festly absurd, for how can wealth be increased but by labor, and how can it increase faster than labor, when every addition of labor, produces only a proportional addition of capital? how can it increase slower, when the returns of labor remain exactly as great as ever?

If we suppose that labor is rendered more productive by improved processes, or a resort to more powerful natural agents, than those already in use, profits, or the periodical increase of wealth, would of course rise; capital would increase faster than before, since it would be able to make larger savings from the greater profits, without any increased privation, and if the supply of labor only increased as before, wages must rise. But this would stimulate population, and attract labor from the idle classes of society, until the supply of labor again increased at an equal rate with capital. At this point of equilibrium, wages and profits would tend to remain, while both had been increased by the increased powers of production. This whole increase would fall neither to profits or wages, but it would ultimately go proportionately to both. Indeed, in the very beginning, the demand for labor would be increased by the prospect of its increased productiveness, and the capitalists would not only divide their actual capitals, as wages, among the laborers, but would give them an increase of wages in the shape of a credit, or promise of part of the increase of their productions.

If we suppose that labor becomes less productive than it has been, profits must fall, and capital will increase less rapidly than before, and if labor continues to increase at its former rate, the proportion of labor to capital, will soon be changed, and wages will fall. But as wages fall, the progress of population will be retarded, and the supply of labor and capital will again increase at an equal, but lower rate. The diminution in the productive powers of labor will fall proportionally on both wages and profits.

Unless labour loses some of its skill and intelligence, which we cannot suppose in a well governed country, it can only become less productive, because the natural agents on which it operates are less productive. The effects of such a cause, are connected with the use of natural agents in production, and the price or rent paid for that use. It is therefore, necessary to proceed to that portion of our inquiry which treats of rents.

We, before remarked, that so long as the natural agents employed in production generally, or those used for the production of any particular commodity, are unlimited in quantity, are equally convenient to every one, and equally productive to equal applications of labor, there can be no motive to pay a price for their use. There are no more valuable natural agents than air and heat, yet no one pays for their use. But if we suppose, that the quantity is limited, or that some are more convenient and productive than others, it is obvious that there will be a contest for the right to their use. If this contest were permitted to run on to all its consequences, the wars and destruction of life, would involve a great loss of capital and labor, and would seriously impair the productive powers of society. The desire to avoid such. evils, would be a sufficient reason for sustaining the right of property in land, one of the most important of natural agents, which probably had its origin in force. Society might either be itself the owner of the land, and lease it out, as in ancient Egypt and Hindoostan, or the absolute ownership might be vested in individuals.

When, as in a new country, there is an abundance of fertile and convenient lands, no one will pay a higher price. for the use of the lands already appropriated, than is equivalent to the cost of bringing the virgin soils into cultivation. But this is not a rent paid for the powers of nature, but a price paid for the use of the capital invested in occupation. In the price paid for the use of land or of any other natural agent, we must distinguish two parts, one, which is paid for the native powers of the soil, and one for the capital associated with it. The former only, is rent in the technical, scientific sense of the word. The latter, is regulated by the general laws of price and profits.

If we suppose any species of natural agency to be absolutely limited in quantity, it is plain that a period may arrive, when the supply of the commodity it is used to produce cannot be further increased, for when the whole quantity is in use, there can be no augmentation of its produce, unless improved processes of production are invented, a case which we are not now considering. At such a period, if the demand for the commodity in question continues to increase, its price will be a monopoly price, limited only by the demand. This would afford to the capitals employed a rate of profits higher than the average; this would in

turn, create a competition of capitals for the employment, and the excess of this rate of profits, would be paid to the owners of the natural agents as rent. If these owners were at the same time the proprietors of the capitals employed, their gains would be composed of both profits, and rents, technically so called.

If there were other natural agents of the same kind, but inferior in their powers of production, that is, if they yielded a smaller return to equal parts of labor than the agents be fore used, the natural price of the commodity, as produced by them, would be the limit of its monopoly price when produced by the more productive agents; for no one would pay more for it than the cost of acquiring, by employing these inferior agencies. If the demand still increased, until all of the second class of natural powers were employed to bring the requisite supply, there would again be an absolute limit on its quantity, and the monopoly price would rise, until it was equal to the natural price of the commodity, as produced on a third and still less productive class of agents, if there were any such.

