according as the country is in a prosperous or declining state; and that what remains in ordinary manufactures, after giving this support to the labourer, goes as profits to his employer; that agriculture yields a still greater produce; and that what remains, deducting the usual wages of the labourer, and the usual profits to the farmer, is naturally demanded and received by the landlord as rent. Thus the order in which he considers the three great sources of revenue is, 1st, wages-2d, profits-3d, rent."

According to the theory of rent now generally adopted by political economists, the rent of land is regulated by, and depends upon, the different degrees of fertility of the soil, whereby some land is calculated, with a similar outlay, to return a greater amount of produce than another. There is some land, it is said, which is just sufficiently fertile to repay the expenses of cultivation, with a reasonable profit to the farmer, and no more-such land can pay no rent. When, by the progress of population, the demand for agricultural produce comes to be so great, as to raise the price sufficiently, to allow of the cultivation of land of a quality inferior to that last spoken of, then will rent commence upon it. It will be the same thing to a farmer whether he cultivates the inferior land, free

of rent, or the land before cultivated subject to a rent, equivalent to the difference in the productiveness of the soils. According to this theory,

"The productiveness," says Mr. Longfield, "of the worst land under cultivation, regulates the rate of profit. The produce of such land belongs to the farmer, after supporting his labourers according to the rate at which that sort of labour is commonly maintained in the country. Hence, as population increases, and recourse is had to inferior soils, the rate of profits must decline, as the farmer must support his labourers at the same rate, or nearly the same rate, out of a smaller fund. As agricultural profits decline, the rate of profits of capital employed in manufactures must, of course, decline also, This theory alters Smith's order, and considers, 1st, rent-2d, wages-3d, profits."

Now, it is perfectly true that this is the order in which later political economists have considered the three great sources of income; but it does not

appear very clear from Mr. Longfield's explanation that it is so; and he would appear greatly to misunderstand, or to have altogether overlooked the reason why it is so. This reason we shall find, in the words of Mr. Mill, to be as follows:

"When any thing is to be divided wholly between two parties, that which regulates the share of one, regulates also, it is very evident, the share of the other; for whatever is withheld from one, the other receives; whatever, therefore, increases the share of the one, diminishes that of the other, and vice versa. might, therefore, with equal propriety, it should seem, affirm that wages determine profits, or that profits determine wages, and in framing our language, assume whichever we pleased as the regulator or standard. As we have seen,

We

however, that the regulation of the shares between the capitalist and the labourer depends upon the relative abundance of population and capital, and that population, as compared with capital, has a tendency to superabound, the active principle of change is on the side of population, and constitutes a reason for considering the regulator." population, and consequently wages, as

And to this reasoning it is scarcely possible, one would imagine, for any one to object, who admits-1st. That the produce of labour, after the deduction of rent, is the property of, and is divided between two parties, the capitalist and the labourer; 2d. That population has a tendency to increase faster than capital, or the fund for the maintenance of labour. To the first proposition Mr. Longfield assuredly assents, for the fact is repeatedly asserted in his work. The second he has not denied; and, at any rate, he does not appear to rest his opposition to the principle, on the ground of his dissent from it. He, however, finds himself unable to acquiesce in it, and has endeavoured to show, that the only order in which a correct analysis of the sources of revenue can be carried on is, 1st, rent-2d, profits-3d, wages; and following up this announcement, the principle he proceeds to lay down respecting the two last mentioned sources, is as follows:-"That the rate of profits is regulated by the profits on hat portion of capital

which is obliged to be employed with. the least efficiency in assisting labour;" and that "the wages of labour depend upon the rate of profit, and the productiveness of labour employed in the fabrication of those commodities in which the wages of labour are paid ;" thus making wages consequent to, and dependent upon, profits the means of production upon the thing produced! Hereafter it may be maintained that the seed depends upon the crop; but it will require a very powerful train of argument to convince mankind of the falsehood of the notion that the crop depends upon the seed.

