It is necessary to clarify the exact nature of the difficulty faced by modern economics, as the theoretical expression of the capitalist mode of production, in its treatment of ground-rent. This has still not been understood even by the large number of more recent writers, as is shown by each new attempt to give ground-rent a ‘new’ explanation. The novelty in this case consists almost invariably in regression to a standpoint long superseded. The difficulty is not one of explaining the surplus product produced by agricultural capital, and the corresponding surplus-value; this question is solved by analysis of the surplus-value all productive capital produces, whatever the sphere in which it is invested. The difficulty consists rather in showing how, after the equalization of surplus-value between the various capitals to give the average profit, whereby they receive a share in the total surplus-value produced by the social capital in all spheres of production together that is corresponding and proportionate to their relative sizes – in showing how, after this equalization, after the distribution of all the surplus-value that there is to distribute has apparently already taken place, there is still an excess part of this surplus-value left over, a part which capital invested on the land pays to the landowner in the form of ground-rent. It must derive from somewhere. Quite apart from the practical motives which goaded the modern economist to investigate this question, as spokesman for industrial capital against landed property – motives which we shall indicate in more detail in the chapter on the history of ground-rent* – the question was of decisive interest for them as theorists. To concede that the phenomenon of rent for capital invested in agriculture stemmed from a particular effect of the sphere of investment itself, from the earth’s crust or certain properties pertaining to it, would be to renounce the very concept of value itself, i.e. to abandon any possibility of scientific understanding in this area. Even the simple perception that rent is paid out of the price of the agricultural product – which is true even when it is paid in kind, if the farmer is to extract his price of production ’showed the absurdity of explaining the excess of this price over and above the customary price of production, i.e. the relative expensiveness of agricultural products, in terms of the extra natural productivity of agricultural industry over the productivity of other branches of industry. For on the contrary, the more productive labour is, the cheaper each aliquot part of its product, since the greater the amount of use-value in which the same quantum of labour, i.e. the same value, is represented.
The whole difficulty in analysing rent thus consisted in explaining the excess of agricultural profit over average profit; not surplus-value as such, but rather the extra surplus-value specific to this sphere of production; i.e. not even the ’net product’, but rather the extra net product over and above the net product of other branches of industry. The average profit itself is a product, formed by a process of social life proceeding under quite particular historical relations of production, a product which, as we have seen, presupposes very elaborate mediations. If we are to speak of an excess over the average profit, this average profit must first be established as a measure and, as is the case in the capitalist mode of production, as the overall regulator of production. Thus in forms of society where it is not yet capital that performs this function of extracting all surplus labour and appropriating it for itself, at least in the first instance – i.e. where capital has not yet subsumed society’s labour or has done so only sporadically – there can be no question at all of rent in the modern sense, of rent as an excess over and above the average profit, i.e. over and above the proportionate share of each individual capital in the total surplus-value that the total capital produces. It shows the naïveté of M. Passy (on which more below) that he speaks of rent in the most primitive conditions as already a surplus over and above profit – over a historically determined social form of surplus-value which, according to M. Passy, however, can exist quite nicely without any society at all.*
For the early economists who were only just beginning to analyse the capitalist mode of production, in their time still undeveloped, the analysis of rent presented either no difficulty at all or else a difficulty of a quite different kind. Petty, Cantillon † and all those other writers who stand closer to the feudal period assume that ground-rent is the normal form of surplus-value, while profit for them is still lumped indiscriminately together with wages or at most appears as a portion of this surplus-value extorted from the landowner by the capitalist. They therefore base themselves on a state of affairs in which, firstly, the agricultural population are still the overwhelming majority of the nation, and, secondly, the landowner still appears as the person who appropriates in the first instance the excess labour of the immediate producers, by way of his monopoly of landed property. Landed property thus still appears as the chief condition of production. They could not yet imagine the problem of investigating, from the standpoint of the capitalist mode of production, how landed property manages to extract again from capital one part of the surplus-value that this has produced (i.e. extorted from the immediate producers) and in the first instance already appropriated.
