objects of real utility, by the difficulties they may expect to encounter at the commencement and during the progress of their labours.

Mr Sumner has excellently observed, in reference to the diffusion of education, that—“ Of all obstacles to improvement, ignorance is the most formidable, because the only true secret of assisting the poor is to make them agents in bettering their own condition, and to supply them, not with a temporary stimulus, but with a permanent energy. As fast as the standard of intelligence is raised, the poor become more and more able to co-operate in any plan proposed for their advantage, more likely to listen to any reasonable suggestion, more able to understand, and therefore more willing to pursue it. Hence it follows, that when gross ignorance is once removed, and right principles are introduced, a great advantage has been already gained against squalid poverty. Many avenues to an improved condition are opened to one whose faculties are enlarged and exercised; he sees his own interest more clearly, he pursues it more steadily, he does not study immediate gratification at the expence of bitter and late repentance, or mortgage the labour of his future life without an adequate return. Indigence, therefore, will rarely be found in company with good education."*

III. CIRCUMSTANCES WHICH DETERMINE THE RATE OF PROPORTIONAL WAGES.

Proportional

wages, or the share of the produce of his industry falling to the labourer, depend partly on the magnitude of the market or actual rate of wages at the time, and partly on the difficulty of producing the commodities which enter into and really form this market rate. Suppose, to illustrate this statement, that the wages actually paid to the labourers in Eng land, and the United States, are, when reduced to the standard of wheat, precisely equal: Under these circumstances, the condition of the labourer, or his power over the necessaries and luxuries of life, will be about the same in both countries; but the rate of proportional wages will, at the same time, be much higher in England than in the United States; for, owing to the greater fertility of the soils under cultivation in America, the same quantity of labour that would there produce 100 quarters of wheat, will not probably produce more than 60 or 70 quar. ters in England; and as the labourers, in both countries, get the same actual quantity of produce in return for a given quantity of work, they are obviously getting a greater proportion of the produce of their labour, and consequently a greater real value in England than in the United States.

It is plain, from this statement, that proportional wages may, as was formerly remarked, be increased at the same time that wages, if estimated in silver, corn, or any other commodity, are reduced; and such, in point of fact, is almost uniformly found to be the case, when tillage is extended over inferior

CIRCUMSTANCES WHICH DETERMINE, &c. 363

soils. Wherever the best lands only are cultivated, the proportion or share of the produce of industry falling to the labourer, is, generally speaking, small; but as labour is, under such circumstances, comparatively productive, a small share of its total produce, gives a large absolute quantity of necessaries and conveniences: while, in the advanced stages of society, and when cultivation is widely extended over lands of very inferior fertility, proportional wages are almost invariably high; but, owing to the increas ed difficulty that then obtains of producing supplies of food, these high proportional wages rarely afford a large supply of necessaries and convenien

ces.

SECTION VIII.

Division of the Produce of Industry, under Deduction of Rent, between Capitalists and Labourers-Definition of ProfitsMr Ricardo's Theory of Profits; sense in which it is true— Causes which occasion a Rise or Fall of Profits-Accumulation of Capital, not a cause of a Fall of Profits-Influence of the decreasing Fertility of the Soil, and of Taxation on Profits.

BEFORE attempting to investigate the circumstances which determine the rate of profit, it is necessary to be aware of those which determine the proportion in which the whole produce of industry, under deduction of rent, is divided between labourers and capitalists.

This latter inquiry may be disposed of in a few words. We have seen that the whole produce of the land and labour, of every civilized society, is always divided, in the first instance, into three, and not more than three, portions; the first of which goes to the labourers, the second to the capitalists or proprietors of stock, and the third to the landlords : And we have also seen, that the portion of the produce of industry which belongs to the landlords, or the rent of land, is altogether extrinsic to the cost of production, and that the circumstance of the landlords' consenting to give it up, would not occasion any change in the productiveness of industry, or any reduction in the price of raw produce. Supposing, then, that rent is deducted or set aside, it is obvious that all the remaining produce of the land and labour of every country must be primarily divided between the two great classes of labourers and capitalists. And it is further obvious, that if there were no taxes in a country, or if the rate of taxation was invariable, the proportion of the whole produce of industry, under deduction of rent, falling to the share of the labourers, could not be increased except by an equivalent reduction in the proportion falling to the share of the capitalists, and vice versa. Suppose, still better to illustrate this position, that the whole produce of industry in Great Britain is represented by the number 1000: Suppose, farther, that the landlords got 200 of this sum as rent, and that the remaining 800 is divided, in equal portions,

11

between labourers and capitalists. Under these circumstances, it is quite obvious, that nothing can be added to the proportion of the produce, or to the 400 falling to the labourers, except at the expence of the capitalists; nor to the proportion, or 400 falling to the latter, except at the expence of the for

mer.

Whether the 800 were increased to 1600, or reduced to 400, so long as those between whom it must be divided receive the same proportional shares, their relative condition must continue the same. And hence the propriety of the distinction between proportional and real wages, or wages estimated in money or in quantities of produce. If the productiveness of industry were to diminish, proportional wages might rise, notwithstanding that real wages, or the absolute amount of the produce of industry falling to the share of the labourer, might be diminished: and if, on the other hand, the productiveness of industry were to increase, proportional wages might be diminished, while real wages might, at the same time, be increased.

It is undeniably certain, therefore, that, wherever taxation is either unknown or constant, the whole produce of industry, under deduction of rent, is divided between capitalists and labourers; and that the proportion of that produce falling to either party, varies inversely to the proportion falling to the other-that is, the proportion falling to the capitalists is increased when that falling to the labourers is diminished, and diminished when it is increased.