2。Ataxonanyonecommodity,whetherlaidonits
  production,itsimportation,itscarriagefromplacetoplace,or
  itssale,andwhetherthetaxbeafixedsumofmoneyforagiven
  quantityofthecommodity,oranadvaloremduty,will,asa
  generalrule,raisethevalueandpriceofthecommoditybyat
  leasttheamountofthetax。Therearefewcasesinwhichitdoes
  notraisethembymorethanthatamount。Inthefirstplace,
  therearefewtaxesonproductiononaccountofwhichitisnot
  foundordeemednecessarytoimposerestrictiveregulationson
  themanufacturersordealers,inordertocheckevasionsofthe
  tax。Theseregulationsarealwayssourcesoftroubleand
  annoyance,andgenerallyofexpense,forallofwhich,being
  peculiardisadvantages,theproducersordealersmusthave
  compensationinthepriceoftheircommodity。Theserestrictions
  alsofrequentlyinterferewiththeprocessesofmanufacture,
  requiringtheproducertocarryonhisoperationsinthewaymost
  convenienttotherevenue,thoughnotthecheapest,ormost
  efficientforpurposesofproduction。Anyregulationswhatever,
  enforcedbylaw,makeitdifficultfortheproducertoadoptnew
  andimprovedprocesses。Further,thenecessityofadvancingthe
  taxobligesproducersanddealerstocarryontheirbusinesswith
  largercapitalsthanwouldotherwisebenecessary,onthewhole
  ofwhichtheymustreceivetheordinaryrateofprofit,thougha
  partonlyisemployedindefrayingtherealexpensesof
  productionorimportation。Thepriceofthearticlemustbesuch
  astoaffordaprofitonmorethanitsnaturalvalue,insteadof
  aprofitononlyitsnaturalvalue。Apartofthecapitalofthe
  country,inshort,isnotemployedinproduction,butinadvances
  tothestate,repaidinthepriceofgoods;andtheconsumers
  mustgiveanindemnitytothesellers,equaltotheprofitwhich
  theycouldhavemadeonthesamecapitalifreallyemployedin
  production。(1*)Neitheroughtittobeforgotten,thatwhatever
  rendersalargercapitalnecessaryinanytradeorbusiness,
  limitsthecompetitioninthatbusiness;andbygivingsomething
  likeamonopolytoafewdealers,mayenablethemeithertokeep
  upthepricebeyondwhatwouldaffordtheordinaryrateof
  profit,ortoobtaintheordinaryrateofprofitwithaless
  degreeofexertionforimprovingandcheapeningtheircommodity。
  Intheseseveralmodes,taxesoncommoditiesoftencosttothe
  consumer,throughtheincreasedpriceofthearticle,muchmore
  thantheybringintothetreasuryofthestate。Thereisstill
  anotherconsideration。Thehigherpricenecessitatedbythetax,
  almostalwayschecksthedemandforthecommodity;andsince
  therearemanyimprovementsinproductionwhich,tomakethem
  practicable,requireacertainextentofdemand,such
  improvementsareobstructed,andmanyofthemprevented
  altogether。Itisawell。knownfactthatthebranchesof
  productioninwhichfewestimprovementsaremade,arethosewith
  whichtherevenueofficerinterferes;andthatnothing,in
  general,givesagreaterimpulsetoimprovementsinthe
  productionofacommodity,thantakingoffataxwhichnarrowed
  themarketforit。
  3。Sucharetheeffectsoftaxesoncommodities,considered
  generally;。butastherearesomecommodities(thosecomposing
  thenecessariesofthelabourer)ofwhichthevalueshavean
  influenceonthedistributionofwealthamongdifferentclasses
  ofthecommunity,itisrequisitetotracetheeffectsoftaxes
  onthoseparticulararticlessomewhatfarther。Ifataxbelaid,
  sayoncorn,andthepricerisesinproportiontothetax,the
  riseofpricemayoperateintwoways。First:itmaylowerthe
  conditionofthelabouringclasses;temporarilyindeeditcan
  scarcelyfailtodoso。Ifitdiminishestheirconsumptionofthe
  produceoftheearth,ormakesthemresorttoafoodwhichthe
  soilproducesmoreabundantly,andthereforemorecheaply,itto
  thatextentcontributestothrowbackagricultureuponmore
  fertilelandsorlesscostlyprocesses,andtolowerthevalue
  andpriceofcorn;whichthereforeultimatelysettlesataprice,
  increasednotbythewholeamountofthetax,butbyonlyapart
  ofitsamount。Secondly,however,itmayhappenthatthedearness
  ofthetaxedfooddoesnotlowerthehabitualstandardofthe
  labourer’srequirements,butthatwages,onthecontrary,through
  anactiononpopulation,rise,inashorterorlongerperiod,so
  astocompensatethelabourersfortheirportionofthetax;the
  compensationbeingofcourseattheexpenseofprofits。Taxeson
  necessariesmustthushaveoneoftwoeffects。Eithertheylower
  theconditionofthelabouringclasses;ortheyexactfromthe
  ownersofcapital,inadditiontotheamountduetothestateon
  theirownnecessaries,theamountdueonthoseconsumedbythe
  labourers。Inthelastcase,thetaxonnecessaries,likeatax
  onwages,isequivalenttoapeculiartaxonprofits;whichis,
  likeallotherpartialtaxation,unjust,andisspecially
  prejudicialtotheincreaseofthenationalwealth。
  Itremainstospeakoftheeffectonrent。Assuming(whatis
  usuallythefact,)thattheconsumptionoffoodisnot
  diminished,thesamecultivationasbeforewillbenecessaryto
  supplythewantsofthecommunity;themarginofcultivation,to
  useDrChalmers,expression,remainswhereitwas;andthesame
  landorcapitalwhich,astheleastproductive,alreadyregulated
  thevalueandpriceofthewholeproduce,willcontinueto
  regulatethem。Theeffectwhichataxonagriculturalproduce
  willhaveonrent,dependsonitsaffectingornotaffectingthe