With the Physiocrats, the difficulty is of quite another kind. As the first systematic interpreters of capital, in fact, they tried to analyse the nature of surplus-value in general. For them this analysis coincided with the analysis of rent, the only form in which surplus-value existed for them. Rent-bearing or agricultural capital, therefore, is for them the only capital that produces surplus-value, and the agricultural labour that it sets in motion is the only labour giving rise to surplus-value, i.e. from the capitalist standpoint the only truly productive labour. For them, the production of surplus-value is, quite correctly, the determinate element. Apart from other services, which we shall discuss in Volume 4,* theirs is the great merit of returning from commercial capital, which operates only in the circulation sphere, to productive capital, in contrast to the mercantilists, who in their crude realism form the true vulgar economists of their day and whose practical self-interest pressed the beginnings of scientific analysis by Petty and his school right into the background. Incidentally, the Physiocrats’ criticism of the Mercantile System relates only to its conceptions of capital and surplus-value. We have already noted † how the Monetary System correctly proclaims that production for the world market and the transformation of the product into a commodity, hence into money, is the precondition and requirement for capitalist production. In its continuation as the Mercantile System, it is no longer the transformation of commodity value into money that is decisive, but instead the production of surplus-value-albeit from the irrational standpoint of the circulation sphere, and at the same time in such a way that this surplus-value is expressed in surplus money, in a favourable balance of trade. But it is also the characteristic feature of the self-interested merchants and manufacturers of that time, and belongs to the period of capitalist development that they represent, that the transformation of feudal agricultural societies into industrial societies, and the resulting industrial struggle of nations on the world market, involves an accelerated development of capital which cannot be attained in the so-called natural way but only by compulsion. It makes a substantial difference whether the national capital is transformed into industrial capital gradually and slowly, or whether this transformation is accelerated in time by the taxes they impose via protective duties, principally on the landowners, small and middle peasants and artisans, by the accelerated expropriation of independent direct producers, by the forcibly accelerated accumulation and concentration of capital, in short, by the accelerated production of the conditions of the capitalist mode of production. It also makes an enormous difference in the capitalist and industrial exploitation of the nation’s natural productive power. The national character of the Mercantile System is therefore not a mere slogan in the mouths of its spokesmen. Under the pretext of being concerned only with the wealth of the nation and the sources of assistance for the state, they actually declare that the interests of the capitalist class, and enrichment in general, are the final purpose of the state, and proclaim bourgeois society as against the old supernatural state. At the same time, however, they show their awareness that the development of the interests of capital and the capitalist class, of capitalist production, has become the basis of a nation’s power and predominance in modern society.
The Physiocrats were also correct in seeing all production of surplus-value, and thus also every development of capital, as resting on the productivity of agricultural labour as its natural foundation. If men are not even capable of producing more means of subsistence in a working day, and thus in the narrowest sense more agricultural products, than each worker needs for his own reproduction, if the daily expenditure of the worker’s entire labour-power is only sufficient to produce the means of subsistence indispensable for his individual needs, there can be no question of any surplus product or surplus-value at all. A level of productivity of agricultural labour which goes beyond the individual needs of the worker is the basis of all society, and in particular the basis of capitalist production, which releases an ever growing part of society from the direct production of means of subsistence, transforming them, as Steuart says, into ‘free hands’* and making them available for exploitation in other spheres.
But what should we say of the more recent economic writers such as Daire, Passy,† etc. who, in the twilight years of classical economics, when it is actually on its deathbed, repeat the most primitive ideas about the natural conditions of surplus labour and hence surplus-value in general, believing themselves to have said something new and striking about ground-rent, long after this ground-rent has been explained as a particular form and specific portion of surplus-value? It is precisely characteristic of vulgar economics that what in a now superseded stage of development was new, original, profound and justified, it repeats at a time when this is flat, stale and incorrect. It thereby acknowledges that it does not even have an inkling of the problems which classical economics was concerned with. It confuses these with questions that are posed only at a lower standpoint of the development of bourgeois society. It is just the same with its incessant and self-satisfied rumination of the Physiocratic ideas on free trade. These have long since lost any and every theoretical interest, even if they may still be of some practical interest to some state or other.