The proof which Mr. Longfield gives of his theory of profits, is as follows:

"Capital is useful by advancing to the workman the value of his labour, before the produce of his labour is sold to the consumer. It also assists the labourer materially, by supplying him with instruments, tools, and machinery. These, which I may call by one general name, machines, are of various degrees of efficiency. By their help the labourer can execute more work than he could possibly do without their assistance. Some make his labour twice, some four times, and some ten times as efficient. It is, however, evident that the owner of a machine which gives assistance in this manner to the labourer, will be paid for the use of it in proportion to its value, and the injury it receives from use, and the time during which it is lent, and not in proportion to its effect in increasing the efficiency of labour. This is an immediate consequence of the principle of competition, which produces an equality between all the advantages and disadvantages of the different modes of employing capital. If the owner of one machine could obtain more for its use than the owner of another, of equal value and durability, people would purchase; and artificers would then make the former rather than the latter, until the profits of each were reduced to their level. This level must be determined by the less efficient machine; since the sum paid for its use can never exceed the value of the assistance it gives the labourer. Thus, if with the aid of any instrument a labourer could execute exactly twice the quantity of work which he could perform without its assistance, then its use cannot be worth more than half the value of the work which the labourer performs with its assistance, that is equal to the wages

of the labourer during the same time. If more were demanded, the labourer would find it more advantageous to forego its assistance, and the employer would have the same quantity of work performed by two labourers unassisted, than by one with the machine. Thus the sum which can be paid for the use of any machine, has its greatest limit determined by its efficiency in assisting the operations of the labourer; while its lesser limit is determined by the efficiency of that capital which, without imprudence, is employed in the least efficient manner; and these principles are not altered, whether the use of the machine is paid for, in the first instance, by the labourer or his employer, or whether they make or purchase the machine, and reimburse themselves by its profits for the labour or expense it costs them. The profits of capital in every industrial undertaking must find their level; and the height of that level must be determined by the profits of that capital which is naturally the least efficiently employed." pp. 187–188.

This reasoning, though powerful, is fallacious in the assumption that the capitalist lends the labourer, on hire, a machine; he engaging to divide the commodities produced by the joint operation of the machine and his own labour, in some stipulated proportion with the capitalist; whereas, in fact, first-the capitalist does not lend his machine to the labourer; and, second-there is no division of the produce, either by the labourer giving the capitalist a part, or by the capitalist giving the labourer a part. The capitalist, in reality, keeps the machine in his own possession, merely setting the labourer to work at it, and the produce of the joint operation of the labourer and the machine is wholly and entirely the property of the capitalist, with which the labourer has nothing to do, and in which he has no interest, except in so far as it forms a fund, which the capitalist may, if he pleases, employ at some future time in the purchase of an additional quantity of his labour. It will be observed that Mr. Longfield, at the commencement of the passage above quoted, refers to two operations of capital. First-Its advancing to the labourer the value of his work before the sale of the produce, (it should be before the completion of the produce,) and, second-its assistance to the pro

ductive powers of labour, in providing tools and machinery. In the remainder of the argument he, however, appears to leave out of his consideration, in toto, the only one of these two operations of capital from which the labourer derives any direct advantage, viz., the advance of the value of the work before the completion of the produce; for a careful consideration of the subject will show, that the labourer has nothing whatever to do with, and has no immediate interest in the increased efficiency of his labour, resulting from the use of a machine, the property of the capitalist. It is the first function of capital to which, in considering the wages of labour, our attention should be confined. The capitalist advances to the labourer his subsistence, before the production of the commodities on which his labour is employed. He advances that subsistence out of a fund which is, up to the moment of the completion of his bargain with the labourer, his own. If he did not possess such a fund, the possession of a machine would be useless to him; for he could not, with a machine, support his labourers in the interval between the commencement and completion of the work. It is, therefore, to this fund, which the capitalist possesses over and above his machinery, that the labourer must look for the wages of his labour; and it is on the amount of this fund that the amount of his wages must depend. If the fund be small his wages cannot be large, be the efficiency of the machinery what it may. If the fund be given, and the number of labourers also given, the average wages of each labourer are determined. The whole fund must be divided by the capitalist amongst the whole of the labourers, in shares proportioned to the efficiency or skill of the respective individuals. One may get more than another, but all together cannot get more than the whole amount of the fund, made applicable by the capitalist to the payment of wages or the purchase of labour-the share of each will be such a proportion of the whole fund, as the labour of the particular individuals is of the gross amount of the labour of all.

