Tithes

A tithe is a tax paid as a fixed share of agricultural output. Ricardo uses the traditional rate of one tenth: if a farm grows 100 quarters of corn, 10 quarters go to the church and 90 remain.

The chapter's puzzle is simple to state: the farmer hands over the corn, but does the farmer finally bear the loss? Ricardo says no. Because the tithe reaches even the no-rent land that sets the price, corn must become dearer enough to restore the ordinary rate of profit. The consumer ultimately pays.

A tax on pure rent reaches only the surplus of better land. A tithe reaches every harvested quarter, including quarters grown on marginal land.

PURE RENT TAX                         TITHE

better land: taxed                    better land: taxed
marginal land: no rent, no tax        marginal land: output taxed
price-setting cost: unchanged         price-setting cost: rises

That last line controls the whole argument. The farmer on marginal land already earns no rent. If one tenth of the crop is removed while the selling price stays fixed, the remaining crop cannot replace the farmer's advances and provide the ordinary profit available elsewhere.

The legal payer and the economic bearer are different. The farmer delivers the tithe, but competition and capital movement transmit the burden into the price of raw produce.

Suppose the marginal farm produces 100 quarters. Before tithes, corn sells for £4 per quarter, so the crop is worth £400. That revenue covers the farmer's advances and ordinary profit.

Now impose a tithe of one tenth:

The restoring price is:

required revenue / saleable crop

£400 / 90 quarters = £4.44 per quarter

A ten-percent tax on output requires an eleven-and-one-ninth-percent price rise, not merely ten percent. The farmer must recover £400 from only 90 saleable quarters.

Return to Ricardo's familiar plots. With equal advances, the three grades yield 180, 170, and 160 quarters. Before tithes, the 160-quarter plot is marginal.

The physical differences also shrink by one tenth:

Corn rent falls from 20 to 18 quarters on No. 1 and from 10 to 9 on No. 2. Yet the price of each remaining quarter rises by the inverse proportion, so money rent can remain unchanged.

No. 1 before: 20 qrs x £4.00 = £80
No. 1 after:  18 qrs x £4.44 = £80

No. 2 before: 10 qrs x £4.00 = £40
No. 2 after:   9 qrs x £4.44 = £40

This is a classic Ricardo distinction: the landlord receives fewer physical quarters, but those quarters exchange for more money. Measuring rent in corn and measuring it in money tell different-looking stories about the same adjustment.

The tithe rate stays at one tenth, but the burden does not stay fixed. It changes along two dimensions:

1. More cultivated land means more total corn is subject to the tithe.
2. Harder cultivation raises corn's value, making each tithed quarter more valuable.

Imagine total output grows from one million to two million quarters. The tithe grows from 100,000 to 200,000 quarters. If harder cultivation has also raised corn's relative value, the second 200,000-quarter payment can be worth much more than twice the first 100,000-quarter payment.

This is why Ricardo calls tithes especially burdensome in a progressing society. The tax is attached to gross output while the net surplus available after production costs tends to become a smaller share of that output.

The same tenth can feel radically different depending on production costs.

The tithe remains ten percent of gross produce in every row. But it absorbs a growing fraction of net produce as the cost of producing the crop rises.

gross crop:  [========================================] 100

easy land:   [production================][net========]
                                         [tithe==]

hard land:   [production================================][net====]
                                                     [tithe==]

Ricardo's objection is not merely that a tenth is collected. It is that the rule ignores how much of the harvest had to be used to create the harvest.

A domestic tithe taxes home-grown corn. If imported corn enters without an equivalent charge, foreign corn gains an artificial advantage.

Ricardo compares this with taxing home-made cloth while leaving imported cloth untaxed. The tax does not reveal that foreign production is naturally cheaper; it changes the comparison.

An equal tax on imported corn would remove that artificial preference, but consumers would then pay the higher taxed price on both sources. If the revenue finances public expenses that would otherwise require other taxes, Ricardo treats that as more even than protecting a special recipient while leaving the distortion in place.

ASK: does the charge reach the price-setting margin?

NO  -> it divides an existing surplus
YES -> it changes the cost of supplying the last required corn

The question is more useful than the tax's name. A payment described as a "land tax" can behave like a rent tax, a tithe, or a fixed production charge depending on what is assessed.

• A tithe takes a fixed proportion of gross agricultural output.
• It reaches marginal land, unlike a tax on pure rent.
• Corn prices rise until the crop left after the tithe again yields the ordinary farm profit.
• Farmers hand over the tithe, but consumers bear it through dearer raw produce.
• Corn rent falls in physical quantity while money rent can remain unchanged.
• A constant share of gross output becomes a larger burden on net output as cultivation grows harder.
• An untaxed import competes against taxed domestic corn with an artificial advantage.

• [ ] Can you explain why taxing marginal land changes the corn price?
• [ ] Can you calculate the price needed when 10 of 100 quarters are tithed?
• [ ] Can you distinguish the farmer who remits the tithe from the consumer who bears it?
• [ ] Can you show why 20 quarters of corn rent become 18 after a ten-percent tithe?
• [ ] Can you explain how money rent can stay at £80 while corn rent falls?
• [ ] Can you distinguish a tax on gross produce from a tax on net rent?
• [ ] Can you explain why an untaxed import gains an artificial advantage?