most important considerations in the whole compass of political economy, as such improvements unquestionably open the largest arena for the employment of capital without a diminution of profits.'1 But he does not seem to think that even in the most favourable circumstances such improvements could prevent returns from diminishing for more than a limited, though possibly long period, such as 'hundreds of years,'' and in another place he says outright 'The cost of producing corn and labour continually increases from inevitable physical causes, while the cost of producing manufactures and articles of commerce sometimes diminishes, sometimes remains stationary, and at all events increases much slower than the cost of producing corn and labour.'3 By 1822, however, Ricardo seems to have been rather more inclined to leave the question open. In his pamphlet On Protection to Agriculture, he says: 'In the progress of society there are two opposite causes operating on the value of corn; one, the increase of population and the necessity of cultivating, at an increased charge, land of an inferior quality, which always occasions a rise in the value of corn; the other, improvements in agriculture or the discovery of new and abundant foreign markets, which always tend to lower the value. Sometimes one predominates, sometimes the other, and the value of corn rises or falls accordingly.'4 Yet when Attwood made a long attack upon his theory in the House of Commons, and insisted that the returns to agricultural industry do not diminish but increase with the actual historical progress of society, Ricardo did not admit the fact and explain, as many of his followers would have done at a later period, that it was not incompatible with a 'tendency' to diminishing returns.5 Shortly after the publication of Ricardo's Essay on the Influence of a Low Price of Corn, Torrens brought out An Essay on the External Corn Trade; containing an inquiry into the general principles of that important branch of traffic; 1 Political Economy, 1st ed. p. 331. 3 P. 300, cp. pp. 166 note, 313, 370. 5 Hansard, vol. vii. p. 392 ff., May 7, 1822. 2 P. 332. 4 Works, p. 475. an examination of the exceptions to which these principles are liable; and a comparative statement of the effects which restrictions on importation and free intercourse are calculated to produce upon subsistence, agriculture, commerce, and revenue. This work, which, though as longwinded as its title, quite deserves the praise awarded to it by Ricardo,1 affords another example of the way in which circumstances had impressed the idea of diminishing returns upon the minds of the economists of the time. For Torrens also, writing before he had seen Malthus's Grounds of an opinion and Nature and Progress of Rent, or West's Application of Capital, or Ricardo's Influence of a Low Price of Corn,2 opposed restriction of imports on the ground that it must cause a diminution of returns by forcing the cultivation of inferior land: 'Every restriction,' he says, 'on the import trade in corn which forces into cultivation land of inferior quality, not only deprives the particular portions of labour and capital thus turned upon the soil of their most beneficial employment, but, by increasing the natural price of corn, lowers universally the productive powers of labour and capital, and gives a general check to the prosperity of the country.' 8 § 5. Later history of the theory that Increasing Density of Population is connected with Diminishing Returns to industry. The later history of the subject has to do mainly with the gradual substitution of a pseudo-scientific law of a 'tendency' to diminishing returns for the rough general rule of diminishing returns rashly deduced from experience during the great war. In the Essay on the Corn Trade, Torrens had scarcely committed himself to the theory that the diminution of returns is a general rule, but in his later work, the Essay on 16 'Among the most able of the publications on the impolicy of restricting the importation of corn may be classed Major Torrens's Essay on the External Corn Trade. His arguments appear to me to be unanswered, and to be unanswerable.'-Ricardo, Works, p. 164, note. 2 Essay on the Corn Trade, 3d ed., 1829, Preface, p. ix. Ibid., 1st ed. pp. 73, 74. the Production of Wealth (1821), he teaches it without hesitation. James Mill again and again speaks of an actual diminution of returns as if it were not only a general rule, but an invariable rule, except in cases where colonists from civilised countries have the power of cultivating without limit the most productive species of land.' To inventions and discoveries he gives no attention. M'Culloch states the general rule in his usual clear and emphatic tone. In the earlier periods of a nation's progress, he tells us, when population is comparatively limited, it being only necessary to cultivate the best lands, industry is comparatively productive.' 4 'In manufactures the worst machinery is first set in motion, and every day its powers are improved by new inventions; and it is rendered capable of yielding a greater amount of produce with the same expense. 'In agriculture, on the contrary, the best machines, that is, the best soils, are first brought under cultivation, and recourse is afterwards had to inferior soils, requiring a greater expenditure of capital and labour to produce the same supplies. The improvements in the construction of farming implements and meliorations in agricultural management, which occasionally occur in the progress of society, really reduce the price of raw produce, and, by making less capital yield the same supplies, have a tendency to reduce rent. But the fall of price, which is permanent in manufactures, is only temporary in agriculture.' 