If profit be low, it is because capital is in excess. But competition, the moving force in both instances, has been well nigh lost sight of. The land last cultivated has furnished some of our later economists with the materials of a formula-where the three elements of rent, and profit, and wages, have been made to enter as symbols do into an equation, by means of a few transpositions upon which, the whole doctrine and philosophy of the subject has been newly cast, and are held to have been infallibly expounded.

"And it is curious to observe the proceeds of this new mode of reasoning, through which, by a certain dexterous algebraic play, results are elicited the most unexpected, and certainly the most opposite to all experience. One specimen may suffice. When once the produce of the last cultivated land enters as a sort of fixed quantity into an argument; then, representing, as it does, the sum of wages and profit, it will follow of course that when wages rise it can only be at the expense of profit, and when profit rises it can only be at the expense of wages-the one being high when the other is low, and conversely. The strange conclusion educed from this is, that by increasing the wages of labour we are on the high road to the underselling of our neighbours in the foreign markets; because that the dearer the labour expended in the preparation of export articles, the cheaper can it be afforded when presented for sale. And the reason of this is, that profit being just as much lower as wages are higher, we make a saving on the cost of the article, with every new transfer in the course of its sales or stages of preparation, till the ultimate price may in fact be very much reduced by the repetition of this effect at each of the successive centages. And hence the paradox in question, advanced too with a sort of axomatic certainty. It is a striking example of the extravagance into which men are sure to fall, when, forsaking the obvious and real principles of a subject, they give the precedency, over all sense and all experience, to the categories of a school.

"We shall be saved from all such devious conclusions, if we only keep in sight the proper and immediate causes by which both profit and wages are determined. There is a greater identity of principle between them than is commonly adverted to. The one depends on the proportion which the quantity of labour bears to the effective demand for its products; and the other, also on the proportion which the quantity of capital bears to the effective demand for its products. Or just recurring to the old language and style of conception upon this subject, we should say that the one varies with the intensity of the competition among labourers for employment, and that the other varies with the intensity of the competition among capitalists for business. Should there then be a high standard of enjoyment among labourers, they will not marry so as to overstock the country with population, and so just because their taste is high their wages would be high; thus landing us in this important and delightful conclusion, that the people collectively speaking have their circumstances in their own hands-it being at the bidding of their

collective will whether the remuneration for their work shall be a scanty or a sufficient one. The same principle has not been extended to profit, though it be as strictly applicable to the one element as to the other. It is for each capitalist to determine how much of his profits he shall expend on personal or family indulgences, or how much of them he shall reserve for additional outlays upon his business. Should there be a general and voluntary descent among capitalists in respect of expenditure, this of itself, by adding to the investitures in trade, would produce a general fall of profit. Whereas by means of expenditure in this class of society, profits might be sustained at any given level-a level as much determined by the standard of enjoyment or collective will of capitalists, as wages are by the collective will of labourers, However simple and obvious this consideration may be, yet the most important, and as yet unnoticed, conclusions are deducible therefrom. Our only inference at present is, that there is no headlong necessity in any state of society for either a wretchedly low wage or a ruinously low profit. Both in fact are dependent on moral causes, There is a moral preventive check, which, if put in steady operation throughout the labouring classes, would keep wages high; and, however little adverted to, which operating among capitalists, would keep profit high. Instead of wages being necessarily low when profits are high, or conversely, both may rise contemporaneously or fall contemporaneously. In other words, there is still a high way open to us both for a well conditioned peasantry, and a prosperous order of merchants and master manufacturers in the land. There is no irreversible fatality in that march of agriculture among the poorer soils, which has been represented as bearing down profit and wages. Instead of this, profit and wages may each, in any point of the progress, make their own resolute stand, and arrest the march of agriculture. Labourers, on the one hand, could make good higher wages; capitalists, on the other, could make good their higher profit-and thus, so far from their condition being overruled by the state of the husbandry, they may jointly overrule that state; and just by the position which they might voluntarily unite in keeping up, may they both lower the rent of land and somewhat limit its cultivation. Instead of being borne down by the tide, they could withstand and stem it; and, instead of lying prostrate before the absorbing rent of the landlords, they might prescribe their own bounds to the wealth of the proprietors of the soil which it could not overpass.”

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Mr. Stirling re-asserts this view at page 81 of his treatise :"The last observation which I shall make on this subject is, that there is no ground to conclude that there can be no rise in the value of labour without a fall of profits, and that the rate of profits can never be increased but by a fall of wages."

But let us return to our author, whose views on this and other parts of the science, we rejoice in observing, to be so much in harmony with what we have long regarded as its truer and better

principles. He conceives aright, and in right order, of this matter, just by discarding every other principle than that of demand and supply from his reasonings, whether on the value of commodities or the wages of labour; and the following is his plain and just account of it:

"In fertile and newly peopled countries, corn is cheap, and labour, on the other hand, so dear that menials will scarce bear to be called servants. Why is this? Plainly because in such countries grain is abundant and men are scarce, in proportion to the demand.

"In old countries, on the other hand, countries which have more nearly reached the limits of cultivation, corn is dear, while labour is so cheap that mechanics run about the streets begging for employment, and servants submit without repining to the hardest work. Again, why is this? Plainly for the directly opposite reason, that, in countries so situated, grain is scarce and labourers are abundant, compared with the demand."-Pp. 69, 70.

