Progress and Poverty, Prefaces

Progress and Poverty, Prefaces
...Nonetheless, I independently deduce the law of interest and the law of wages. Investigation shows that interest and wages rise together when rent falls, and fall together when rent rises. Therefore, rent, wages, and interest are all determined by the margin of production, the point in production where rent begins. I also point out a source of much confusion: mistaking the profits of monopoly for the legitimate earnings of capital.

The laws of distribution are thus brought into harmony. The fact that rent always increases with material progress explains why wages and interest do not.

The question is, what causes rent to increase? Population growth not only lowers the margin of production, it also increases productivity. Both factors increase the proportion of income taken by rent, reducing the proportion of wages and interest. Yet, technological and organizational improvements lead to the same results. Even with a constant population, these alone would produce all the effects Malthus attributes to population growth—as long as land is held as private property...