'From the operation of fixed and permanent causes, the increasing sterility of the soil must, in the long run, overmatch the increasing power of machinery and the improvements of agriculture.'" The belief that the increase of population, in spite of all improvements, in the long run necessitates the employment of a larger and ever larger proportion of the labour of the world in the production of the prime necessaries of life, practically implies that as population increases, mankind become poorer and poorer, unless the diminishing productive 1 With an appendix in which the principles of political economy are applied to the actual circumstances of this country. 2 Pp. 115 ff., 144 ff., far too long-winded to quote. Elements, esp. 1st ed. p. 41; 3d ed. p. 55. See the sections on rent, • Principles, 1825, p. 205. wages, and profits, passim. • Ibid., pp. 277, 278. • Ibid., p. 383. ness of the labour of the agriculturists is overbalanced by the increasing productiveness of the labour of the remainder of the community, which is unlikely to be the case, since the remainder of the community must be a diminishing proportion of the whole, At last, in two lectures delivered at Oxford in 1828, Senior vontured to protest against this gloomy view. Population, ho assorted, does not actually increase with such harmful rapidity: This evil,' he said, of a redundant population, or to speak more intelligibly, of a population too numerous to be adequately and regularly supplied with necessarios, is likely to diminish in the progross of improvement.... But I must admit that this is not the received opinion. The popular doctrine certainly is that population has a tendency to increase beyond the moans of subsistence, or in other words, that whatever be the existing moana of aubaistence, population has a tendency fully to pound up with thom, and even to struggle to pass beyond them, and shopt back principally by the vice and misery which that struggle I admit that population has the power (considered ababrackedly) so to moroase, and I admit that under the influence of unWias tuatitutions that power may be exercised, and the amount of subabtouço beat a amaltor proportion than before to the number of people, and that vice and misory, more or less intense and diffused, according to thu phoumabanova of each case, must be the result. What I deny by, that undor wise matitutions there is any tendency to this state of things. I believe the tendency to be just the reverse.' tto sont the tectures to Malthus, and politely invited him 4. Bog l. courva on Population delivered before the University of Oxford in Are cerveza B6, a which sa added a correspondence between the author and A AVATA. Ag744% 18:29, pp. 30, 36. Alt. Monat (Molthus med his Work, pp. 3, 4) says that Senior 'confessed with penitence that ho had trusted more to his ears than to his eyes for a knowledge of Ala'thuaian doctrine, and had written a learned criticism mob of the opinion of Mr. Ala thua, but of that which “the multitudes who have tollowed, and the tow who have endeavoured to oppose" Mr. Malthus, have assumed to be his opinion It Malthus's opinion was really different from what the multitudes who followed him and the few who opposed him imagined it to be, it is difficult to soo why Senior should have been penitent for having ortioned much the most important of the two opinions. But, as Semor very well know. Malthus& opinion was not different from that which his followers ascribed to bum. Semor & apology for having attributed to him the opinion of his followers wa.cd, as he say, is inconsistent with a passage in the A'sang on Penantición, la merely a polite method of asking Malthus to explain his own incon&QZONE to assent to this new doctrine. Malthus declined. As to the past, he said, 'when you state as a fact, that food has generally increased faster than population, I am unable to go along with you.' As to the future, he said it was obvious. that some retardation of the growth of population is inevitable, and he questioned whether we are entitled from past experience to expect that this will take place without some diminution of corn wages and some increased difficulty' of maintaining a family.' But he showed some desire to escape from the exact question at issue:— 2 'The main part of the question with me,' he wrote, 'relates to the cause of the continued poverty and misery of the labouring classes of society in all old states. This surely cannot be attributed to the tendency of food to increase faster than population. It may be to the tendency of population to increase faster than food.'s And Senior was perhaps justified in declaring that the controversy had ended in agreement. This discussion, with its absurd metaphors about 'population pressing against food,' and being 'ready to start off,' was a complete anachronism in leaving the question of diminishing returns and going back to the old vague comparisons of the increase of population and the increase of food. The first writer of eminence who definitely attacked the belief that the returns to agricultural industry have generally diminished, and continue to diminish, in consequence of the increase of population, was Dr. Chalmers. One of the most plausible reasons for believing in the general rule of diminishing returns is the argument that the very fact that cultivation is extended to land inferior in point of situation or fertility to that already in use, shows that the productiveness of agricultural industry has declined. Labour on the new land, it is said, is of course less productive than labour on the old, and therefore the returns to the least productive agricultural industry must have diminished. Ricardo himself argued thus. The lands,' he says, 'which are now taken into cu.tivation are much inferior to the lands in cultivation three centuries ago, and therefore the difficulty of 1 Correspondence in Senior, Lectures on Population, p. 66. 2 Ibid., p. 70. 3 Ibid., p. 72. • Ibid., p. 76. • Ibid., p. 61. |