons. In this case, I think, there is less room for surprise than usual. The writer generally credited with the discovery of the rent doctrine is James Anderson, who had stated it as early as 1777.[292] The statement, however, did not attract attention until at the time of West and Malthus it was forced upon observers by the most conspicuous facts of the day. Adam Smith and other economists had, as Malthus notices, observed what is obvious enough, that rent in some way represented a 'net produce'—a something which remained after paying the costs of production. So much was obvious to any common-sense observer. In a curious paper of December 1804,[293] Cobbett points out that the landlords will always keep the profits of farmers down to the average rate of equally agreeable businesses. This granted, it is a short though important step to the theory of rent. The English system had, in fact, spontaneously analysed the problem. The landlord, farmer, and labourer represented the three interests which might elsewhere be combined. Prices raised by war and famine had led to the enclosure of wastes and the breaking up of pastures. The 'margin of cultivation' was thus illustrated by facts. Farmers were complaining that they could not make a profit if prices were lowered. The landed classes were profiting by a rise of price raised, according to a familiar law, in greater proportion than the deficiency of the harvest. Facts of this kind were, one must suppose, familiar to every land-agent; and to discover the law of rent, it was only necessary for Malthus and West to put them in their natural order. The egg had only to be put on its end, though that, as we know, is often a difficult task. When the feat was accomplished consequences followed which were fully developed by Ricardo.
FOOTNOTES:
[203] Mr. James Bonar's Malthus and his Work (1885) gives an admirable account of Malthus. The chief original authorities are a life by Bishop Otter, prefixed to a second edition of the Political Economy (1831), and an article by Empson, Malthus's colleague, in the Edinburgh Review for January 1837.
[204] Political Justice (3rd edition, 1798), ii. bk. viii. chap. ix., p. 514.
[205] Wallace wrote in answer to Hume, A Dissertation on the Numbers of Mankind in Ancient and Modern Times (1753), and Various Prospects of Mankind, and Nature and Providence (1761). Godwin refers to the last.
[206] Political Justice, ii. 520.
[207] Ibid. ii. 528.
[208] First published in 1795, after the first edition, as Godwin remarks, of the Political Justice.
[209] Ami des hommes (reprint of 1883), p. 15.