The Political Economist and the Land. 125 



ing his costs of production and the usual rate of profit, must 

 hand over to the landlord as rent. 



But Smith, at any rate in theory, had admitted that there 

 might be " parts of the produce of land " which would not 

 afford a greater price than what is sufficient to bring them to 

 market. From which possibility he argued that rent enters 

 into the composition of the price of commodities in a different 

 way from wages and profit. " High or low wages and profits 

 are the causes of high or low prices ; high or low rent is the 

 effect of it." Sufficiently correct while he keeps in view, how- 

 ever indistinctly, the possibility of a margin of cultivation, he 

 is liable to err as soon as he neglects this factor in his theory 

 of rents. He elsewhere argues as though he supposed that 

 rents affect prices, and refuses to be influenced by his friend 

 Hume, who thus expostulates with him : " I cannot think 

 that the rent of farms makes any part of the produce, but 

 that the price is determined altogether by the quantity and 

 the demand." 



It has been contended that, had Smith held the Andersonian 

 theory of rents, he would have altered the wording of his own 

 work in one or other of its later editions. From his having 

 allowed Hume's remark to go unchallenged, we can but 

 conclude that he believed prices to be affected by rents. We 

 must then bear in mind that arguing from the premisses on 

 which Smith based his theory of rents, his conclusion was 

 wrong ; that arguing from those on which Anderson and 

 Ricardo based their theory, it was equally wrong ; but that 

 arguing from what many in these later times conceive to 

 be the true premisses, his conclusion was right. We shall see 

 this the more clearly if we follow patiently the path of history 

 until it brings us out at the end of this discussion. 



The next economist who approached the subject of rent was 

 Anderson, who in 1777 assumed the part of peacemaker in a 

 violent controversy then raging in Scotland between the 

 commercial and landed interests. The famous footnotes to 

 his pamphlet contain a new doctrine, though what is now 

 known in its entirety as the Ricardian Theory of Rents seems 

 to have been evolved from the works of three authors ; viz., 