  differencebetweenthereturntothisleastproductivelandor
  capital,andthereturnstootherlandsandcapitals。Nowthis
  dependsonthemannerinwhichthetaxisimposed。Ifitisanad
  valoremtax,orwhatisthesamething,afixedproportionofthe
  produce,suchastitheforexample,itevidentlylowers
  corn—rents。Forittakesmorecornfromthebetterlandsthan
  fromtheworse;andexactlyinthedegreeinwhichtheyare
  better;landoftwicetheproductivenesspayingtwiceasmuchto
  thetithe。Whatevertakesmorefromthegreateroftwoquantities
  thanfromtheless,diminishesthedifferencebetweenthem。The
  impositionofatitheoncornwouldtakeatithealsofrom
  corn—rent:forifwereduceaseriesofnumbersbyatentheach,
  thedifferencesbetweenthemarereducedone—tenth。
  Forexample,lettherebefivequalitiesofland,which
  severallyyield,onthesameextentofground,andwiththesame
  expenditure,100,90,80,70,and60bushelsofwheat;thelast
  ofthesebeingthelowestqualitywhichthedemandforfood
  rendersitnecessarytocultivate。Therentoftheselandswill
  beasfollows:
  Thelandproducing100bushelswillyieldarentof100—60or40
  bushels。
  Thatproducing90bushelswillyieldarentof90—60or30
  bushels。
  Thatproducing80bushelswillyieldarentof80—60or20
  bushels。
  Thatproducing70bushelswillyieldarentof70—60or10
  bushels。
  Thatproducing60bushelswillyieldarentofnorent。
  Nowletatithebeimposed,whichtakesfromthesefivepiecesof
  landlO,9,8,7,and6bushelsrespectively,thefifthquality
  stillbeingtheonewhichregulatestheprice,butreturningto
  thefarmer,afterpaymentoftithe,nomorethan54bushels:
  Thelandproducing100bushelsreducedto90willyieldarentof
  90—54or36bushels。
  Thatproducing90bushelsreducedto81willyieldarentof
  81—54or27bushels。
  Thatproducing80bushelsreducedto72willyieldarentof
  72—54or18bushels。
  Thatproducing70bushelsreducedto63willyieldarentof
  63—54or9bushels。
  andthatproducing60bushels,reducedto54,willyield,as
  before,norent。Sothattherentofthefirstqualityofland
  haslostfourbushels;ofthesecond,three;ofthethird,two;
  andofthefourth,one:thatis,eachhaslostexactlyone—tenth。
  Atax,therefore,ofafixedproportionoftheproduce,lowers,
  inthesameproportion,corn—rent。
  Butitisonlycorn—rentthatislowered,andnotrent
  estimatedinmoney,orinanyothercommodity。For,inthesame
  proportionascorn—rentisreducedinquantity,thecorn
  composingitisraisedinvalue。Underthetithe,54bushelswill
  beworthinthemarketwhat60werebefore;andnine—tenthswill
  inallcasessellforasmuchasthewholeten—tenthspreviously
  soldfor。Thelandlordswillthereforebecompensatedinvalue
  andpriceforwhattheyloseinquantity;andwillsufferonlyso
  farastheyconsumetheirrentinkind,orafterreceivingitin
  money,expenditinagriculturalproduce:thatis,theyonly
  sufferasconsumersofagriculturalproduce,andincommonwith
  alltheotherconsumers。Consideredaslandlords,theyhavethe
  sameincomeasbefore;thetithe,therefore,fallsonthe
  consumer,andnotonthelandlord。
  Thesameeffectwouldbeproducedonrent,ifthetax,
  insteadofbeingafixedproportionoftheproduce,wereafixed
  sumperquarterorperbushel。Ataxwhichtakesashillingfor
  everybushel,takesmoreshillingsfromonefieldthanfrom
  another,justinproportionasitproducesmorebushels;and
  operatesexactlyliketithe,expectthattitheisnotonlythe
  sameproportiononalllands,butisalsothesameproportionat
  alltimes,whileafixedsumofmoneyperbushelwillamounttoa
  greateroralessproportion,accordingascornischeapordear。
  Thereareothermodesoftaxingagriculture,whichwould
  affectrentdifferently。Ataxproportionedtotherentwould
  fallwhollyontherent,andwouldnotatallraisethepriceof
  corn,whichisregulatedbytheportionoftheproducethatpays
  norent。Afixedtaxofsomuchpercultivatedacre,without
  distinctionofvalue,wouldhaveeffectsdirectlythereverse。
  Takingnomorefromthebestqualitiesoflandthanfromthe
  worst,itwouldleavethedifferencesthesameasbefore,and
  consequentlythesamecorn—rents,andthelandlordswouldprofit
  tothefullextentoftheriseofprice。Toputthethingin
  anothermanner;thepricemustrisesufficientlytoenablethe
  worstlandtopaythetax;thusenablingalllandswhichproduce
  morethantheworst,topaynotonlythetax,butalsoan
  increasedrenttothelandlords。These,however,arenotsomuch
  taxesontheproduceofland,astaxesonthelanditself。Taxes
  ontheproduce,properlysocalled,whetherfixedoradvalorem,
  donotaffectrent,butfallontheconsumer:profits,however,
  generallybearingeitherthewholeorthegreatestpartofthe
  portionwhichisleviedontheconsumptionofthelabouring
  classes。
  4。Theprecedingis,Iapprehend,acorrectstatementofthe
  mannerinwhichtaxesonagriculturalproduceoperatewhenfirst
  laidon。When,however,theyareofoldstanding,theireffect
  maybedifferent,aswasfirstpointedout,Ibelieve,byMr
  Senior。Itis,aswehaveseen,analmostinfallibleconsequence
  ofanyreductionofprofits,toretardtherateofaccumulation。
  Nowtheeffectofaccumulation,whenattendedbyitsusual
  accompaniment,anincreaseofpopulation,istoincreasethe
  valueandpriceoffood,toraiserent,andtolowerprofits:
  thatis,todopreciselywhatisdonebyataxonagricultural
  produce,exceptthatthisdoesnotraiserent。Thetax,
  therefore,merelyanticipatestheriseofprice,andfallof
