Collective Interests

Smithian alchemy had promised that economic growth would transform selfish lead into universal benefits. Ricardian chemistry suggested that the transformation might not last. The first sentence of the preface of his Principles of Political Economy called attention to distributional conflict: ‘‘The produce of the earth—all that is derived from its surface by the united application of labour, machinery, and capital, is divided among the three classes of the community, namely the proprietor of the land, the owner of the stock, or capital needed for its cultivation, and the laborers by whose industry is it to be cultivated.”¹⁹ He seemed to think that laborers themselves were a kind of natural crop, raised from the metaphorical seed corn in their wage bundle.

His story was simple and compelling. Landlords owned land, a fixed factor of production. Capitalist farmers paid rent for the use of the land, and the force of market competition tended to equalize their rate of profit. With population growth, the growing demand for food would lead to the expan­sion of agricultural production, leading to diminishing returns. Farmers would be forced to expand beyond the most easily cultivated areas to rocky hills and marshes where product per acre would be less. The price of food, and with it, the cost of subsistence wages would increase. Capitalist profits would thereby be lowered, but landlords would be able to charge much higher rents on productive land and grow rich at capitalist expense.

Ricardo has been described as the best economic spokesman of an emer­ging capitalist class that prided itself more on its skill than its genealogy. The description fit some aspects of his personal history. His parents were Seph­ardic Jews; he broke with his father at an early age; he made his fortune as a stockbroker, bought a landed estate and retired in his forties to devote himself to political economy.

His good friend Malthus disagreed. A class that devoted itself to luxurious expenditures, he pointed out, helped maintain demand for manufactured goods.²¹ His Principles of Political Economy Considered with a View to Their Practical Application, published in 1820, warned that gluts and depression could result if luxury spending dropped too low. He went on to assert that what was good for the landlords was good for Britain as a whole: ‘‘It may be safely asserted that the interest of no other class in the state is so nearly and necessarily connected with its wealth, prosperity, and power as the interest of the landowner.''²²

The spotlight was now shining on a group rather unaccustomed to its glare. The Chartists hoping to expand the franchise used Ricardian reason­ing to argue that landlord control over Parliament threatened the economic future of the country. Concepts like class and surplus raised uncomfortable questions. Why couldn't the working class claim a larger share? The French economist Simonde de Sismondi observed, in response to Malthus, that capitalists who were afraid of gluts could solve the problem by paying their employees more. Few landlords or factory owners liked that suggestion.