142 ADAM SMITH. 



tural produce, with the rent of the landowner also ; * the 

 other, the price as regulated by the proportion between 

 the supply and the demand in the market, where it is 

 exposed for sale or for barter, and which price may be 

 either equal to, or greater, or less than the natural price. 



The portion of these chapters which relates to rent is 

 now admitted to be founded upon an erroneous view of 

 that subject. Rent can never, properly speaking, form 

 any part of price. It has been shown, first by Dr. 

 Anderson in 1776, afterwards by Sir E. West and 

 Mr. Malthus in 1812 and 14, ignorant of Dr. Ander- 

 son's discovery, that rent arises from the bringing of 

 inferior lands into cultivation, which makes it the far- 

 mer's interest to pay a consideration for the use of the 

 better land first cultivated ; so that, instead of the rent 

 affecting the price of corn, the price of corn affects the 

 rent; and that land is let at a rent because corn cannot 

 be grown any longer at the same price, and not that corn 

 is sold at the higher price because land yields a rent. 

 The price of corn again is always regulated by the appli- 

 cation of capital to inferior soils. It never can materially 

 rise above or fall materially below the expense required 

 for raising and bringing to market the corn produced 

 on the worst soils actually cultivated. This is perhaps 

 the most considerable step that has been made in political 

 economy since the ' Wealth of Nations' was published. 



iii. The profits of stock are the subject of the third 



* It is proper to observe, that the peculiarity of rent was not 

 wholly passed over by Dr. Smith. He expressly says, that while 

 high or low wages and profits are the cause of high or low prices, 

 high or low prices are the causes and not the effects of high or low 

 rents. (Book I., chap, xi., Introduction.) 



