But in the progress of agriculture in England during the present century, it is allowed, by all who have attended to thesubject, that though the amount of rent has increased, the rent is now a smaller fraction of the gross produce than it wasformerly.The rent was in former times one third of the gross produce.It is now one fourth, or one fifth.
How is this to be explained?
The same result follows if we compare England and France; for France, in matters of agriculture, may be regarded asrepresenting England at an earlier stage.
Thus M.Lavergne, who has studied the causes of the superiority of England to France, and published his results( L'Economie Rurale de l'Angleterre , 3rd Ed.1858, p.98), states the gross produce of a hectare in France to be 100, and therent 30; in England the gross produce for the same quantity of land is 250, and the rent is 75.The rent in the former case is3/10, in the latter it is still 3/10, though the actual amount of the rent is more than doubled.
Again I ask, how is this to be explained? It appears to mc to be one of the most important problems in Political Economy;both as to its bearing upon the Doctrine of Rent, and as to its bearing upon the nature of agricultural progress.How is it tobe solved?
The only solution must be this: that the nature of agricultural progress in these cases is not that which is supposed in thetheory as stated by Ricardo; namely, the increased difficulty and expense of raising produce from land; or, as it is alsoexpressed, the extension of cultivation to inferior soils.
But if it is not that, what is it? 1 reply, it is the use of Auxiliary Capital; that is, capital employed in machines, (ploughs,carts, &c.) manure, draining, working cattle, and all other contrivances by which the agricultural labour of man is assisted.
Such capital is employed to a very large extent in England.It appears (Jones, On Rent , p.223), from various returns made atdifferent times to the Board of Agriculture, that the whole capital agriculturally employed is to that applied to the support oflabourers, as 5 to 1: that is, there is four times as much auxiliary capital used as there is of capital applied to the maintenanceof labour and directly in tillage.In France, the auxiliary capital used does not amount (as appears from Count Chaptal'sstatement) t.o more than twice that applied to maintain rustic labour.In other European countries the quantity of auxiliarycapital is probably much less.
Now, how will this auxiliary capital affect the question of rent?
In this way.The capital thus employed is to a curtain extent, fixed capital that is, it lasts a certain number of years, andrequires to be replaced only after that time.Thus a capital of ?o which wears out in 10 years may be replaced by a return of? a year.Or rather, a capital of ?0 which wears out in 10 years may be replaced with profits by a return of ? a year.
Now, what will be the effect of such a capital on Rents?
This capital (?0 an acre) will not be employed, unless it will produce a return of ? an acre.It must therefore increase theproduce to at least that amount.
Suppose, as before, three qualities of land A B Cof which the produce is 20 15 10, respectively.
The gross produce is here 20+15+10 45, and the rent is 10+5=15, and as 15 is one third of 45, the rent is of the gross produce.
Let now the capital (say ?0 an acre) be applied, and let the produce now become greater than it was for A B Cby 8 7 6, A and B thus still retaining their superiority over C: the produce now is A B C28 22 16.
The gross produce is now 28 + 22 + 16=66, and the rent is 12+6=18, the rent is 18/66 of the produce, which is a smallerfraction than before, though the rent itself has increased from 15 to 18.
Let us make a supposition of a.still larger increase of produce by the application of capital.The produce without the capitalbeing as before, for A B C20 15 10.
Let the addition resulting from the application of capital be 16 15 14:
the produce will now be 36 30 24.
The gross produce is 90, the rent is 12+6=18, and 18 is 1/5 of 90; so that in this case, though the rent is increased from 1 to 18, it is, as a fraction of theproduce, diminished from one third to one fifth.
We here suppose that the produce of the land C, which was xo before the application of the capital, is 24 with the capital.
The amount 10 corresponds to the wages of labour, and 14 is required to replace the capital with profits.
M.Lavergne gives the following estimate of the distribution of the produce for an English and for a French hectare, (Ec.Rur.p.98):
Here the Accessory Expenses are the return which is requisite to replace the Auxiliary Capital.As we see, he makes them iotimes as great in England as in France.
We see that while the farmer in England pays 75 in wages, he requires 90 for his profits, and for keeping up his stock.
Since his profits are estimated at 40, we may estimate his capital at 400, which is more than 4.times what he pays in wages;as I have said that those who judge from facts have estimated it.
But all these numbers are hypothetical, and introduced merely for the sake of illustrating by example my proposition.Theproposition is this: that rents may increase not only by the extension of cultivation to poorer soils; but also by theimprovement of methods of culture; and that the increase of produce and of rents in England has arisen from suchimprovement, much more than from the extension of culture to worse soils.
Further, this improvement of the methods of culture has involved the application of a great amount of capital, as auxiliary tothe labour of man in cultivation.
We know such an application of capital to have taken place; and the proof that this is the real case is found in the fact, thatthe rent has become a smaller portion of the gross produce.