In a genuine natural economy, where no part of the agricultural product, or only a very small part, is involved in circulation, and this is itself only a relatively insignificant part of that portion of the product that represents the landowner’s revenue – as for example in many ancient Roman latifundia, the villas of Charlemagne’s time, and more or less throughout the Middle Ages (see Vinçard,* Histoire du travail) – the product and surplus product of the great estates by no means consisted simply of the products of agricultural work. It equally included the products of industrial work. The existence of domestic handicrafts and manufacture as an ancillary pursuit to agriculture, which forms the basis, is the condition for the mode of production on which this natural economy is based, in European antiquity and the Middle Ages, as still today in the Indian village communities, where the traditional organization has not yet been destroyed. The capitalist mode of production completely abolishes this connection; a process which can be studied on a large scale particularly during the last third of the eighteenth century in England. People who had grown up in more or less semi-feudal societies, such as Herrenschwand,† for example, still considered this separation of agriculture and manufacture as a foolhardy social venture, an incomprehensibly risky mode of existence, at the end of the eighteenth century. And even in those agricultural economies of ancient times which show most analogy with the capitalist rural economy, Carthage and Rome, the similarity is more with a plantation economy than with the form truly corresponding to the capitalist mode of exploitation.42a A formal analogy, though one which proves to be completely deceptive in all essential points as soon as the capitalist mode of production is understood – even if not for Herr Mommsen, who discovers the capitalist mode of production in every monetary economy43 – such a formal analogy is to be found nowhere in mainland Italy in ancient times, but only perhaps in Sicily, since this served as an agricultural tributary for Rome, its agriculture being essentially designed for export. Here one can find farmers in the modern sense.
An incorrect conception of the nature of rent has been handed down to modern times, a conception based on the fact that rent in kind still survives from the Middle Ages, in complete contradiction to the conditions of the capitalist mode of production, partly in the tithes paid to the Church and partly as a curiosity in old contracts. The impression is thus given that rent arises not from the price of the agricultural product but rather from its quantity, i.e. not from social relations but from the earth itself. We have already shown how, even though surplus-value is expressed in a surplus product, it is not true conversely that any surplus product in the sense of a mere increase in the quantity of the product represents a surplus-value. It can represent a deduction from value. Otherwise the cotton industry would have had to show an enormous surplus-value in 1860, compared with 1840, even though the price of yarn had fallen. Rent may grow enormously as the result of a series of bad harvests, since the price of corn rises, even though this surplus-value is expressed in a smaller amount of dearer wheat. Conversely, a series of good years may lead to a fall in rent because the price falls, even though the lower rent is expressed in a greater amount of cheaper wheat. The first thing to note about rent in kind, then, is that it is simply a tradition handed down from a mode of production which has outlived its day, and surviving, as the ruin of its former existence, while its contradiction to the capitalist mode of production is shown by the way that it disappeared automatically from private contracts and, where legislation could intervene, as with the tithes in England, was forcibly dispensed with as an incongruity.* Secondly, however, where it continued to exist on the basis of the capitalist mode of production, it was nothing more, and could be nothing more, than an expression of money rent in medieval guise. Say that wheat stands at 40s. per qr. Out of this 1 qr, one part must replace the wages contained in it and be sold so as to advance these again; another part must be sold in order to pay the part due as taxes. Seed corn and a proportion of fertilizer are themselves involved in reproduction as commodities, wherever the capitalist mode of production and the division of social labour associated with it are developed, and so replacement for these must be bought; a further part of the quarter must be sold to supply money for these. In as much as they do not actually have to be bought as commodities, but are taken from the product in kind, to go once more into its reproduction as conditions of production – which happens not only in agriculture, but also in many branches of production that produce constant capital – they are put down on the books in money of account, and are deducted as components of the cost price. The wear and tear of machinery and fixed capital in general must be replaced in money. Finally there is the profit, which is reckoned on the sum of those expenses that are expressed in real money or in money of account. This profit is represented by a particular part of the gross product, determined by its price. The part that then remains forms the rent. If the contractual product-rent is greater than this residue as determined by the price, it does not form rent but is a deduction from profit. Simply by virtue of this possibility, product-rent is an antiquated and obsolete form, as it does not follow the price of the product and can therefore come to more or less than the actual rent, involving not only a