  profits,whichwouldhavetakenplaceultimatelythroughthemere
  progressofaccumulation;whileitatthesametimeprevents,or
  atleastretards,thatprogress。Iftherateofprofitwassuch,
  previoustotheimpositionofatithe,thattheeffectofthe
  tithereducesittothepracticalminimum,thetithewillputa
  stoptoallfurtheraccumulation,orcauseittotakeplaceout
  ofthecountry;andtheonlyeffectwhichthetithewillthen
  havehadontheconsumer,istomakehimpayearliertheprice
  whichhewouldhavehadtopaysomewhatlater—partofwhich,
  indeed,inthegradualprogressofwealthandpopulation,he
  wouldhavealmostimmediatelybeguntopay。Afteralapseoftime
  whichwouldhaveadmittedofariseofone—tenththroughthe
  naturalprogressofwealth,theconsumerwillbepayingnomore
  thathewouldhavepaidifthetithehadneverexisted;hewill
  haveceasedtopayanyportionofit,andthepersonwhowill
  reallypayitisthelandlord,whomitdeprivesoftheincrease
  ofrentwhichwouldbythattimehaveaccruedtohim。Atevery
  successivepointinthisintervaloftime,lessoftheburthen
  willrestontheconsumer,andmoreofitonthelandlord:andin
  theultimateresult,theminimumofprofitswillbereachedwith
  asmallercapitalandpopulation,andalowerrental,thanifthe
  courseofthingshadnotbeendisturbedbytheimpositionofthe
  tax。If,ontheotherhand,thetitheorothertaxon
  agriculturalproducedoesnotreduceprofitstotheminimum,but
  tosomethingabovetheminimum,accumulationwillnotbestopped,
  butonlyslackened:andifpopulationalsoincreases,the
  two—foldincreasewillcontinuetoproduceitseffects—arise
  ofthepriceofcorn,andanincreaseofrent。These
  consequences,however,willnottakeplacewiththesamerapidity
  asifthehigherrateofprofithadcontinued。Attheendof
  twentyyearsthecountrywillhaveasmallerpopulationand
  capital,than,butforthetax,itwouldbythattimehavehad;
  thelandlordswillhaveasmallerrent;andthepriceofcorn,
  havingincreasedlessrapidlythanitwouldotherwisehavedone,
  willnotbesomuchasatenthhigherthanwhat,iftherehad
  beennotax,itwouldbythattimehavebecome。Apartofthe
  tax,therefore,willalreadyhaveceasedtofallontheconsumer,
  anddevolveduponthelandlord;andtheproportionwillbecome
  greaterandgreaterbylapseoftime。
  MrSeniorillustratesthisviewofthesubjectbylikening
  theeffectsoftithes,orothertaxesonagriculturalproduceto
  thoseofnaturalsterilityofsoil。Ifthelandofacountry
  withoutaccesstoforeignsupplies,weresuddenlysmittenwitha
  permanentdeteriorationofquality,toanextentwhichwouldmake
  atenthmorelabournecessarytoraisetheexistingproduce,the
  priceofcornwouldundoubtedlyriseone—tenth。Butitcannot
  hencebeinferredthatifthesoilofthecountryhadfromthe
  beginningbeenone—tenthworsethanitis,cornwouldatpresent
  havebeenone—tenthdearerthanwefindit。Itisfarmore
  probable,thatthesmallerreturntolabourandcapital,ever
  sincethefirstsettlementofthecountry,wouldhavecausedin
  eachsuccessivegenerationalessrapidincreasethanhastaken
  place:thatthecountrywouldnowhavecontainedlesscapital,
  andmaintainedasmallerpopulation,sothatnotwithstandingthe
  inferiorityofthesoil,thepriceofcornwouldnothavebeen
  higher,norprofitslower,thanatpresent;rentalonewould
  certainlyhavebeenlower。Wemaysupposetwoislands,which,
  beingalikeinextent,innaturalfertility,andindustrial
  advancement,haveuptoacertaintimebeenequalinpopulation
  andcapital,andhavehadequalrentals,andthesamepriceof
  corn。Letusimagineatitheimposedinoneoftheseislands,but
  notintheother。Therewillbeimmediatelyadifferenceinthe
  priceofcorn,andthereforeprobablyinprofits。Whileprofits
  arenottendingdownwardsineithercountry,thatis,while
  improvementsintheproductionofnecessariesfullykeeppace
  withtheincreaseofpopulation,thisdifferenceofpricesand
  profitsbetweentheislandsmaycontinue。Butif,intheuntithed
  island,capitalincreases,andpopulationalongwithit,more
  thanenoughtocounterbalanceanyimprovementswhichtakeplace,
  thepriceofcornwillgraduallyrise,profitswillfall,and
  rentwillincrease;whileinthetithedislandcapitaland
  populationwilleithernotincrease(beyondwhatisbalancedby
  theimprovements),oriftheydo,willincreaseinalessdegree;
  sothatrentandthepriceofcornwilleithernotriseatall,
  orrisemoreslowly。Rent,therefore,willsoonbehigherinthe
  untithedthaninthetithedisland,andprofitsnotsomuch
  higher,norcornsomuchcheaper,astheywereonthefirst
  impositionofthetithe。Theseeffectswillbeprogressive。At
  theendofeverytenyearstherewillbeagreaterdifference
  betweentherentalsandbetweentheaggregatewealthand
  populationofthetwoislands,andalessdifferenceinprofits
  andinthepriceofcorn。
  Atwhatpointwilltheselastdifferencesentirelycease,and
  thetemporaryeffectoftaxesonagriculturalproduce,inraising
  theprice,haveentirelygivenplacetotheultimateeffect,that
  oflimitingthetotalproduceofthecountry?Thoughtheuntithed
  islandisalwaysvergingtowardsthepointatwhichthepriceof
  foodwouldovertakethatinthetithedisland,itsprogress
  towardsthatpointnaturallyslackensasitdrawsnearerto
  attainingit;since—thedifferencebetweenthetwoislandsin
  therapidityofaccumulationdependinguponthedifferenceinthe
