Truce in the Forest Essay Example

then it must have been the case in the past that such lands existed. However, whether there are remaining lands of this kind or not is irrelevant to this question. The crucial factor is whether there is any capital invested in Great Britain on land that only yields the return of stock with its ordinary profits, regardless of whether it is old or new land.

When a farmer enters into a lease agreement for seven or fourteen years, they may choose to invest ?10,000 in capital on the land. They do so knowing that they can replace the portion of their stock that they are required to spend, pay their rent, and earn the general rate of profit given the current price of grain and raw produce. They will not invest ?11,000 unless the final ?1,000 can be employed so productively as to give them the usual profits of stock. When making their decision on whether to invest it or not, they only consider whether the price of raw produce is sufficient to cover their expenses and profits since they know they will not have to pay any additional rent.

Regardless of the landlord's desire to increase the rent by ? 1,000 after the lease expires, the tenant will not agree to it. The tenant will withdraw the money since they only earn average profits from it, which can be obtained through alternative investments. As a result, unless there is a continuous rise in raw material prices or a decrease in general profit rates, paying this increased rent would not be feasible for the tenant.

Had Adam Smith considered this, he would

not have asserted that rent is included in the cost of raw materials. Instead, the price is determined by the profit obtained from invested capital without any rental payments involved. If Smith had acknowledged this idea, there would be no differentiation between regulating rent for mines and land. In Smith's view, a coal mine's ability to afford rent depends on its productivity and location.

A mine's fertility or barrenness is determined by the amount of mineral that can be extracted with a specific labor input. If this quantity surpasses that of other mines of the same type, it is deemed fertile. Nevertheless, certain coal mines are unworkable due to their lack of productivity. Their yield does not cover expenses or generate profit/rent. Conversely, some mines produce just enough output to cover labor costs and replenish operational stock while still yielding customary profits.

The coal mines mentioned in this passage are unique in that they do not generate rent for the landowner but instead provide profit to the project leader. Only the landowner themselves can effectively operate these mines as they undertake the work and benefit from the capital profit. This method of operation is commonly seen in several coal mines in Scotland and cannot be replicated differently. The landowner has stated that anyone else wanting to work these mines must pay rent, however, no one can afford it. Furthermore, there are other coal mines in this country that could be productive but remain unused due to their unfavorable location.

The text explains that in an inland country with few inhabitants and lacking good transportation options, a sufficient quantity of mineral could be

extracted from a mine with less labor. However, this quantity would be difficult to sell. The concept of rent applies to both land and mines, with the proportion of produce and rent being determined by the absolute fertility of the land. If there were no land without rent, then the amount of rent on the worst land would depend on the value of the produce minus capital expenditure and ordinary profits. Higher quality or more favorably situated land would have higher rent due to its superior advantages. This principle applies to land of varying qualities.

Is it not as certain that the fertility of the land determines the portion of produce paid for rent, as it is for mines? Adam Smith argues that some mines can only be worked by their owners, as they only generate enough profit to cover expenses and capital profits. It would be expected that these specific mines regulate the price of produce from all mines.

If there is a higher demand for coal than the current mines can meet, the price of coal will rise. This increase in price will continue until a new mine owner, who has a less efficient mine, realizes that they can still make money by operating it. If the new mine is moderately productive, the price will not increase significantly until it becomes profitable for the owner to invest capital. However, if the new mine does not produce enough coal, it is clear that the price will continue to rise until it covers expenses and allows for standard profits.

According to the text, it seems that the least fertile mine always determines

the price of coal. However, Adam Smith disagrees with this view. He states that the most fertile coal mine actually determines the price of coals at all the other nearby mines. Both the owner and the contractor of the mine realize that they can make more profit by slightly undercutting their neighbors.

Their neighbors are soon forced to sell at the same price, even though it may be harder for them to afford it, and it always reduces their rent and profit. Some works are completely abandoned, while others can only be operated by the owner since they cannot afford any rent. If the demand for coal decreases or if new methods increase the quantity, the price will decrease and some mines will be abandoned. However, in every scenario, the price must still cover the costs and profits of the mine that operates without being subject to rent.

Adam Smith argues that the price of coal is determined by the least productive mine. He explains that when coal can only be sold at a price that covers production costs and generates profits, it sets a benchmark for prices in the industry. In cases where coal mines cannot generate rent for the landlord and they are left to manage it themselves or abandon it, the price of coal tends to align with this cost. If there is an excess supply of inexpensive coal due to various factors, it becomes necessary to abandon unprofitable mines or those that barely generate any rent. Similarly, if there is an abundance of affordable raw materials, it becomes imperative to give up cultivating lands that do not yield sufficient

rent.

If potatoes were to become the primary staple food, like rice in certain nations, a significant portion of currently cultivated land would likely be left unused. As per Adam Smith's analysis, an acre of potatoes can yield six thousand weight of solid sustenance, which is three times more than an acre of wheat. Hence, it would require a substantial increase in population before the surplus food produced from the previously utilized wheat fields could be consumed. This scenario would result in the abandonment of vast amounts of land and a decline in rental prices. Only when the population has doubled or tripled would it be possible to cultivate and rent out the same amount of land at similar high rates as before.