deduction from profit, but also from components required to replace the capital. This product-rent, in fact, as far as it is rent not simply in name but in actual fact, is determined exclusively by the excess of the price of the product over its cost of production. It simply takes this variable magnitude as a constant one. But it is such a homely idea that the product first suffices in kind to feed the workers, then to leave the capitalist farmer more food than he needs, and that the surplus over and above this then forms a natural rent. It would be just the same with a calico producer who manufactures 200,000 yards of cloth. This is not only sufficient to clothe his workers, and to more than clothe his wife, all his offspring and himself, it also leaves him calico to sell and finally to pay a hefty rent in. It is such a simple matter! We deduct the production costs of the 200,000 yards, and a surplus of calico must remain over as rent. But what a naive idea it is to deduct production costs of, say, £10,000 from the 200,000 yards, without knowing the sale price of calico; to deduct money from calico, an exchange-value from a use-value, and then to determine the surplus yards of calico over pounds sterling. It is worse than squaring the circle, which is at least based on the concept of limits in which line and curve come together. But this is M. Passy’s recipe. We deduct money from calico before the calico is transformed into money, either logically or in reality! The surplus is the rent, which however should be treated ‘naturally’ (see for example Karl Arndt),* and not with diabolical ‘sophistries’. It is foolishness such as this, the deduction of the production price from so and so many bushels of wheat, the subtraction of a sum of money from a cubic measure, that this whole restoration of natural rent comes down to.
If we consider ground-rent in its simplest form, as labour rent, where the direct producer devotes one part of the week, with tools that belong to him either legally or in practice (plough, draught animals, etc.), to land that is in practice his own, and works the other days of the week for the landlord on his estate without reward, then the situation here is still completely clear: rent and surplus-value are identical. Rent and not profit is the form in which the unpaid surplus labour is expressed. The extent to which the worker (a ‘self-sustaining serf’) can obtain a surplus over what we would call wages in the capitalist mode of production depends, other things being equal, on the proportion in which his working time is divided between labour-time for himself and statute-labour for the landlord. This surplus over and above the necessary means of subsistence, the nucleus of what appears as profit in the capitalist mode of production, is thus entirely determined by the level of ground-rent, which here not only is, but actually appears as, directly unpaid surplus labour: unpaid surplus labour for the ‘proprietor’ of the conditions of production, which here coincide with the land itself, or, in as much as they are distinct from it, are still held to be its accessory. That the serf’s product must be sufficient in this case to replace his conditions of labour as well as his subsistence is a condition that remains the same in all modes of production, since it is not the result of this specific form but a natural condition of all continuing and reproductive labour in general, of any continuing production, which is always also reproduction, i.e. also reproduction of its own conditions of operation. It is clear, too, that in all forms where the actual worker himself remains the ‘possessor’ of the means of production and the conditions of labour needed for the production of his own means of subsistence, the property relationship must appear at the same time as a direct relationship of domination and servitude, and the direct producer therefore as an unfree person – an unfreedom which may undergo a progressive attenuation from serfdom with statute-labour down to a mere tribute obligation. The direct producer in this case is by our assumption in possession of his own means of production, the objective conditions of labour needed for the realization of his labour and the production of his means, of subsistence; he pursues his agriculture independently, as well as the rural-domestic industry associated with it. This independence is not abolished when, as in India for example, these small peasants form a more or less natural community, since what is at issue here is independence vis-à-vis the nominal landlord. Under these conditions, the surplus labour for the nominal landowner can only be extorted from them by extra-economic compulsion, whatever the form this might assume.44 This differs from the slave or plantation economy in that the slave works with conditions of production that do not belong to him, and does not work independently. Relations of personal dependence are therefore necessary, in other words personal unfreedom, to whatever degree, and being chained to the land as its accessory – bondage in the true sense. If there are no private landowners but it is the state, as in Asia, which confronts them directly as simultaneously landowner and sovereign, rent and tax coincide, or rather there does not exist any tax distinct from this form of ground-rent. Under these conditions, the relationship of dependence does not need to possess any stronger form, either politically or economically, than that which is common to all subjection to this state. Here the state is the supreme landlord. Sovereignty here is landed property concentrated on a national scale. But for this very reason there is no private landed property, though there is both private and communal possession and usufruct of the land.