  ratesofprofit—inproportionastheseapproximate,the
  movementwhichdrawsthemclosertogether,abatesofitsforce。
  Theonemaynotactuallyovertaketheother,untilbothislands
  reachtheminimumofprofits:uptothatpoint,thetithedisland
  maycontinuemoreorlessaheadoftheuntithedislandinthe
  priceofcorn:considerablyaheadifitisfarfromtheminimum,
  andisthereforeaccumulatingrapidly。verylittleaheadifitis
  neartheminimum,andaccumulatingslowly。
  Butwhateveristrueofthetithedanduntithedislandsin
  ourhypotheticalcase,istrueofanycountryhavingatithe,
  comparedwiththesamecountryifithadneverhadatithe。
  InEnglandthegreatemigrationofcapital,andthealmost
  periodicaloccurrenceofcommercialcrisesthroughthe
  speculationsoccasionedbythehabituallylowrateofprofit,are
  indicationsthatprofithasattainedthepractical,thoughnot
  theultimateminimum,andthatallthesavingswhichtakeplace
  (beyondwhatimprovements,tendingtothecheapeningof
  necessaries,makeroomfor)areeithersentabroadfor
  investment,orperiodicallysweptaway。Therecantherefore,I
  think,belittledoubtthatifEnglandhadneverhadatithe,or
  anytaxonagriculturalproduce,thepriceofcornwouldhave
  beenbythistimeashigh,andtherateofprofitsaslow,asat
  present。Independentlyofthemorerapidaccumulationwhichwould
  havetakenplaceifprofitshadnotbeenprematurelyloweredby
  theseimposts;themeresavingofapartofthecapitalwhichhas
  beenwastedinunsuccessfulspeculations,andthekeepingathome
  apartofthatwhichhasbeensentabroad,wouldhavebeenquite
  sufficienttoproducetheeffect。Ithink,therefore,withMr
  Senior,thatthetithe,evenbeforeitscommutation,hadceased
  tobeacauseofhighpricesorlowprofits,andhadbecomea
  meredeductionfromrent;itsothereffectsbeing,thatitcaused
  thecountrytohavenogreatercapital,nolargerproduction,and
  nomorenumerouspopulationthanifithadbeenone—tenthless
  fertilethanitis;orletusrathersayone。twentieth
  (consideringhowgreataportionofthelandofGreatBritainwas
  tithe—free)。
  Butthoughtithesandothertaxesonagriculturalproduce,
  whenoflongstanding,eitherdonotraisethepriceoffoodand
  lowerprofitsatall,orifatall,notinproportiontothetax;
  yettheabrogationofsuchtaxes,whentheyexist,doesnotthe
  lessdiminishprice,and,ingeneral,raisetherateofprofit。
  Theabolitionofatithetakesone—tenthfromthecostof
  production,andconsequentlyfromtheprice,ofallagricultural
  produce;andunlessitpermanentlyraisesthelabourer’s
  requirements,itlowersthecostoflabour,andraisesprofits。
  Rent,estimatedinmoneyorincommodities,generallyremainsas
  before;estimatedinagriculturalproduce,itisraised。The
  countryaddsasmuchbytherepealofatithe,tothemargin
  whichintervenesbetweenitandthestationarystate,asiscut
  offfromthatmarginbyatithewhenfirstimposed。Accumulation
  isgreatlyaccelerated;andifpopulationalsoincreases,the
  priceofcornimmediatelybeginstorecoveritself,andrentto
  rise;thusgraduallytransferringthebenefitoftheremission,
  fromtheconsumertothelandlord。
  Theeffectswhichthusresultfromabolishingtithe,result
  equallyfromwhathasbeendonebythearrangementsunderthe
  CommutationActforconvertingitintoarent。charge。Whenthe
  tax,insteadofbeingleviedonthewholeproduceofthesoil,is
  leviedonlyfromtheportionswhichpayrent,anddoesnottouch
  anyfreshextensionofcultivation,thetaxnolongerformsany
  partofthecostofproductionoftheportionoftheproduce
  whichregulatesthepriceofalltherest。Thelandorcapital
  whichpaysnorent,cannowsenditsproducetomarketone—tenth
  cheaper。Thecommutationoftitheoughtthereforetohave
  producedaconsiderablefallintheaveragepriceofcorn。Ifit
  hadnotcomesograduallyintooperation,andifthepriceof
  cornhadnotduringthesameperiodbeenundertheinfluenceof
  severalothercausesofchange,theeffectwouldprobablyhave
  beenmarkedlyconspicuous。Asitis,therecanbenodoubtthat
  thiscircumstancehashaditsshareinthefallwhichhastaken
  placeinthecostofproductionandinthepriceofhome—grown
  produce;thoughtheeffectsofthegreatagricultural
  improvementswhichhavebeensimultaneouslyadvancing,andofthe
  freeadmissionofagriculturalproducefromforeigncountries,
  havemaskedthoseoftheothercause。Thisfallofpricewould
  notinitselfhaveanytendencyinjurioustothelandlord,since
  corn—rentsareincreasedinthesameratioinwhichthepriceof
  cornisdiminished。Butneitherdoesitinanywaytendto
  increasehisincome。Therent—charge,therefore,whichis
  substitutedfortithe,isadeadlosstohimattheexpirationof
  existingleases:andthecommutationoftithewasnotamere
  alterationinthemodeinwhichthelandlordboreanexisting
  burthen,buttheimpositionofanewone;reliefbeingafforded
  totheconsumerattheexpenseofthelandlord,who,however,
  beginsimmediatelytoreceiveprogressiveindemnificationatthe
  consumer’sexpense,bytheimpulsegiventoaccumulationand
  population。
  5。Wehavehithertoinquiredintotheeffectsoftaxeson
  commodities,ontheassumptionthattheyareleviedimpartially
  oneverymodeinwhichthecommoditycanbeproducedorbrought
  tomarket。Anotherclassofconsiderationsisopened,ifwe
  supposethatthisimpartialityisnotmaintained,andthatthe
  taxisimposed,notonthecommodity,butonsomeparticularmode
