advance in the arts of production (while capital and population remain stationary). We can now study by themselves the effect of improvements on wages, profits, and rent. The general effects arising from the extended introduction of machinery into agriculture and manufactures, the lowered cost of transportation by steam, have been to lessen the value of articles consumed chiefly by the laboring-classes. For the sake of clearness, imagine that the improvement comes suddenly. The first effect will be to lower the value and price of articles entering into the real wages of the laborers; and, if those consist mostly of food, there will be a rise in the margin of cultivation and a fall in rents (3). It has been previously shown299 that improvements retard, or put back, the law of diminishing returns from land (or in manufactures compensate for it), and so lower rents. The poorest soil cultivated is now of a better grade than before, and the produce is yielded at a less cost and value; so that the land with which the best grades are compared, to determine the rent, is not separated from the best grades by so wide a gap. It would at first blush seem, then, that the interests of the landlord were antagonistic to improvements, since they lower rents; but, in practice, it is not so, as we shall soon see.
We have seen that improvements cheapen the price of articles [pg 492] entering into the real wages of the laborer. Having had a given sum as money wages before the change, then, when the sudden change of improvements came, it lowered prices to the laborer, and the same money wages bought more (1) real wages. If nothing more happened, we could see that improvements raised real wages—without lowering (2) profits (because cost of labor remains the same, since the lowered cost