Ricardo says,
““There is this advantage always resulting from a relatively low price of corn,—that the division of the actual production is more likely to increase the fund for the maintenance of labour, inasmuch as more will be allotted, under the name of profit, to the productive class, and less under the name rent, to the unproductive class” (l.c., p. 317).” (p 549)
In other words, if the price of food is lower, wages can be lower, which raises profits, which means capital accumulation can be greater, and so more workers will be employed. And, Ricardo says the opposite is true, because rent is a deduction from surplus value, which thereby reduces profits, and so reduces the potential for capital accumulation. Rent is a product of value, Ricardo says, but not of wealth. In other words, when the value of food is high this facilitates higher rents. But, higher rents do not result in any greater quantity of agricultural products, being created, i.e. greater wealth.
““Rent is a creation of value … but not a creation of wealth. If the price of corn, from the difficulty of producing any portion of it, should rise from £4 to £5 per quarter, a million of quarters will be of the value of £5,000,000 instead of £4,000,000, … the society altogether will be possessed of greater value, and in that sense rent is a creation of value. But this value is so far nominal, that it adds nothing to the wealth, that is to say, the necessaries, conveniences, and enjoyments of the society. We should have precisely the same quantity, and no more of commodities, and the same million quarters of corn as before; but the effect of its being rated at £5 per quarter, instead of £4, would be to transfer a portion of the value of the corn and commodities from their former possessors to the landlords. Rent then is a creation of value, but not a creation of wealth; it adds nothing to the resources of a country” (l.c., pp. 485–86).” (p 549-50)
Ricardo sets out his argument, which was the basis of the industrial capitalists' demands for the repeal of the Corn Laws. If foreign corn is imported, at a lower price, Ricardo argues, this reduces the value of labour-power, and raises profits, thereby facilitating capital accumulation. He continues,
““But it may be said, that the capitalist’s income will not be increased; that the million deducted from the landlord’s rent, will be paid in additional wages to labourers! Be it so; … the situation of the society will be improved, and they can bear the same money burthens with greater facility than before; it will only prove what is still more desirable, that the situation of another class, and by far the most important class in society, is the one which is chiefly benefited by the new distribution. All that they receive more than 9 millions, forms part of the net income of the country, and it cannot be expended without adding to its revenue, its happiness, or its power. Distribute then the net income as you please. Give a little more to one class, and a little less to another, yet you do not thereby diminish it; a greater amount of commodities will be still produced with the same labour, although the amount of the gross money value of such commodities will be diminished; but the net money income of the country, that fund from which taxes are paid and enjoyments procured, would be much more adequate, than before, to maintain the actual population, to afford it enjoyments and luxuries, and to support any given amount of taxation” (l.c., pp. 515–16).” (p 550)
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