An Inquiry into the Nature and Progress of Rent, and the Principles by which it is Regulated. | Page 7

producers.
It has been stated, in the new edition of the Wealth of nations, that the
cause of the high price of raw produce is, that such price is required to
proportion the consumption to the supply.(8) This is also true, but it
affords no solution of the point in question. We still want to know why

the consumption and supply are such as to make the price so greatly
exceed the cost of production, and the main cause is evidently the
fertility of the earth in producing the necessaries of life. Diminish this
plenty, diminish the fertility of the soil, and the excess will diminish;
diminish it still further, and it will disappear. The cause of the high
price of the necessaries of life above the cost of production, is to be
found in their abundance, rather than their scarcity; and is not only
essentially different from the high price occasioned by artificial
monopolies, but from the high price of those peculiar products of the
earth, not connected with food, which may be called natural and
necessary monopolies.
The produce of certain vineyards in France, which, from the peculiarity
of their soil and situation, exclusively yield wine of a certain flavour, is
sold of course at a price very far exceeding the cost of production. And
this is owing to the greatness of the competition for such wine,
compared with the scantiness of its supply; which confines the use of it
to so small a number of persons, that they are able, and rather than go
without it, willing, to give an excessively high price. But if the fertility
of these lands were increased, so as very considerably to increase the
produce, this produce might so fall in value as to diminish most
essentially the excess of its price above the cost of production. While,
on the other hand, if the vineyards were to become less productive, this
excess might increase to almost any extent.
The obvious cause of these effects is, that in all monopolies, properly
so called, whether natural or artificial, the demand is exterior to, and
independent of, the production itself. The number of persons who
might have a taste for scarce wines, and would be desirous of entering
into a competition for the purchase of them, might increase almost
indefinitely, while the produce itself was decreasing; and its price,
therefore, would have no other limit than the numbers, powers, and
caprices, of the competitors for it.
In the production of the necessaries of life, on the contrary, the demand
is dependent upon the produce itself; and the effects are, in
consequence, widely different. In this case, it is physically impossible

that the number of demanders should increase, while the quantity of
produce diminishes, as the demanders only exist by means of this
produce. The fertility of soil, and consequent abundance of produce
from a certain quantity of land, which, in the former case, diminished
the excess of price above the cost of production, is, in the present case,
the specific cause of such excess; and the diminished fertility, which in
the former case might increase the price to almost any excess above the
cost of production, may be safely asserted to be the sole cause which
could permanently maintain the necessaries of life at a price not
exceeding the cost of production.
Is it, then, possible to consider the price of the necessaries of life as
regulated upon the principle of a common monopoly? Is it possible,
with M. de Sismondi, to regard rent as the sole produce of labour,
which has a value purely nominal, and the mere result of that
augmentation of price which a seller obtains in consequence of a
peculiar privilege; or, with Mr Buchanan, to consider it as no addition
to the national wealth, but merely as a transfer of value, advantageous
only to the landlords, and proportionately injurious to the consumers?
Is it not, on the contrary, a clear indication of a most inestimable
quality in the soil, which God has bestowed on man - the quality of
being able to maintain more persons than are necessary to work it? Is it
not a part, and we shall see further on that it is an absolutely necessary
part, of that surplus produce from the land,(9) which has been justly
stated to be the source of all power and enjoyment; and without which,
in fact, there would be no cities, no military or naval force, no arts, no
learning, none of the finer manufactures, none of the conveniences and
luxuries of foreign countries, and none of that cultivated and polished
society, which not only elevates and dignifies individuals, but which
extends its beneficial influence through the whole mass of the people?
In the early periods of society, or more remarkably perhaps, when