RENT, in Political Economy, is defined by Mr. Ricardo to be " that portion of the produce of the earth which is paid to the landlord for the use of the indestructible powers of the soil. It is often, however (he remarks), confounded with the interest and profit of capital,• and in popular language the term is applied to whatever is annually paid by a farmer to his landlord." Mr. Malthus (` Prin. of PoL Econ.') de fines rent to be "that portion of the value of the whole produce which remains to the owner of the land, after all the outgoings belonging to its cultivation, of whatever kind, have been paid, including the profits of the capital employed, estimated according to the usual and ordinary rate of the profits of agricultural capital at the time being." As most modern economists have adopted the main principles of the Ricardo theory, we here give an outline of it, in the words of Mr. Iticardo :—" If all land had the same properties, if it were boundless in quantity and uniform in quality, no charge could be made for its use, unless where it possessed peculiar advantages of situation. It is then because land is of qualities with respect to its productive powers, and because, in the progress of population, laud of an inferior quality, or less advantageously situated, is called into cultivation, that rent is ever paid for the use of it. When, in the progress of society, land of the second degree of fertility is taken into cultivation, rent immediately commences on that of the first quality, and the amount of that rent will depend on tine difference in the quality of these two portions of land. . . . With every step in the progress of popula tion which shall oblige a country to have recourse to land of a worse quality to enable it to raise its supply of food, rent on all the more fertile land will rise. . . . If good land existed in a quantity much more abundant than the production of food for an increasing popula tion required, or if capital could be indefinitely employed without a diminished return on the old land, there could be no rise of rent ; for rent invariably proceeds from the employment of an additional quan tity of labour with a proportionally less return." Rent, according to the definition which has been given, consists of a surplus which remains after the capital expended in production has been replaced with ordinary profits. This surplus, which conetitttes rent, arises, as Mr. Ricardo asserts, from, and is in proportion to, the necessity for resorting to inferior soils or employing capital on the old soil with small returns. To use tho words of Mr. Mill, his friend and disciple—" Rent is the difference between the return made to the more productive portions and that which is made to the least pro ductive portion of capital employed upon the land." In a country containing, as every country does contain, land of various degrees of fertility, rent therefore will not be paid until the demands of an increasing population have rendered it necessary to have recourse to , the inferior soils. "Thus (continues Ricardo), suppose land, Nos. 1
2, 3, to yield, with an equal employment of capital and labour, a ne produce of 100, 00, and SO quarters of corn. In a new country where there Is an Abundance of fertile land compared with th and where therefore it is only neceinry to cultivat No. 1, the whole net produce will belong to the cultivator, ant will be the profits of the stock aid& he advances. As soon as pope latices had ea far increased as to make it necessary to cultivate No. 2 from which PO quarters only can be obtained after supporting de labourers', rent would comutime on No. 1 ; for either there must is two rates of profit on agriculture, or ten quarters or the value of ter spuutere must be withdrawn from the produce of No. 1 for seine other purpose. Whether the proprietor of the land or any other persor cultivated No. I, these ten quarters would equally constitute rent for the cultivator of No. 2 would get the name result with his capital whether lie cultivated No.1, paying ten quarters for rent, or continues to cultivate No. 2, paying no rent. In the same manner it might is shown, that alien No. 3 is brought into cultivation, the rent of No. mot be ten quarters, or the value of ten quarters, whilst the rent o No. would rise to twenty quarters. . . It often and indeed coo needy heppeux that before Nos. 2 and 3, or the inferior lands, ars cultivated, capital can be employed more productively on those lamb which are already in cultivation. . . In such case, capital will be preferably employed on the old land, and will equally create a rent ; far rent is always the difference between the produce obtained by the employment of two tiled quantities of capital and labour. If with a capital of 1000/. a tenant obtain 100 quarters of wheat from his land, and by the employment of a second capital of 1000/. he obtain a further return of 85, his landlord would have the power, at the expiration of his lease, of obliging him to pay 15 quarters, or an equivalent value for additional rent; for there cannot be two rates of profit. If he is 'satisfied with a diminution of 15 quarters in the return for his second 1000/., it is because no employment more profitable can be found for it. . . In this case, as well as in the other, the capital last employed pays no rent. For the greater productive powers of the first 10001., 15 quarters is paid for rent ; for the employment of the second 10001. no rent whatever is paid. If a third 10001. be employed on the same landa with a return of 75 quarters, rent will then be paid for the second 1000/., and will be equal to the difference between the produce of thaw two, or 10 quarters; and at the same time the rent of the first 1000/. will rise from 15 to 25 quarters, whilst the last 10001. will pay no rent whatever." (Itiatrdo'a Prin. of Pol. Econ.,' 3rd edit.) Pevhaps however the clearest definition of this theory of rent is that given by Mr. Mill, in his • Elements of Pol. Econ.,' to the last edition of which work we refer for a more complete examination of the subject.