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Show oF TilE PROFITS OF CAPITAL. ' [c 1rr. v. ·. ,vill be attended with great reductions in the rate of profits, and a rapid ~·ise in rent; and_ on the ~ol:trary, a s1nall but ~ertile co~1ntry, particular!~ If 1t freely permits the Importation of food, tnay accun1ulate a large stock of capital, without any great diminution in the rate of profits, or any great in-crease I. n t h e ren t o f 1a n d . '':)(t Adverting to the known effects of · permanent improve1nents on the land, I should have drawn an inference fron1 these two cases precise] y the reverse of that which 1\!Ir. Ricardo has dra,vn. A very extensive territory, with the soil of a poor quality, yet all, or nearly all capable of cultivation, n1jght, by continued i1nprovements in agriculture, adn1it of the employment of a vast 1nass of capital for hundreds of years, 'vith little or 'vith no fall of profits; \vhile the sn1all but fertile territory, being very soon filled \Vith all the capital it could Ginploy on the land, would be obliged to en1ploy its further accumulations in the purchase of corn with falling n1anufactures; a state of things which 1night easily reduce profits to their lo\vest rate before one-third of the capital had been accun1 ulated that had been accutnulated in the fonner case. A country, 'vhich accun1ulates f~tstcr than its • neighbours, n1ight for hundreds of years still keep up its rate of profits, if it \Vere successful in making pern1anent in1provetnents on the land; but, if with the same rapidity of accutnulation it \\7ere to de: pend chiefly on in1ported corn, its profits could ( * Prine. of Pol. Econ. ch. vi. p. 133. 2d edit. SEC. IV. J OF' THE PROFITS OF CAPITAL. 3!33 scarcely fail to fall; and the fall woul.d pro~Jably be occasioned, not by a rise in the bulhon pr1ce of corn in the ports of Europe, but by a fall in the bullion price of the exports ~ith whi~h the corn was purchased by the country 111 question. . These staten1_ents appear to me to accord wtt1I the most correct theory of profits, and they certainly seen1 to be confirmed by experience. I have already adverted to the unquestionable f(!.ct of the profits on land being higher in 1813 tha~ they were above eighty years before, although In the interval millions and millions of accumulated capital had been cn1ployecl on the soil. And the effect of falling prices · in reducing profits is but too evident at the present moment. In the largest article of our exports, the wages of labour are no\v lower than they probably 'vould be in an ordinary state of thin <YS 'if corn were at fifty shillings a quarter. b l . If, according to the ne\v theory of profits, t 1e pnccs of our exports had remained the satne, the n1aster manufacturers would have been in a state of the most extraordinary prosperity, and the rapid accumulation of their capitals 'vould soon have en1- ployed all the 'vorktnen that could have been found. But, instead of this, ,ve hear of glutted tnarkets, falling prices, and cotton goods selling at l(anlschatka lovver than the costs of production. It may be said, perhaps, that the cotton trade happens to be glutted; and it is a tenet of the ne\v doctrine on profits and den1and, that if one trade be overstocked with cap~tal, it is a certain sign that some other trade is understockcd. I)ut where, |