Page:Manual of Political Economy.djvu/161

Rh

T has been shown that the three requisites of the production of wealth are land, labour and capital. Since, therefore, land, labour and capital are essential to the production of wealth, it is natural to suppose that the wealth which is produced ought to be possessed by those who own the land, labour and capital which have respectively contributed to its production. The share of wealth which is thus allotted to the possessor of the land is termed rent; the portion allotted to the labourer is termed wages, and the remuneration of the capitalist is termed profit. The remuneration therefore received in the form of rent, wages and profits, represents the three distinct claims which individuals have upon any wealth which is produced. Having pointed out that wealth is distributed between rent, wages and profits, we must proceed to enunciate the laws which regulate the comparative amounts of rent, wages and profits. In different countries these relative amounts vary greatly; for instance, rents are much higher in England than in Australia, and wages are much lower in the one country than in the other. The rate of profit is also much greater in Australia than in England. In Australia, ten per cent, may be obtained on the security of a freehold mortgage, whereas in England a similar investment will not yield more than four or four-and-a-half per cent. Without, therefore, inquiring whether Australia is more productive of wealth than England, it is very important to establish principles which will explain why wealth is so very differently distributed in the two countries. Other countries present equally striking points of difference.