The specific economic form in which unpaid surplus labour is pumped out of the direct producers determines the relationship of domination and servitude, as this grows directly out of production itself and reacts back on it in turn as a determinant. On this is based the entire configuration of the economic community arising from the actual relations of production, and hence also its specific political form. It is in each case the direct relationship of the owners of the conditions of production to the immediate producers – a relationship whose particular form naturally corresponds always to a certain level of development of the type and manner of labour, and hence to its social productive power – in which we find the innermost secret, the hidden basis of the entire social edifice, and hence also the political form of the relationship of sovereignty and dependence, in short, the specific form of state in each case. This does not prevent the same economic basis – the same in its major conditions – from displaying endless variations and gradations in its appearance, as the result of innumerable different empirical circumstances, natural conditions, racial relations, historical influences acting from outside, etc., and these can only be understood by analysing these empirically given conditions.
As far as labour rent goes, the most simple and primitive form of rent, this much is clear. Here rent is the original form of surplus-value and coincides with it. But it needs no further analysis here that surplus-value coincides with the unpaid labour of others, since this still exists in its visible, palpable form, the labour of the direct producer for himself being still separate both in time and space from his work for the landlord, with the latter appearing directly in the brutal form of forced labour for a third party. Likewise, the ‘property’ the land has of yielding a rent is reduced here to a palpably open secret, for the same nature that delivers rent also includes the human labour-power that is chained to the land, and the property relationship that forces its owner to exert and activate this labour-power beyond the degree that would be required to satisfy his own indispensable needs. The rent consists in the direct appropriation of this extra expenditure of labour-power by the landowner; for the direct producer does not pay any further rent on top of this. In this case, where surplus-value and rent are not only identical but the surplus-value still palpably takes the form of surplus labour, the natural conditions or limits of rent are immediately evident, because they are the limits of surplus labour in general. The direct producer must (1) have sufficient labour-power, while (2) the natural conditions of his labour, in the first instance the land to be worked, must be fruitful enough, i.e. the natural productivity of his labour must be great enough, to allow him the possibility of surplus labour over and above the labour needed to satisfy his own indispensable needs. It is not this possibility that creates rent; only the compulsion makes the possibility a reality. The possibility itself however is bound up with subjective and objective natural conditions. Here, too, there is nothing at all mysterious. If labour-power is meagre and the natural conditions of labour scarce, surplus labour is also small, but so too then are both the needs of the producers, the relative number of exploiters of surplus labour, and finally the surplus product in which this relatively unproductive surplus labour is realized for this small number of exploiting proprietors.
Finally, it immediately follows from labour rent that, taking all other factors as constant, it depends entirely on the relative scale of the surplus or forced labour whether and how far the direct producer is capable of improving his own condition, enriching himself, producing a surplus over and above his indispensable means of subsistence, or, to anticipate the capitalist mode of expression, whether and how far he can produce some kind of profit for himself, i.e. a surplus over and above the wage that he also himself produces. Rent here is the normal and so to speak legitimate form of surplus labour, which absorbs everything, and far from being an excess over and above profit – i.e. in this case above some other kind of surplus over wages – not only the size of such a profit, but even its very existence, other factors being constant, depends on the size of the rent, i.e. of the surplus labour that has compulsorily to be performed for the proprietor.
