§ 2. First two cases, Population and Capital increasing, the arts of production stationary.

For the sake of clearness we will form two general groups of these causes:

A. The Influence of Population and Capital (Improvements remaining stationary).

B. The Influence of Improvements (Population and Capital remaining stationary).

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We will first take up A, and under this division make for convenience two separate suppositions:

I. The first is that, while Population is advancing, Capital is stationary. By this means we can study separately the operation of one of the factors of societary progress, Population, and see its influence on rents, profits, and wages. There being only the same given quantity of wealth in the form of capital to be now distributed among more laborers (1), real wages must fall; whereupon, if the same capital purchases more labor, and obtains more produce (2), profits rise. Now, if the laborers were so well off before as to suffer the reduction of wages to take place not in their food, but in their other comforts, then, if each laborer uses as much food as before, and if, as by the supposition, there are more laborers, an increased quantity of food will be required from the soil. This supply can be produced only at a greater cost, and, as inferior soils are called into cultivation (3), rents will rise. This last action (3), however, will have an influence on the rise of profits (2). For it was only by a reduction of real wages that profits rose; but if the cost of food, that is, the real wages, have since risen, then one of the elements entering into cost of labor has risen, and in so far will offset the fall of real wages; so that profits will not gain so much as if rents had not risen. The result of this first supposition, then, is, that the landlord is the chief gainer:

I. (1.) Wages fall.
(2.) Profits rise (less if rents rise).
(3.) Rents rise.

II. We will now take up the second supposition under A, that while Capital is advancing Population remains stationary. Then, of course (1), wages will rise; and, as there is no improvement to cheapen the cost of their real wages, there will be an increase in cost of labor to the capitalist, and (2) profits will fall. If, now, the laborers, being better off, demand more food, the new food would cost more, as the margin of cultivation was pushed down, and (3) rents would inevitably rise. But not only have the laborers received more real wages, but since that change the cost, as just described, of these real wages has increased. Therefore (2), profits would fall still more than by the rise of real wages. In this supposition, consequently, while the laborer gains, so does the landlord:

II. (1.) Wages rise.
(2.) Profits fall (more if rents rise).
(3.) Rents rise.

A. It is easy for us now to take into our view the total effects under A, and see what the combined action of I and [pg 491] II would be. That is, if both Capital and Population (improvements remaining stationary) increase, what will be the effect on Wages, Profits, and Rent? Of course, we must suppose that Capital and Population just keep pace with each other; and in that case (1) real wages remain the same, each laborer receiving the same quantity and same quality of commodities as before. Hence, if each laborer receives the same quantity as before, and there are many more laborers, there will be an increased demand put upon the soil for food, poorer soils will be cultivated, and the cost of the products will rise. So (3) rents rise. But if each laborer receives the same quantity of real wages as before, and the cost of them has risen, as just explained, an increased cost of labor will result which must come out of profits. (2) Profits will fall. So that the results of A upon distribution, taken separately from B, are that the owner of capital loses; but the owner of land again gains.

A. (1.) Wages the same.
(2.) Profits fall.
(3.) Rents rise.