His next or third book is on the subject of profits. On this subject Mr. Stirling takes his lesson from the place which we have already assigned as that whence the greatest number of lessons, and these the most important in political economy, are to be gathered the land last taken into cultivation, yielding therefore no rent, and where the whole return is made up of wages and profit. Let there be laid out on the cultivation of a portion of such land one hundred quarters of wheat, and let the return be one hundred and twenty quarters-this being the general proportion of the return to the outlay on the soils last entered by the plough; and such a return from such an outlay indicates a profit of twenty per cent. Mr. Stirling then demonstrates in the usual way, that, after deducting for the more or less hazardous and more or less disagreeable nature of different employments, there cannot be two rates of profit in a country— so that we may learn from the proportion of the return to the outlay on the last cultivated soils, what the general rate of profit is throughout all the branches of industry in a land.

There is one respect in which Mr. Stirling has not carried the subject of profit so far as he has done that of wages-not prosecuted to the same length his enquiry into the causes of its variation from age to age; or, in other words, not gone so deep into the real philosophy of the subject. When we speak of the variation of profits from age to age, it is to distinguish what we mean from those temporary and fluctuating variations, which are corrected by the transference of capital from one employment to another. There is a natural and a market price of labour, andin like manner it might be said that there is a natural and a market rate of profit. Now, it is rightly said by Mr. Stirling, that the natural price of labour is determined by the standard of enjoy

ment among labourers-so that with every rise in the standard of enjoyment, there necessarily take place later marriages, and a market less overladen with the supply of labour than otherwise, and so a greater price or remuneration for labour than otherwise. And, in like manner, though it has never till of late been adverted to, would the rate of profit rise or fall with the standard of enjoyment among capitalists. Should capitalists lower their standard of enjoyment, so as to spend as little and vest as much of their yearly income on the enlargement of their capital as possible, profits would obviously sink under such an operation; and, on the other hand, by the reverse process of capitalists spending more and laying out less on the business of next year's merchandise, profits would as obviously rise. So that if it be the collective will or habit of labourers which fixes the rate of wages, or the remuneration of labour, it is no less the collective will or habit of capitalists which determines the rate of profit, or the remuneration for the laying out of capital.

And on the subject of rent Mr. Stirling seems to have fallen into a mistake, or rather, perhaps, an inadvertency, when he intimates, as in page 114, that " rent arises from the unequal fertility of soils;" and, in page 206, that "it can be demonstrated that every rise of rent and every fall of profits is caused solely by the diminishing returns obtained from capital applied to land." Now, had there been but one quality of land all over the earth, and this equal to the best and highest that is now upon its surface -had such been its nature, that, on the application of a certain capital, it yielded from year to year all it had to give, and was incapable of yielding more by means of additional capital,-still in the absence of these conditions there would have been rent, although these conditions be represented by Ricardo as its sole causes; and in these he seems to have been unaccountably followed by Mr. Stirling, who on other subjects discriminates so well between the cause and the effect, or the cause and the indication. For the production of rent in the circumstances which we have now specified, all which is necessary is that there be property in land, and that this land should yield a return greater than what suffices for the wages of the labour, or the profits of the capital applied to it. There is a certain wage upon which the labourer is satisfied to live and have a family, so as to keep up the supply of labour, and this, whether there be poorer soils in existence or not than that which he is now cultivating. And there is a certain profit on which the capitalist is satisfied to embark his stock in agriculture or any thing else, and this equally irrespective of the existence or non-existence of poorer soils than that which he is now farmng. Should the produce exceed the sum of this wage and of this profit, the surplus goes to the land

lord in the form of rent, whether there be any gradation of quality in different lands and gradation of returns from the same land or not. If there be such soils, doubtless it is not they which have either caused the rent or regulated the profit, only if the sum of wages and profit caused by separate influences altogether do not exceed the produce of these they will be entered on. The produce of the soil last cultivated is not the originator of either of these elements, it is but the exponent of their amount taken jointly. And the rent which accrues from soils of superior produce to this last, is but that residuum of the produce which has been left over from the land, after the profit and wages have taken their respective shares of it-the natural rate of this profit being the remuneration which capitalists are collectively willing to trade for, and the natural rate of these wages being what labourers are collectively willing to work for. It is the confounding of effects with efficients, of passive results with positive and originating causes-it is the confounding of these categories which has vitiated the logic and given rise to the erroneous formulæ of Mr. Ricardo-an error that has been well pointed out by our author on the subject of profits and wages, and so of prices; but from which he has not yet freed himself on the subject of rent. It will be a mighty clearance for the science when these things come to be better understood.

We crave the indulgence of our readers for another extract from a work of many years back on the subject of rent:

"It is a signal error in a recent theory of rent, that the difference of quality in soils is the efficient cause of it. The difference between the produce returned for the same labour from a superior soil, and from the one last entered upon, is but the measure and not the cause of rent. Had there been no gradation of soils, but had all been of the same uniform fertility with any given land which now affords rent, that land would have afforded rent still, and the same rent which it does at present. That land may yield rent, all which is necessary is that with the price obtained for its produce, the occupier can more than pay the wages of the labour and the profits of the capital bestowed upon it. It is the overplus which constitutes the rent of this land; and which would have been paid though there had been no land inferior to itself in existence. In affirming that it is the existence of this inferior land which originates the rent, there is a total misapprehension of what may be termed the real dynamics of the subject.

"The process is this: On land of a given quality, and anterior to its being rented, the produce or its price is shared between the workmen who laboured it and the capitalist by whom it is occupied. But there are two reasons why this state of things might not be stationary, the one connected with the taste and choice of the workmen, the other with the taste and choice of the capitalist. The workmen may be