[154-8] Writers as old as Culpeper, A Tract against the high Rate of Usurie, 1623, and Sir J. Child, Discourse of Trade, p. 22 of the French translation, observed the connection existing between a low rate of interest, national wealth and a flourishing state of commerce on the one hand, and a high price of the necessaries of life and of land in the other. Sir W. Petty would estimate the rent of land as follows: If a calf pasturing in an open meadow gains as much flesh in a given time as is equal to the cost of the food of 50 men for a day, and a workman, on the same land, in the same time, produces food for 60 men, the rent of the land must be 50, and the rate of wages 10. (Political Anatomy of Ireland, 62 seq.; compare 54.) Besides, he accounts for the height of rents by the density of the population exclusively, and he would prefer to see both increase ad infinitum. (Several Essays on Political Arithmetic, 147 ff.)
The germs of the Ricardo law of rent, in Boisguillebert: the price of corn determines how far the cultivation may be extended; by manuring the land, as much corn as desired may be obtained, provided the cost of production is covered. (Traité des Grains, II, ch. 2 ff.) There is a foreshowing of the same law in the Physiocratic view that only in the production of raw material is there a real excess over and above the cost—produit net. Compare Quesnay, Probl., économique, 177 ff. Sur les travaux des artisans. (Daire.) Auxiron, Principes de tout Gouvernement, 1776, I, 126. Adam Smith came very near to the true principle in the case of coal mines, but was hindered reaching it in other cases by the false assumption that certain kinds of agricultural production always yield a rent, while others do so only under certain circumstances. Besides he always considered the interest of capital fixed in the soil; buildings, for instance, as part of the rent. (Wealth of Nat., I, ch. 11.) Compare Hume's Letter to Adam Smith; Burton's Life and Correspondence of Hume, II, 486; von Thünen, Isolirter Staat., I, 15 ff.
The most immediate predecessors of Ricardo, Principles, 2, 3, 24, 31, are Anderson (§ 152); West, Essay on the Application of Capital to Land, 1815, and Malthus, Inquiry into the Nature and Progress of Rent, 1815. See § 152. It is wonderful how a theory which, in 1777, remained almost untouched, was in 1815 etc., attacked and defended with the greatest zeal, because it then affected the differences between the moneyed and landed interest. Yet Ricardo did not take into account at all the rent-creating influence of the situation of land in relation to the market, as well as to the "farm-office" (dem Wirthschaftshofe). The influence of the system of husbandry on rent, first thoroughly treated by von Thünen, loc. cit. What has recently been urged against Ricardo by, for instance, J. B. Say, Traité, II, ch. 9; Sismondi, N. P., III, ch. 12; Jones, Essay on the Distribution of Wealth, 1831 (see Edinburg Review, LIV), bears evidence either of a misunderstanding of the great thinker, or else contains only modifications of some individual abstract propositions of his, stated perhaps too strictly. In judging Ricardo, it must not be forgotten, that it was not his intention to write a text-book on the science of Political Economy, but only to communicate to those versed in it the result of his researches, in as brief a manner as possible. Hence he writes so frequently making certain assumptions; and his words are to be extended to other cases only after due consideration, or rather re-written to suit the changed case.
Baumstark very correctly says: "Rent rises, not because new capital has been invested, but when the circumstances of trade make a new addition to capital possible." (Volkswirthschaftliche Erläuterungen über Ricardo's System, 1838, 567.) Fuoco's Nuova Teoria della Rendita, Saggi economici, No. 1, is nothing but an Italian version of the doctrines of Malthus and Ricardo. The greater number of anti-Ricardo theories of rent have originated from the rapid and apparently unlimited growth of national husbandry in recent times. Thus it is a fundamental thought in Rodbertus, Sociale Briefe, 1851, No. 3, that an increase of the price of corn need not attend an increase of population, either uniformly or necessarily. According to Carey, The Past, the Present and the Future, ch. 1, 1848, the most fertile land is last brought under cultivation, because it is covered with swamps, forests, etc.; and because it offers greater resistance to the work of the agriculturist, by reason of its luxurious vegetation. The more elevated lands are first cultivated which present fewer obstacles to cultivation on account of their dryness, their thinner crust, etc. Carey generalizes this and thinks he has reversed the Ricardo law of rent! He overlooks entirely that Ricardo speaks only of the original powers of the soil. Now a swampy land which must be dried at the expense of a great deal of labor, possesses less of these original powers than a sandy soil which may be sown immediately. See Carey, Essay on the Rate of Wages, 232 ff., and the lengthy exposition of the same doctrine rank with inexact natural science and unhistorical history in the same author's Principles of Social Science, 1858, vol. I.
There is this much truth, however, in Carey's error that, with increasing economic progress, the superiority not only of situation, relatively to the market, but also of natural fertility, may of itself go over to other lands. Thus, for instance, the ancient Slaves used clay soil everywhere as pasturage, and cultivated the sandy soil, because their pick-axes could overcome the resistance only of the latter. Langethal, Geschicte der deutschen Landw., II, 66; Waitz, Schlesw. Holstein, Gesch., I, 17. Similarly in Australia: Hearne, Plutology, 1864. Compare, Roscher, Nationalökonomik des Ackerbaues, § 34. The word fertility should not be taken too exclusively in its present agricultural sense. In a lower stage of civilization, the facility of military defense or the ut fons, ut nemus placuit—Tacit., Germ., 16—may have more weight.
The chief difference in the theories of rent consists in this: whether rent is considered a result of production or only of distribution, and an equalization of gain. Compare Behrens, Krit. Dogmengeschichte der Grundrente, 1868, 48.
HISTORY OF RENT.
In poor nations, and in those in a low stage of civilization, especially where the population is sparse, rent is wont to be low. In Turkistan, land is valued according to the capital invested in its irrigation.[155-1] In the interior of Buenos Ayres, at the beginning of the nineteenth century, landed estates were paid for in proportion to the magnitude of the live stock on them, so that it seemed, at least, as if the land was given for nothing, or simply thrown in with the purchase. And only a short time since, an English acre in the same country, fifteen leguas from the capital, was worth from three to four pence, and at a distance of fifty leguas, only two pence.[155-2] In Russia, also, not long since, the valuation of landed estates was made, not in proportion to the superficies, but according to the number of souls, that is, of male serfs, a remnant suggestive of the previous situation when no rent was paid.[155-3] Where, in relatively uncivilized medieval times, instances of the farming out or leasing of land occur, farm-rents are so small that their payment can only be considered as a mere recognition of the owner's continuing right of property.
Under these circumstances, it is natural that great landowners, especially in the lower stages of civilization, should exert an especially great influence; and that their low tenants (Hintersassen) are more dependent in proportion to the want of capital and the absence of trade. Hence, these are wont to make up for the smallness of their rent by great honors paid to their landlords, and great services, especially military service.[155-4] Besides, the lords of the manor, in almost every medieval period, have used their influence with the government to cut down the wages of labor by serfdom and other similar institutions, and the rate of interest on capital by prohibiting interest, by usury laws, etc.; and thus, in both ways, to artificially increase their own share of the national income.