  ofobtainingit。
  Supposethatacommodityiscapableofbeingmadebytwo
  differentprocesses;asamanufacturedcommoditymaybeproduced
  eitherbyhandorbysteam—power;sugarmaybemadeeitherfrom
  thesugar—caneorfrombeet—root,cattlefattenedeitheronhay
  andgreencrops,oronoil—cakeandtherefuseofbreweries。It
  istheinterestofthecommunity,thatofthetwomethods,
  producersshouldadoptthatwhichproducesthebestarticleat
  thelowestprice。Thisbeingalsotheinterestoftheproducers,
  unlessprotectedagainstcompetition,andshieldedfromthe
  penaltiesofindolence;theprocessmostadvantageoustothe
  communityisthatwhich,ifnotinterferedwithbygovernment,
  theyultimatelyfindittotheiradvantagetoadopt。Suppose
  howeverthatataxislaidononeoftheprocesses,andnotaxat
  all,oroneofsmalleramount,ontheother。Ifthetaxedprocess
  istheonewhichtheproducerswouldnothaveadopted,the
  measureissimplynugatory。Butifthetaxfalls,asitisof
  courseintendedtodo,upontheonewhichtheywouldhave
  adopted,itcreatesanartificialmotiveforpreferringthe
  untaxedprocess,thoughtheinferiorofthetwo。If,therefore,
  ithasanyeffectatall,itcausesthecommoditytobeproduced
  ofworsequality,oratagreaterexpenseoflabour’。itcauses
  somuchofthelabourofthecommunitytobewasted,andthe
  capitalemployedinsupportingandremuneratingthelabourtobe
  expendedasuselessly,asifitwerespentinhiringmentodig
  holesandfillthemupagain。Thiswasteoflabourandcapital
  constitutesanadditiontothecostofproductionofthe
  commodity,whichraisesitsvalueandpriceinacorresponding
  ratio,andthustheownersofthecapitalareindemnified。The
  lossfallsontheconsumers;thoughthecapitalofthecountryis
  alsoeventuallydiminished,bythediminutionoftheirmeansof
  saving,andinsomedegree,oftheirinducementstosave。
  Thekindoftax,therefore,whichcomesunderthegeneral
  denominationofadiscriminatingduty,transgressestherulethat
  taxesshouldtakeaslittleaspossiblefromthetax—payerbeyond
  whattheybringintothetreasuryofthestate。Adiscriminating
  dutymakestheconsumerpaytwodistincttaxes,onlyoneofwhich
  ispaidtothegovernment,andthatfrequentlythelessonerous
  ofthetwo。Ifataxwerelaidonsugarproducedfromthecane,
  leavingthesugarfrombeet—rootuntaxed,theninsofarascane
  sugarcontinuedtobeused,thetaxonitwouldbepaidtothe
  treasury,andmightbeasobjectionableasmostothertaxes;but
  ifcanesugar,havingpreviouslybeencheaperthanbeet—root
  sugar,wasnowdearer,andbeet—rootsugarwastoany
  considerableamountsubstitutedforit,andfieldslaidoutand
  manufactoriesestablishedinconsequence,thegovernmentwould
  gainnorevenuefromthebeet—rootsugar,whiletheconsumersof
  itwouldpayarealtax。Theywouldpayforbeet—rootsugarmore
  thantheyhadpreviouslypaidforcanesugar,andthedifference
  wouldgotoindemnifyproducersforaportionofthelabourof
  thecountryactuallythrownaway,inproducingbythelabourof
  (say)threehundredmen,whatcouldbeobtainedbytheother
  processwiththelabouroftwohundred。
  Oneofthecommonestcasesofdiscriminatingduties,isthat
  ofataxontheimportationofacommoditycapableofbeing
  producedathome,unaccompaniedbyanequivalenttaxonthehome
  production。Acommodityisneverpermanentlyimported,unlessit
  canbeobtainedfromabroadatasmallercostoflabourand
  capitalonthewhole,thanisnecessaryforproducingit。If,
  therefore,byadutyontheimportation,itisrenderedcheaper
  toproducethearticlethantoimportit,anextraquantityof
  labourandcapitalisexpended,withoutanyextraresult。The
  labourisuseless,andthecapitalisspentinpayingpeoplefor
  laboriouslydoingnothing。Allcustomdutieswhichoperateasan
  encouragementtothehomeproductionofthetaxedarticle,are
  thusaneminentlywastefulmodeofraisingarevenue。
  Thischaracterbelongsinapeculiardegreetocustomduties
  ontheproduceofland,unlesscountervailedbyexcisedutieson
  thehomeproduction。Suchtaxesbringlessintothepublic
  treasury,comparedwithwhattheytakefromtheconsumers,than
  anyotherimpoststowhichcivilizednationsareusuallysubject。
  Ifthewheatproducedinacountryistwentymillionsof
  quarters,andtheconsumptiontwenty—onemillions,amillion
  beingannuallyimported,andifonthismillionadutyislaid
  whichraisesthepricetenshillingsperquarter,thepricewhich
  israisedisnotthatofthemilliononly,butofthewhole
  twenty—onemillions。Takingthemostfavourable,butextremely
  improbablesupposition,thattheimportationisnotatall
  checked,northehomeproductionenlarged,thestategainsa
  revenueofonlyhalfamillion,whiletheconsumersaretaxedten
  millionsandahalf;thetenmillionsbeingacontributiontothe
  homegrowers,whoareforcedbycompetitiontoresignitallto
  thelandlords。Theconsumerthuspaystotheownersoflandan
  additionaltax,equaltotwentytimesthatwhichhepaystothe
  state。Letusnowsupposethatthetaxreallychecksimportation。
  Supposeimportationstoppedaltogetherinordinaryyears;it
  beingfoundthatthemillionofquarterscanbeobtained,bya
  moreelaboratecultivation,orbybreakingupinferiorland,ata
  lessadvancethantenshillingsuponthepreviousprice——say,
  forinstance,fiveshillingsaquarter。Therevenuenowobtains
  nothing,exceptfromtheextraordinaryimportswhichmayhappen