It must, therefore, appear evident, that wages depend on the amount of the fund for the purchase of labour,

compared with the number of shares into which that fund must be divided; or, in other words, with the number of labourers. The labourers having received the wages agreed upon, and performed the work assigned them by, and under the direction of, the capitalists, have nothing whatever to do with the produce of their labour or any part of it; that is exclusively the property of the capitalists, to be dealt with as they think fit; the labourers have no right to inquire whether it be large or small, and, in effect, do not inquire, and do not know. The capitalist proceeds to appropriate the produce, the property in which he has thus acquired, according to his own wishes and desires, and exclusively for his own benefit. He may reserve, for his own consumption, such a quantity as will leave either a greater, an equal, or a lesser fund for the purchase of more labour, for a new series of productive operations, and according as he does so, (supposing the number of labourers to remain unchanged,) will their condition be improved, remain stationary, or be deteriorated. It is true there are feelings and motives which act upon the capitalist, and which afford the means of determining beforehand which of these courses he will be most likely to pursue ; but it is equally true that the labourer has no direct control over his conduct in this particular, and that it is not to gratify the labourer, but himself, that the capitalist acts. If this view of the operations of capitalists and labourers be correct, then it is evident that wages are determined by, and depend upon, circumstances, anterior, in point of time, to profits-that they are paid and settled long before the production of the commodities, the possession of which is to remunerate the capitalist for his advances, and that their amount has no necessary reference to the amount of the produce, the excess of which, above the outlay, constitutes the profit, and which produce is wholly the property of the capitalist. The amount of this produce must depend on the natural and acquired energies and powers of the labourers-on the skill and intelligence of the capitalist, in the direction of those powers and energies-and the efficiency of the agents for assisting labour; or, in other words, on the productive powers of labour.

"Menial servants," says Mr. Longfield, "and those labourers usually termed unproductive, must be maintained by funds derived from other sources; but the wages of the great mass of labourers must be paid out of the produce, or the price of the produce of their labour."

It is on this assumption, the fallacy of which the preceding observations have been intended to display, that the many erroneous notions entertained on the mutual dependency of wages and profits have been founded. Mr. Ricardo, reasoning on this assumption, has endeavoured to show that a rise of profits can only be the result of a fall of proportional wages, and a fall of profits only the result of a rise of proportional wages, thereby making wages the regulator of profits. Mr. M'Culloch, agreeing with Mr. Ricardo as to the regulating quality of wages, however, says

"That this theory is universally true only in the event of our attaching a different sense to the term profits from what is usually attached to it, and supposing it to mean the real value of the entire portion of the produce of industry, falling, in the first instance, to the share of the capitalist, without reference to the proportion which the magnitude of this produce bears to the magnitude of the capital employed in its production: and if we consider profits in the light in which they are invariably considered in the real business of life, as the portion of the produce of industry accruing to the capitalists in a given period of time, after all the produce expended by them in production during the same period is fully replaced, it will be immediately seen that

there are very many exceptions to Mr. Ricardo's theory."

And then goes on to show that

"The rate of profits may be increased in three, but only one or other of three ways, viz.-first, by a fall of wages; second, by a fall of taxes; or third, by an increased productiveness of industry."

Mr. Longfield (page 175) quotes one of his arguments on this subject, and points out a mistake into which he has fallen, but at the same time falls into one himself of equal importance. Mr. M'Culloch, just happening to be right, unknown to himself, on the very point on which Mr. Longfield attacks him as being wrong.*

the rate of profits, after this increase of "Mr. McCulloch," says he, "calculates productiveness of labour, as if the advances of the capitalist remained exactly as before; the profit is £543, and he supposes the advance to remain £1,000, whereas, on his supposition, the advance made by the capitalist is £500 for seed and £500 for the old wages, and £857 for the additional wages; in all, £1,857, and the rate of profits is only 30 per cent. instead of 54."

Now, it would be well if Mr. Longfield or Mr. M'Culloch, on the supposition made, would explain the payment of £857 additional wages. Where did this fund come from, and when was it paid? If it arose from the increased productiveness of labour, it was the property of the capitalist, not of the labourer; for it had no existence until after the conclusion of the productive operation; and the whole of it would