The payment to the landlord would not be affected by the type of produce, whether it was potatoes that could feed three hundred people or wheat that could only feed one hundred. This is because the expenses of production would decrease if the laborer's wages were based on the price of potatoes rather than wheat. However, this would not increase rent, but instead increase profits. Profits rise when wages fall and decrease when wages rise. Rent would be determined by the same principle whether wheat or potatoes were cultivated. It would always be equal to the difference in produce obtained with equal capital on the same or different quality land. As long as lands of the same quality were cultivated and their relative fertility and advantages remained constant, rent would always be a consistent proportion of the gross produce.

Adam Smith argues that when the cost of production decreases, the landlord's

share and quantity of goods also increase. This is particularly true in situations where there is abundant produce compared to scarcity. Smith uses rice fields as an example, highlighting their ability to produce more food than even the most fertile corn field. In countries where rice serves as the common staple food and cultivators depend on it for sustenance, the landlord should receive a larger portion of the surplus compared to corn-producing countries.

According to Buchanan, if any other crop becomes more abundant than corn, the landlord's rent will increase in proportion. If potatoes were to become the main food source, landlords would experience a significant and long-lasting decrease in rent. They would receive much less sustenance than they currently do, with the value of that sustenance decreasing to one-third of its current value. However, manufactured goods purchased using a portion of the landlord's rent would only decrease in price due to the reduced cost of raw materials resulting from enhanced land fertility.

If the population increases and more land of equal quality is needed for farming, the landlord will still receive the same proportion of produce, which will have the same value. Therefore, rent will remain unchanged. However, profits will rise due to lower food prices and wages. Increased profits facilitate capital accumulation, leading to a greater demand for labor and ultimately benefiting landlords in the long term. Moreover, with abundant food production from existing lands, they can sustain a larger population and potentially charge higher rents as society advances.

Undoubtedly, this would greatly benefit landlords and align with the principle that this inquiry aims to establish – that extraordinary profits

are only temporary. In essence, all surplus produce from the land, after deducting moderate profits for accumulation, ultimately belongs to the landlord. The abundance of produce resulting from a low labor cost would not only increase the yield from cultivated lands but also allow for more capital investment and a higher value extraction. Additionally, even lower-quality lands could be cultivated for significant profits. Such developments would prove advantageous for both landlords and consumers alike. Moreover, the machine responsible for producing a crucial consumer good would be enhanced and accordingly rewarded based on its demand.

The advantages initially benefit laborers, capitalists, and consumers. However, as the population grows, these benefits gradually shift towards the landlords. Apart from these improvements, where the community and landlords have different levels of interest, the landlord's interest is always in conflict with that of the consumer and manufacturer. The price of corn can only be consistently higher if it requires additional labor and its production cost increases. Consequently, rent also increases due to the same reason. Therefore, it is in the landlord's best interest to ensure that the cost of producing corn rises.

The consumer wants corn to be low in price compared to money and other goods since corn is always purchased with money or goods. Similarly, the manufacturer does not want corn to have a high price because it would lead to higher wages without increasing the price of their commodity. Hence, the manufacturer would have to give more of their commodity in exchange for the corn they consume and pay higher wages to their workers without receiving any compensation. Therefore, everyone except the landlords will be

negatively affected by the rise in corn prices.

The relationship between the landlord and the public is not a mutually beneficial trade, but rather one side suffers losses while the other gains. If importation of cheaper corn is possible, not importing causes greater loss for one side compared to the gain for the other. Adam Smith does not differentiate between a low value of money and a high value of corn, implying that the landlord's interests align with society. In scenario one, money has lower value relative to all goods, while in scenario two, corn is priced higher compared to both goods and money.

Adam Smith argues that his explanation about the value of money does not hold true for the value of corn. If there were no limitations on importing corn, farmers and country gentlemen would probably earn less money for their corn on average, but that money would have a greater worth. This would allow them to purchase more products and hire more workers. Even though they might have less silver in quantity, their real wealth and income would stay the same. Thus, they would not be discouraged from cultivating corn as much as they currently are.

When the price of corn decreases, the value of silver increases, causing a decrease in the price of other goods. This benefits the country's industry in foreign markets and promotes growth. The size of the domestic market for corn is influenced by both the overall industry and the number of people producing goods that can be exchanged for corn. However, it remains important for corn sales in every country.

The rise in

the value of silver due to a decrease in the monetary price of corn has a positive impact on the primary market for corn, promoting its growth. Adam Smith explains that the wealth or scarcity of gold and silver does not significantly affect landlords compared to all types of produce. However, a higher price for corn is always beneficial to landlords for two reasons. Firstly, it allows them to obtain more corn as rent. Secondly, with each equivalent measure of corn, landlords gain control over a greater amount of money and other goods purchasable with money.