Progress and Poverty · Chapter
VII: The Correlation and Coordination of These Laws explained
This chapter demonstrates the harmony and correlation of the laws of distribution—rent, wages, and interest—as derived from the fundamental principle that men seek to gratify their desires with the least exertion.
What happens
This chapter demonstrates the harmony and correlation of the laws of distribution—rent, wages, and interest—as derived from the fundamental principle that men seek to gratify their desires with the least exertion. It contrasts the current political economy's disjointed statements with a unified framework where all three laws depend on the margin of cultivation, showing that accepting the law of rent necessarily implies the laws of wages and interest as stated.
Themes in this chapter
Distribution of Wealth
The chapter focuses on the correlation of the laws governing rent, wages, and interest as a unified system.
Wages and Labor
Wages are shown to depend on the margin of cultivation, not on the ratio of laborers to capital.
Characters to notice
- David Ricardo
The law of rent, accepted since Ricardo's time, is foundational to the chapter's argument.
Key passages
“The law of interest and the law of wages which we have substituted for those now taught are necessary deductions from the great law which alone makes any science of political economy possible—the all-compelling law that is as inseparable from the human mind as attraction is inseparable from matter, and without which it would be impossible to previse or calculate upon any human action, the most trivial or the most important.”
The proposed laws of interest and wages are logical conclusions from the fundamental principle that humans always seek to satisfy their desires with the least effort—a principle as essential to economics as gravity is to physics.
This paraphrases the author's assertion that the new laws are derived from a basic, universally accepted premise.
“In the current statement the laws of distribution have no common center, no mutual relation; they are not the correlating divisions of a whole, but measures of different qualities. In the statement we have given, they spring from one point, support and supplement each other, and form the correlating divisions of a complete whole.”
Traditional economics treats rent, wages, and interest as unrelated measures, whereas the author's unified framework shows they all derive from the same principle and together form a coherent system.
This contrasts the fragmented view of distribution with the integrated perspective presented in the chapter.