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Show 310 OF 'fHE l>HO:FITS ·o :F CAPITAL. [cH. v .. but from o-reat expenditure and the want of 0 . saving habits, it is certa1n that labour, after a time, '\Vould be paid very low, and profits would be very high. , . . . . . If in another country w1th SI111Ilar land In cui .. tivati' on, such a spirit of saving· shoul d prevai.l as to occasion the accu1nulation of capital to be more rapid than the progress of population, it is as certain that profits \vould be very lovv. So understood therefore, the proposition cannot for a n101nent be n1aintained. If, on the other hand, by necessaries be meant the actual earnings of the labourer, w atever they 1nay be, the proposition is essentially incomplete. Even allowing that the exchangeable value of co''t11111oclities is regulated by the quantity of labour that has been employed in their production, (which it has been shewn is not so,) little is done towards determining the rate of profits. It is merely a truisn1 to say that if the value of commodities be divided between labour and profits, the greater is the share taken by one, the less vvill be left for the other; or in other words, that profits fall as labour rises, or rise as labour falls. We can know little of the laws which determine profits, unless, in addition to the causes which increase the price of necessaries, we explain the causes "vhich award a larger or a s1naller share of these necessaries to each labourer. And here it is obvious that we must have recourse to the great principles of dernand and supply, or to that very principl~ of competition brought for- S .E C. II. J 0 F T tl.E P ItO FIT$ 0 F CAP 1 TAL. 3] 1 ,vanl by Aclan1 Sn1ith, which 1\llr. Ricardo e .. ,.pressly rejects, or at least considers as of so temporary a nature as not to require attention in q general theory of profits.* And yet in fact there is no other cause of pernlanently high profits than a deficiency in the supply of capital; and under such a deficiency, occasioned by extravagant expenditure, the profits of a particular country 1night for hundreds of years together continue very high, compared wjtb others, O\Ving solei y to the different' proportions of capital to labour. In Poland, and son1e other parts of Europe, profits are said to be higher than in Atnerica; yet it is probable that the last land taken into cultivation in Anierica is richer than the last land taken into cultivation in Poland. But in An1erica the labourer earns perhaps the value of sixteen or eighteen q uar- . ters of \vheat in the year; in Poland only the value of eight or nine quarters of rye. 1,his difference in the division of the same or nearly the sari1e produce, n1ust tnake an extraordinary difference in the ra~e of profits; yet the causes which determine this division can hardly 'be said to form any part of Mr. Ricardo's theory of profits, although, far from being of so temporary a nature that they n1ay be safely overlooked, they n1ight contribute to operate rnost po\verfullyfor ahnostany length of time. Such is the extent of 1\n1erica, that the price of its labour rnay not essentially fall for hundreds of years; and * J>riftc. of Polit. Econ. chap. vi. p. 132. and ch. xxi. Zd €dit. -· L1 |
