Proofed and corrected from the scanned original edition.
Summary of Principles Illustrated in This Volume.
As exchangeable value is ultimately determined by the cost of production, and as there is an incessant tendency to an increase in the cost of producing food, (inferior soils being taken into cultivation as population increases,) there is a perpetual tendency in the exchangeable value of food to rise, however this tendency may be temporarily checked by accidents of seasons, and by improvements in agricultural arts.
As wages rise (without advantage to the labourer) in consequence of a rise in the value of food, capitalists must either sell their productions dearer than is necessary where food is cheaper, or submit to a diminution of their profits.
Under the first alternative, the capitalist is incapacitated for competition with the capitalist of countries where food is cheaper: under the second, the capital of the country tends, through perpetual diminution, to extinction.
Such is the case of a thickly-peopled country depending for food wholly on its own resources.
There are many countries in the world where these tendencies have not yet shown themselves; where there is so much ferthe land, that the cost of producing food does not yet increase; and where corn superabounds, or would do so, if there was inducement to grow it.
Such inducement exists in the liberty to exchange the corn with which a thinly-peopled country may abound, for the productions in which it is deficient, and with which a populous country may abound. While, by this exchange, the first country obtains more corn in return for its other productions, and the second more of other productions in return for its corn, than could be extracted at home, both are benefited. The capital of the thickly-peopled country will perpetually grow; the thinly-peopled country will become populous; and the only necessary limit of the prosperity of and all the will be the limit to the fertility of the world.
But the waste of capital caused by raising corn dear and in limited quantity at home, when it might be purchased cheap and in unlimited quantity abroad, is not the only evil attending a restriction of any country to its own resources of food; a further waste of capital and infliction of hardship are occasioned by other consequences of such restriction.
As the demand for bread varies little within any one season, or few seasons, while the supply is perpetually varying, the exchangeable value of corn fluctuates more than that of any article whose return to the cost of production is more calculable.
Its necessity to existence causes a panic to arise on the smallest deficiency of supply, enhancing its price in undue proportion; and as the demand cannot materially increase on the immediate occasion of a surplus, and as corn is a perishable article, the price falls in an undue proportion.
These excessive fluctuations, alternately wasting the resources of the consumers and the producers of corn. are avoided where there is liberty to the one class to buy abroad in deficient seasons, and to the other to sell abroad ill times of superabundance.
It is not enough that such purchase and sale are permitted by special legislation when occasion arises, as there can be no certainty of obtaining a sufficient supply, on reasonable terms, in answer to a capricious and urgent demand.
Permanently importing countries are thus more regularly and cheaply supplied than those which occasionally import and occasionally export; but these last are, if their corn exchanges be left free, immeasurably more prosperous than one which is placed at the mercy of man and circumstance by a system of alternate restriction and freedom.
By a regular importation of corn, the proper check is provided against capital being wasted on inferior soils; and this capital is directed towards manufactures, which bring in a larger return of food from abroad than could have been yielded by those inferior soils. Labour is at the same time directed into the most profitable channels. Any degree of restriction on this natural direction of labour and capital is ultimately injurious to every class of the community,—to land owners, farming and manufacturing capitalists, and labourers.
Labourers suffer by whatever makes the prime necessary of life dear and uncertain in its supply, and by whatever impairs the resources of their employers.
Manufacturing capitalists suffer by whatever tends needlessly to cheek the reciprocal growth of capital and population, to raise wages, and disable them for competition abroad.
Farming capitalists suffer by whatever exposes their fortunes to unnecessary vicissitude, and tempts them to an application of capital which can be rendered profitable only by the maintenance of a system which injures...