On no subject that we have been lately discussing have we so materially
differed as on the one now occupying our attention. Your position, if
established, would, I think, overturn both your theory of rent and
population, for I understand you to maintain that the higher the price
of corn rises, in consequence of more men being employed on the poorer
land, the greater will be, not only the surplus produce after paying the
labourers, but the ratio of that surplus produce to the whole capital
employed on the land. If this be true there is no check to the increase
of population, and food can be increased in a ratio exceeding that at
which mankind increase. Your statement requires that with every
additional labourer not only an equal increase but a greater increase of
surplus produce should be obtained. More labourers may then be employed
without limit, and rent and profit together must not only increase, but
increase in a geometrical progression. I am sure I am correct in thus
stating your proposition, because if as you say the whole corn expense
of production per quarter will be diminished with every rise of price,
the surplus must increase in a geometrical ratio with the capital
employed. If you meant only that the surplus produce would increase with
every accumulation of capital on the land, though in a diminishing ratio
to the capital employed on the land, that is not only advanced, but
strenuously maintained as the groundwork of my theory, and is the basis
also on which my table is formed. You have misapprehended a passage in
my last letter. I certainly never said, nor ever thought, that any good
reason could be given for an increased number of men being required to
produce precisely the same quantity of corn from precisely the same
land. What I said was that, if at one period the number of labourers
required to produce ten millions of quarters of corn was two-and-a-half
millions of men, and at another, in consequence of increased demand,
fifteen millions of quarters could not be produced with a portion of
worse land at a less cost of labour than that of four-and-a-half
millions, at this latter period a production of ten millions would
require three millions of men, because fifteen is to four-and-a-half as
ten to three, and if we supposed the price of corn under such
circumstances to increase in the proportion of 2-1/2 to 3, a supposition
much more favourable to your view of the question than we should be
obliged to concede, yet that it would not support the conclusions to
which you arrive, but, on the contrary, would prove my theory to be the
correct one. If the calculation had been made, as you think would have
been more correct, on an increase from ten millions to ten-and-a-half
millions, the result would have been the same, but we should be puzzled
with the decimals or fractions which must be employed on such a
supposition. I agree with you 'that the natural price of corn depends
entirely upon the price of the last addition, and it does not matter
whether with regard to the old land a capital yields 50 per cent. rent
and profit or 20 per cent. In either case the price of corn on such land
has nothing to do with the cost of production.' I do not see how the
admission of this fact can assist your argument, which relates only to
the ratio of the surplus produce to the whole capital employed.
I cannot conceive by what argument you could shew that it might be
possible that the addition of another labourer on the land would not pay
his expenses, although not more than a quarter of the population were
employed upon the land. Allowing, as I most fully do, that no pressure
can destroy rents, yet as the last portions of capital employed on the
land pay no rent, it is to me inconceivable that there would be no
inducement to employ more labourers whilst their average production
should be three times more food than they could themselves consume. If
the whole of this surplus, after maintaining in the most frugal manner
the owners of stock, were absorbed by the landlords as rent, they would
increase their revenue, and employ more labourers on the land, if any
among them saved any part of his income and lent it at the common rate
of interest. I am sorry you do not come to town for the next club.
Yours truly,
DAVID RICARDO.