land could be indefinitely increased[1]. But he suggested in the "Treatise[2]," and asserted in the "Political Arithmetick[3]" that the amount of rent per acre is determined by the density of the population dependent for food upon the land, and varies inversely as the said density. In other words the rent of land is attributed to its situation[4] rather than to its technical fertility. The formula has a similar arithmetical neatness to that of the formula commonly called Ricardian, and it comes, on the whole, perhaps quite as near to measuring the commercial facts[5]. This praise, if praise it be, is not deemed unduly high.
In interest Petty recognizes two elements, a compensation for risk[6], and a payment for the inconvenience which a man admits against himself in giving out his money so that he may not demand it back until a certain time, whatever his own necessities shall be in the mean time[7]. The amount of this last payment, upon any specific sum—in modern language the rate of interest per cent.—cannot be less than the rent of so much land as that sum would buy[8]. Exchange he explains as "local usury" meaning, apparently, a compensation for the costs of moving money, of which costs risk is the largest.
A theory of wages was not demanded by Petty's method of calculating national wealth. For that purpose he could take them as a given fact, or rather as a fact inferable from the labourer's expenditures, and as he had no conception of the problem of distribution in the modern sense and was interested rather in the aggregate number of labourers than in their individual differences, he contents himself with a passing suggestion that wages generally are the result of, and equal to, the increase which a man can effect by his labour in the spontaneous productivity of the soil[9]. The only other distributive suggestion regarding wages is the remark, wholly incidental, that when wages of husbandmen rise rents of land must consequently fall[10].
- ↑ Cf. p. 249.
- ↑ Pp. 48—49.
- ↑ Pp. 286—287.
- ↑ Cf. Commons, Distribution of Wealth, 27—29.
- ↑ Cf. R. Jones, Essay on the Distribution of Wealth, 260—268. Petty is not mentioned by Jones.
- ↑ Pp. 48, 304.
- ↑ P. 47.
- ↑ P. 48. This is similar to a remark of Turgot's, whom Böhm-Bawerk pronounces "the first who tried to give a scientific explanation of natural interest on capital." Petty is, of course, open to the same criticism of reasoning in a circle which Böhm-Bawerk passes on Turgot. Capital and Interest, 61—66.
- ↑ P. 181.
- ↑ P. 267.