  totakeplaceinaseasonofscarcity。Buttheconsumerspay
  everyyearataxoffiveshillingsonthewholetwenty—one
  millionsofquarters,amountingto51/4millionssterling。Of
  thistheodd250,000l。goestocompensatethegrowersofthe
  lastmillionofquartersforthelabourandcapitalwastedunder
  thecompulsionofthelaw。Theremainingfivemillionsgoto
  enrichthelandlordsasbefore。
  SuchistheoperationofwhataretechnicallytermedCorn
  Laws,whenfirstlaidon;andsuchcontinuestobetheir
  operation,solongastheyhaveanyeffectatallinraisingthe
  priceofcorn。ButIambynomeansofopinionthatinthelong
  runtheykeepupeitherpricesorrentsinthedegreewhichthese
  considerationsmightleadustosuppose。Whatwehavesaid
  respectingtheeffectoftithesandothertaxesonagricultural
  produce,appliesinagreatdegreetocornlaws:theyanticipate
  artificiallyariseofpriceandofrent,whichwouldatall
  eventshavetakenplacethroughtheincreaseofpopulationandof
  production。Thedifferencebetweenacountrywithoutcornlaws,
  andacountrywhichhaslonghadcornlaws,isnotsomuchthat
  thelasthasahigherpriceoralargerrental,butthatithas
  thesamepriceandthesamerentalwithasmalleraggregate
  capitalandasmallerpopulation。Theimpositionofcornlaws
  raisesrents,butretardsthatprogressofaccumulationwhich
  wouldinnolongperiodhaveraisedthemfullyasmuch。The
  repealofcornlawstendstolowerrents,butitunchainsaforce
  which,inaprogressivestateofcapitalandpopulation,restores
  andevenincreasestheformeramount。Thereiseveryreasonto
  expectthatunderthevirtuallyfreeimportationofagricultural
  produce,atlastextortedfromtherulingpowersofthiscountry,
  thepriceoffood,ifpopulationgoesonincreasing,will
  graduallybutsteadilyrise;thoughthiseffectmayforatimebe
  postponedbythestrongcurrentwhichinthiscountryhassetin
  (andtheimpulseisextendingitselftoothercountries)towards
  theimprovementofagriculturalscience,anditsincreased
  applicationtopractice。
  Whatwehavesaidofdutiesonimportationgenerally,is
  equallyapplicabletodiscriminatingdutieswhichfavour
  importationfromoneplaceorinoneparticularmanner,in
  contradistinctiontoothers:suchasthepreferencegiventothe
  produceofacolony,orofacountrywithwhichthereisa
  commercialtreaty:orthehigherdutiesformerlyimposedbyour
  navigationlawsongoodsimportedinotherthanBritishshipping。
  Whateverelsemaybeallegedinfavourofsuchdistinctions,
  whenevertheyarenotnugatory,theyareeconomicallywasteful。
  Theyinducearesorttoamorecostlymodeofobtaininga
  commodity,inlieuofonelesscostly,andthuscauseaportion
  ofthelabourwhichthecountryemploysinprovidingitselfwith
  foreigncommodities,tobesacrificedwithoutreturn。
  6。Thereisonemorepointrelatingtotheoperationoftaxes
  oncommoditiesconveyedfromonecountrytoanother,which
  requiresnotice:theinfluencewhichtheyexertoninternational
  exchanges。Everytaxonacommoditytendstoraiseitsprice,and
  consequentlytolessenthedemandforitinthemarketinwhich
  itissold。Alltaxesoninternationaltradetend,therefore,to
  produceadisturbanceandareadjustmentofwhatwehavetermed
  theEquationofInternationalDemand。Thisconsiderationleadsto
  somerathercuriousconsequences,whichhavebeenpointedoutin
  theseparateessayoninternationalCommerce,alreadyseveral
  timesreferredtointhistreatise。
  Taxesonforeigntradeareoftwokinds—taxesonimports,
  andonexports。Onthefirstaspectofthematteritwouldseem
  thatboththesetaxesarepaidbytheconsumersofthecommodity;
  thattaxesonexportsconsequentlyfallentirelyonforeigners,
  taxesonimportswhollyonthehomeconsumer。Thetruestateof
  thecase,however,ismuchmorecomplicated。
  ’Bytaxingexports,wemay,incertaincircumstances,produce
  adivisionoftheadvantageofthetrademorefavourableto
  ourselves。Insomecaseswemaydrawintoourcoffers,atthe
  expenseofforeigners,notonlythewholetax,butmorethanthe
  tax:inothercases,weshouldgainexactlythetax;inothers,
  lessthanthetax。Inthislastcase,apartofthetaxisborne
  byourselves:possiblythewhole,possiblyeven,asweshall
  show,morethanthewhole。’Revertingtothesupposititiouscase
  employedintheEssay,ofatradebetweenGermanyandEnglandin
  broadclothandlinen,’supposethatEnglandtaxesherexportof
  cloth,thetaxnotbeingsupposedhighenoughtoinduceGermany
  toproduceclothforherself。Thepriceatwhichclothcanbe
  soldinGermanyisaugmentedbythetax。Thiswillprobably
  diminishthequantityconsumed。Itmaydiminishitsomuchthat,
  evenattheincreasedprice,therewillnotberequiredsogreat
  amoneyvalueasbefore。Oritmaynotdiminishitatall,orso
  little,thatinconsequenceofthehigherprice,agreatermoney
  valuewillbepurchasedthanbefore。Inthislastcase,England
  willgain,attheexpenseofGermany,notonlythewholeamount
  oftheduty,butmore;for,themoneyvalueofherexportsto
  Germanybeingincreased,whileherimportsremainthesame,money
  willflowintoEnglandfromGermany。Thepriceofclothwillrise
  inEngland,andconsequentlyinGermany;butthepriceoflinen
  willfallinGermany,andconsequentlyinEngland。Weshall
  exportlesscloth,andimportmorelinen,tilltheequilibriumis
  restored。Itthusappears(whatisatfirstsightsomewhat
  remarkable)thatbytaxingherexports,Englandwould,insome
