arose, and always lays especial weight upon the distinctively fiscal importance of lands and goods and people.
Income[1] being with Petty the starting point for estimating wealth, he feels the necessity of explaining those sorts of income—rent and interest— which do not result evidently from current labour. Now the fundamental question arising alike in a theory of rent and in a theory of interest is this: why does the right to receive a definite annual payment throughout an infinite succession of years command in the market only a finite sum? As applied to rent, this is the question of the number of "years purchase," and Petty, who frequently employs that common phrase, also discusses the problem[2]. But this was aside from his main purpose, and he neither dwelt on the suggestion nor applied it to money. He recognized that the value of the fee depended[3] upon the rent which the land would yield, and was therefore interested rather in ascertaining as a factor in his studies of national wealth and its growth, why a specific piece of land bears a certain rent and neither more nor less, than in determining the capital value of that rent. The answer is given in a remarkable passage in the "Treatise of Taxes[4]," and is elaborated in the "Political Anatomy of Ireland[5]." The corn rent of agricultural lands, he says, is determined by the excess of their produce over the expenses of their cultivation, paid in corn, and the money value of this excess will be measured by the amount of silver which a miner, working for the same time as the cultivator of the corn land, will have left, after meeting his expenses with a part of the silver which he secures. The labour theory of value thus adopted was probably suggested by Hobbes[6]. But to the question why there should be any surplus of value above costs either in corn-farming or mining he has an answer of his own. This answer differs from that now become familiar. The notion of diminishing returns, forcing recourse to fields of inferior natural and indestructible powers in order to supply the market and thus giving rise to a differential rent, did not occur to him. On the contrary he probably thought that with proper cultivation, the profitable fertility of
- ↑ Measured by expenditure, to which he assumes income at least equal.
- ↑ P. 45.
- ↑ Though in varying proportion, according as some special honour, pleasure or privilege attaches to the possession of certain lands intrinsically like others, p. 46. Cf. p. 286.
- ↑ Pp. 42—45 and 48—49.
- ↑ Pp. 181—182.
- ↑ De Cive, ch. xxiv. Opera omnia, iii. 185. It was certainly adopted, without credit, by Benjamin Franklin, whose cast of mind generally was curiously like Petty's. Cf. Franklin's Works, i. 371.