As the difference between the natural and monopoly price formed rent in the first case, so the measure of that rent would be the limit of that monopoly price. This limit in the first case is fixed only by the demand; instances of this, are the lands which produce Tokay and Chambertin wines, the supply of which is incapable of increase, unless some new methods of cultivation should be discovered. In the second case, the monopoly price is limited by the natural price of the commodity produced on the inferior agents. The difference between this natural price and the natural price given by the superior agents, must all go as rent to the proprietors, which will equalize the profits of the capitals employed on the different agents. Lands employed in the production of corn are instances of this case. The mar ket price of corn does not oscillate about the natural price determined by the most fertile soils, but that fixed by the least productive soils which have to be used to render the required supply. Otherwise no one could afford to cultivate these soils.

It is immaterial whether we suppose the capitals, or labor, successively employed, to be applied to different classes of natural agents, differing in their productive powers, or to the same agents, which yet do not yield as large a return to

the last application, as to the first. In either case, different capitals would make different returns or profits; competi tion, as has been shown, would soon reduce all profits to the same level, and their difference would go as rent to the owners of the natural agents.

When any species of natural agency is limited in quantity or productive power, it may happen that the demand of society will not warrant any increase of the supply of the commodity produced, which is purchased at an increased cost of labor. No additional capital will be applied to such agents, and the supply will remain as fixed as the demand. All the new capitals accumulated will be employed in new channels, or applied to natural agents which yield undiminished returns. The whole labor of society will remain as productive as ever, and its capital will increase as fast as ever, though it will contain a smaller proportion of the commodity in question. But if the demand is so great as to induce the employment of labor and capital on these less productive agents, it is plain that the whole labor of society will produce proportionally less, and its capital will increase less rapidly. But if population or the supply of labor increases as fast as formerly, wages must decline with the fall of profits and the diminished increase of capital, which will continue until population lowers its rate of increase to that of capital. This fall of wages will be confined to those species of labor which receive so large a remuneration as to place their members among the rich classes of society, provided the commodity which is produced at an increased cost is a luxury for which the demand is comparatively small. The poor laborer, whose wages do not enable him to command it, even when at its natural price, will not care whether its monopoly price be high or low. The richly paid laborer will have to sacrifice more of some other pleasure to attain less of this; for him it will be a mere choice between luxuries. But if the commodity in question is a necessary of life, for which there is a universal demand, its increased cost of production and price will press most heavily on those laborers whose wages are consumed chiefly in necessaries, such as food and raiment. Where the quantity of food in the world, to be divided as wages among its inhabitants, bears a smaller ratio to their number, it matters not that all receive the same proportional share, every share will be smaller. This will not sensibly affect those whose

shares were far beyond their wants, but it will involve severe hunger for those who had barely enough. If this state of things continues, and the prices of food, and of the other necessaries of life, continue to rise, those laborers whose employments commanded the lowest wages will suffer more and more. As the price of necessaries rises higher and higher, they must give up more and more of the comforts of life, and ultimately even want for its very necessaries. The standard of subsistence will be lowered, and disease, begotten by want, will thin the population and retard its rate of increase. But before this result is reached, there will be a severe struggle to avert it, especially by those whose wages are not so high as to place them beyond want, and yet are not so low as to prevent the improvement of their mental powers. This struggle will stimulate the genius of man to invent new and improved processes of production, which may make the inferior class of natural agents produce as much as the superior formerly did, or in the language of Swift, "make two blades of grass grow where one grew before." Such inventions and discoveries benefit all classes of society; they reduce the natural price, because it costs less labor to produce; they raise wages and profits because capital increases more rapidly, and they even raise rents, because if all classes of natural agents are proportionally improved in productive power, the absolute difference in the amount of their productions must be greater.

It appears therefore that the supply of labor, or population, increases at the same rate with capital, or the means of subsistence, and wages and profits remain steady, so long as labor remains equally productive. When labor becomes less productive, capital increases less rapidly, wages and profits fall, and population ultimately increases less rapidly. But the inventive powers of man are constantly employed in maintaining and improving the productive powers of labor, and thereby keeping up and raising wages and profits.

Even where a country cannot directly improve the productive powers of such of its natural resources, as are limited in quantity or fertility, the same end may be reached, by producing a superfluity of such commodities as do not require increased labor to produce, and exchanging them with some other country, which can yield the desired articles at a smaller cost. The supply of land and corn is at present limited in England to a quantity below the wants