  conceivablecircumstances,notonlygainfromherforeign
  customersthewholeamountofthetax,butwouldalsogether
  importscheaper。Shewouldgetthemcheaperintwoways;forshe
  wouldobtainthemforlessmoney,andwouldhavemoremoneyto
  purchasethemwith。Germany,ontheotherhand,wouldsuffer
  doubly:shewouldhavetopayforherclothapriceincreasednot
  onlybytheduty,butbytheinfluxofmoneyintoEngland,while
  thesamechangeinthedistributionofthecirculatingmedium
  wouldleaveherlessmoneytopurchaseitwith。
  ’This,however,isonlyoneofthreepossiblecases。If,
  aftertheimpositionoftheduty,Germanyrequiressodiminished
  aquantityofcloth,thatitstotalvalueisexactlythesameas
  before,thebalanceoftradewouldbeundisturbed;Englandwill
  gaintheduty,Germanywillloseit,andnothingmore。If,again,
  theimpositionofthedutyoccasionssuchafallingoffinthe
  demandthatGermanyrequiresalesspecuniaryvaluethanbefore,
  ourexportswillnolongerpayforourimports;moneymustpass
  fromEnglandintoGermany;andGermany’sshareoftheadvantage
  ofthetradewillbeincreased。Bythechangeinthedistribution
  ofmoney,clothwillfallinEngland;andthereforeitwill,of
  course,fallinGermany—ThusGermanywillnotpaythewholeof
  thetax。Fromthesamecause,linenwillriseinGermany,and
  consequentlyinEngland。Whenthisalterationofpriceshasso
  adjustedthedemand,thattheclothandthelinenagainpayfor
  oneanother,theresultisthatGermanyhaspaidonlyapartof
  thetax,andtheremainderofwhathasbeenreceivedintoour
  treasuryhascomeindirectlyoutofthepocketsofourown
  consumersoflinen,whopayahigherpriceforthatimported
  commodityinconsequenceofthetaxonourexports,whileatthe
  sametimethey,inconsequenceoftheeffluxofmoneyandthe
  fallofprices,havesmallermoneyincomeswherewithtopayfor
  thelinenatthatadvancedprice。
  ’Itisnotanimpossiblesuppositionthatbytaxingour
  exportswemightnotonlygainnothingfromtheforeigner,the
  taxbeingpaidoutofourownpockets,butmightevencompelour
  ownpeopletopayasecondtaxtotheforeigner。Suppose,as
  before,thatthedemandofGermanyforclothfallsoffsomuchon
  theimpositionoftheduty,thatsherequiresasmallermoney
  valuethanbefore,butthatthecaseissodifferentwithlinen
  inEngland,thatwhenthepricerisesthedemandeitherdoesnot
  falloffatall,orsolittlethatthemoneyvaluerequiredis
  greaterthanbefore。Thefirsteffectoflayingonthedutyis,
  asbefore,thattheclothexportedwillnolongerpayforthe
  linenimported。MoneywillthereforeflowoutofEnglandinto
  Germany。OneeffectistoraisethepriceoflineninGermany,
  andconsequentlyinEngland。Butthis,bythesupposition,
  insteadofstoppingtheeffluxofmoney,onlymakesitgreater,
  becausethehighertheprice,thegreaterthemoneyvalueofthe
  linenconsumed。Thebalance,therefore,canonlyberestoredby
  theothereffect,whichisgoingonatthesametime,namely,the
  fallofclothintheEnglishandconsequentlyintheGerman
  market。Evenwhenclothhasfallensolowthatitspricewiththe
  dutyisonlyequaltowhatitspricewithoutthedutywasat
  first,itisnotanecessaryconsequencethatthefallwillstop;
  forthesameamountofexportationasbeforewillnotnowsuffice
  topaytheincreasedmoneyvalueoftheimports;andalthoughthe
  Germanconsumershavenownotonlyclothattheoldprice,but
  likewiseincreasedmoneyincomes,itisnotcertainthatthey
  willbeinclinedtoemploytheincreaseoftheirincomesin
  increasingtheirpurchasesofcloth。Thepriceofcloth,
  therefore,mustperhapsfall,torestoretheequilibrium,more
  thanthewholeamountoftheduty;Germanymaybeenabledto
  importclothatalowerpricewhenitistaxed,thanwhenitwas
  untaxed:andthisgainshewillacquireattheexpenseofthe
  Englishconsumersoflinen,who,inaddition,willbethereal
  payersofthewholeofwhatisreceivedattheirowncustom—house
  underthenameofdutiesontheexportofcloth。’
  Itisalmostunnecessarytoremarkthatclothandlinenare
  heremerelyrepresentativesofexportsandimportsingeneral;
  andthattheeffectwhichataxonexportsmighthavein
  increasingthecostsofimports,wouldaffecttheimportsfrom
  allcountries,andnotpeculiarlythearticleswhichmightbe
  importedfromtheparticularcountrytowhichthetaxedexports
  weresent。
  ’Sucharetheextremelyvariouseffectswhichmayresultto
  ourselvesandtoourcustomersfromtheimpositionoftaxeson
  ourexports;andthedeterminingcircumstancesareofanatureso
  imperfectlyascertainable,thatitmustbealmostimpossibleto
  decidewithanycertainty,evenafterthetaxhasbeenimposed,
  whetherwehavebeengainersbyitorlosers。’Ingeneralhowever
  therecouldbelittledoubtthatacountrywhichimposedsuch
  taxeswouldsucceedinmakingforeigncountriescontribute
  somethingtoitsrevenue;butunlessthetaxedarticlebeonefor
  whichtheirdemandisextremelyurgent,theywillseldompaythe
  wholeoftheamountwhichthetaxbringsin。(2*)’Inanycase,
  whateverwegainislostbysomebodyelse,andthereisthe
  expenseofthecollectionbesides:ifinternationalmorality,
  therefore,wererightlyunderstoodandactedupon,suchtaxes,as
  beingcontrarytotheuniversalweal,wouldnotexist。’
  Thusfarofdutiesonexports。Wenowproceedtothemore
  ordinarycaseofdutiesonimports。’Wehavehadanexampleofa
  taxonexports,thatis,onforeigners,fallinginparton
  ourselves。Weshallthereforenotbesurprisedifwefindatax
