Observations on the Effects of the Corn Laws, and of a Rise or Fall in the Price of Corn on the Agr | Page 7

impossible is found to exist; and that a given quantity of corn, notwithstanding the fluctuations to which its supply and demand must be subject, and the fluctuations to which the supply and demand of all the other commodities with which it is compared must also be subject, will, on the average of a few years, at all times and in all countries, purchase the same quantity of labour and of the necessaries and conveniences of life.
There are two obvious truths in political economy, which have not infrequently been the sources of error.
It is undoubtedly true, that corn might be just as successfully cultivated, and as much capital might be laid out upon the land, at the price of twenty shillings a quarter, as at the price of one hundred shillings, provided that every commodity, both at home and abroad, were precisely proportioned to the reduced scale. In the same manner as it is strictly true, that the industry and capital of a nation would be exactly the same (with the slight exception at least of plate), if, in every exchange, both at home or abroad, one shilling only were used, where five are used now.
But to infer, from these truths, that any natural or artificial causes, which should raise or lower the values of corn or silver, might be considered as matters of indifference, would be an error of the most serious magnitude. Practically, no material change can take place in the value of either, without producing both lasting and temporary effects, which have a most powerful influence on the distribution of property, and on the demand and supply of particular commodities. The discovery of the mines of America, during the time that it raised the price of corn between three and four times, did not nearly so much as double the price of labour; and, while it permanently diminished the power of all fixed incomes, it gave a prodigious increase of power to all landlords and capitalists. In a similar manner, the fall in the price of corn, from whatever cause it took place, which occurred towards the middle of the last century, accompanied as it was by a rise, rather than a fall in the price of labour, must have given a great relative check to the employment of capital upon the land, and a great relative stimulus to population; a state of things precisely calculated to produce the reaction afterwards experienced, and to convert us from an exporting to an importing nation.
It is by no means sufficient for Dr Smith's argument, that the price of corn should determine the price of labour under precisely the same circumstances of supply and demand. To make it applicable to his purpose, he must show, in addition, that a natural or artificial rise in the price of corn, or in the value of silver, will make no alteration in the state of property, and in the supply and demand of corn and labour; a position which experience uniformly contradicts.
Nothing then can be more evident both from theory and experience, than that the price of corn does not immediately and generally regulate the prices of labour and all other commodities; and that the real price of corn is capable of varying for periods of sufficient length to give a decided stimulus or discouragement to agriculture. It is, of course, only to a temporary encouragement or discouragement, that any commodity, where the competition is free, can be subjected. We may increase the capital employed either upon the land or in the cotton manufacture, but it is impossible permanently to raise the profits of farmers or particular manufacturers above the level of other profits; and, after the influx of a certain quantity of capital, they will necessarily be equalized. Corn, in this respect, is subjected to the same laws as other commodities, and the difference between them is by no means so great as stated by Dr Smith.
In discussing therefore the present question, we must lay aside the peculiar argument relating to the nature of corn; and allowing that it is possible to encourage cultivation by corn laws, we must direct our chief attention to the question of the policy or impolicy of such a system.
While our great commercial prosperity continues, it is scarcely possible that we should become again an exporting nation with regard to corn. The bounty has long been a dead letter; and will probably remain so. We may at present then confine our inquiry to the restrictions upon the importation of foreign corn with a view to an independent supply.
The determination of the question, respecting the policy or impolicy of continuing the corn laws, seems to depend upon the three following points:--
First, Whether, upon the supposition of the most perfect freedom of importation and exportation, it is probable that Great