  onimports,thatis,onourselves,partlyfallingupon
  foreigners。
  ’Insteadoftaxingtheclothwhichweexport,supposethatwe
  taxthelinenwhichweimport。Thedutywhichwearenow
  supposingmustnotbewhatistermedaprotectingduty,thatis,
  adutysufficientlyhightoinduceustoproducethearticleat
  home。Ifithadthiseffect,itwoulddestroyentirelythetrade
  bothinclothandinlinen,andbothcountrieswouldlosethe
  wholeoftheadvantagewhichtheypreviouslygainedbyexchanging
  thosecommoditieswithoneanother。Wesupposeadutywhichmight
  diminishtheconsumptionofthearticle,butwhichwouldnot
  preventusfromcontinuingtoimport,asbefore,whateverlinen
  wedidconsume。
  ’Theequilibriumoftradewouldbedisturbedifthe
  impositionofthetaxdiminished,intheslightestdegree,the
  quantityoflinenconsumed。For,asthetaxisleviedatourown
  custom—house,theGermanexporteronlyreceivesthesamepriceas
  formerly,thoughtheEnglishconsumerpaysahigherone。If,
  therefore,therebeanydiminutionofthequantitybought,
  althoughalargersumofmoneymaybeactuallylaidoutinthe
  article,asmalleronewillbeduefromEnglandtoGermany:this
  sumwillnolongerbeanequivalentforthesumduefromGermany
  toEnglandforcloth,thebalancethereforemustbepaidin
  money。PriceswillfallinGermanyandriseinEngland;linen
  willfallintheGermanmarket;clothwillriseintheEnglish。
  TheGermanswillpayahigherpriceforcloth,andwillhave
  smallermoneyincomestobuyitwith;whiletheEnglishwill
  obtainlinencheaper,thatis,itspricewillexceedwhatit
  previouslywasbylessthantheamountoftheduty,whiletheir
  meansofpurchasingitwillbeincreasedbytheincreaseoftheir
  moneyincomes。
  ’Iftheimpositionofthetaxdoesnotdiminishthedemand,
  itwillleavethetradeexactlyasitwasbefore。Weshallimport
  asmuch,andexportasmuch;thewholeofthetaxwillbepaid
  outofourownpockets。
  ’Buttheimpositionofataxonacommodityalmostalways
  diminishesthedemandmoreorless;anditcannever,orscarcely
  ever,increasethedemand。Itmay,therefore,belaiddownasa
  principle,thatataxonimportedcommodities,whenitreally
  operatesasatax,andnotasaprohibitioneithertotalor
  partial,almostalwaysfallsinpartupontheforeignerswho
  consumeourgoods;andthatthisisamodeinwhichanationmay
  appropriatetoitself,attheexpenseofforeigners,alarger
  sharethanwouldotherwisebelongtoitoftheincreaseinthe
  generalproductivenessofthelabourandcapitaloftheworld,
  whichresultsfromtheinterchangeofcommoditiesamongnations。’
  Thoseare,therefore,intherightwhomaintainthattaxeson
  importsarepartlypaidbyforeigners;buttheyaremistakenwhen
  theysay,thatisisbytheforeignproducer。Itisnotonthe
  personfromwhomwebuy,butonallthosewhobuyfromus,thata
  portionofourcustom—dutiesspontaneouslyfalls。Itisthe
  foreignconsumerofourexportedcommodities,whoisobligedto
  payahigherpriceforthembecausewemaintainrevenuedutieson
  foreigngoods。
  Therearebuttwocasesinwhichdutiesoncommoditiescanin
  anydegree,orinanymanner,fallontheproducer。Oneis,when
  thearticleisastrictmonopoly,andatascarcityprice。The
  priceinthiscasebeingonlylimitedbythedesiresofthe
  buyer;thesumobtainedfromtherestrictedsupplybeingthe
  utmostwhichthebuyerswouldconsenttogiveratherthango
  withoutit;ifthetreasuryinterceptsapartofthis,theprice
  cannotbefurtherraisedtocompensateforthetax,anditmust
  bepaidfromthemonopolyprofits。Ataxonrareandhigh—priced
  wineswillfallwhollyonthegrowers,orrather,ontheowners
  ofthevineyards。Thesecondcaseinwhichtheproducersometimes
  bearsaportionofthetax,ismoreimportant:thecaseofduties
  ontheproduceoflandorofmines。Thesemightbesohighasto
  diminishmateriallythedemandfortheproduce,andcompelthe
  abandonmentofsomeoftheinferiorqualitiesoflandormines。
  Supposingthistobetheeffect,theconsumers,bothinthe
  countryitselfandinthosewhichdealtwithit,wouldobtainthe
  produceatsmallercost;andapartonly,insteadofthewhole,
  ofthedutywouldfallonthepurchaser,whowouldbeindemnified
  chieflyattheexpenseofthelandownersormine—ownersinthe
  producingcountry。
  Dutiesonimportationmay,then,bedivided’intotwo
  classes:thosewhichhavetheeffectofencouragingsome
  particularbranchofdomesticindustry,andthosewhichhavenot。
  Theformerarepurelymischievous,bothtothecountryimposing
  them,andtothosewithwhomittrades。Theypreventasavingof
  labourandcapital,which,ifpermittedtobemade,wouldbe
  dividedinsomeproportionorotherbetweentheimportingcountry
  andthecountrieswhichbuywhatthatcountrydoesormight
  export。
  ’Theotherclassofdutiesarethosewhichdonotencourage
  onemodeofprocuringanarticleattheexpenseofanother,but
  allowinterchangetotakeplacejustasifthedutydidnot
  exist,andtoproducethesavingoflabourwhichconstitutesthe
  motivetointernational,astoallothercommerce。Ofthiskind
  aredutiesontheimportationofanycommoditywhichcouldnotby
  anypossibilitybeproducedathome;anddutiesnotsufficiently
  hightocounterbalancethedifferenceofexpensebetweenthe
  productionofthearticleathomeanditsimportation。Ofthe
  moneywhichisbroughtintothetreasuryofanycountrybytaxes
  ofthislastdescription,apartonlyispaidbythepeopleof
  thatcountry;theremainderbytheforeignconsumersoftheir
  goods。