Some historians have expressed their amazement that when the direct producer is not a proprietor but only a possessor, all his surplus labour in fact belonging de jure to the landowner, it is still possible for this villein or serf to develop independent means of his own and even become quite wealthy. It is evident, however, that in the aboriginal and undeveloped conditions on which this social relation of production and the mode of production corresponding to it are based, tradition must play a predominant role. It is also evident here as always that it is in the interest of the dominant section of society to sanctify the existing situation as a law and to fix the limits given by custom and tradition as legal ones. Even ignoring any other factors, this happens automatically as soon as the constant reproduction of the basis of the existing situation, the relationship underlying it, assumes a regular and ordered form in the course of time; and this regulation and order is itself an indispensable moment of any mode of production that is to become solidly established and free from mere accident or caprice. It is precisely the form in which it is socially established, and hence the form of its relative emancipation from mere caprice and accident. It can attain this form in stagnant conditions of both the production process and the social relations corresponding to it, simply by reproducing itself repeatedly. Once this process has continued for a certain length of time, it is reinforced as usage and tradition and finally sanctified as an explicit law. Now since the form of this surplus labour, statute-labour, depends on the undeveloped condition of all labour’s social productive powers, on the crudity of the mode of labour itself, it is natural for only a far smaller aliquot part of the direct producers’ total labour to be confiscated from them than in more developed modes of production, and in the capitalist mode of production in particular. Let us assume for example that the statute-labour for the landlord was originally two days per week. These two weekly days of statute-labour thus persist as a constant quantity regulated by customary or written law. But the productivity of the remaining days that the direct producer has at his disposal is a variable quantity, which must develop as he progresses in experience, just as the new needs with which he becomes familiar, the expansion of the market for his product, and the growing security with which he disposes of this portion of his labour-power will spur him to increased exertion of it. It should not be forgotten in this connection that the use of this labour-power is in no way confined to agriculture but also includes rural domestic industry. This gives the possibility of a certain economic development, dependent of course on favourable conditions, innate racial character, etc.
The transformation of labour rent into rent in kind in no way changes the nature of ground-rent, economically speaking. This consists, in the forms we are dealing with here, in the fact that ground-rent is the only dominant and normal form of surplus-value or surplus labour; which is expressed in turn in its being the only surplus labour or surplus product which the direct producer who finds himself in possession of the conditions of labour needed for his own reproduction has to provide for the owner of the one condition of labour that includes everything else at this stage, the land; while on the other hand it is only the land that confronts him as the property of another, a condition of labour that has become independent of him and is personified in the landowner. But when rent in kind is the dominant and furthest developed form of ground-rent, it is always still more or less accompanied by survivals of the earlier form, i.e. rent to be paid directly in labour, statute-labour, and this is irrespective of whether the landlord is a private individual or the state. Rent in kind presupposes a higher cultural level on the part of the immediate producer, i.e. a higher stage of development of his labour and of society in general; and it distinguishes itself from the preceding form by the fact that surplus labour is no longer performed in its natural form, i.e. no longer under the direct supervision and compulsion of the landlord or his representative. Rather, the immediate producer, driven on by force of circumstances instead of direct compulsion and by legal stipulation instead of by the whip, is himself responsible for performing this surplus labour. Surplus production in the sense of production over and above the indispensable needs of the immediate producer has here already become the self-evident rule, and surplus production in a field of production that actually belongs to him, the land he himself exploits, instead of on the lord’s estate alongside and outside his own. In this relationship, the immediate producer has the use of more or less his entire labour-time, even if one part of this labour-time, originally it would seem the whole surplus part, still belongs for free to the landowner; it is simply that the latter receives this no longer directly, in its own natural form, but rather in the natural form of the product in which it is realized. When rent in kind is established in its pure form, the burdensome and more or less constant interruption of labour for the landowner which characterizes statute-labour (cf. Volume 1, Chapter 10, 2, ‘Manufacturer and Boyar’) disappears, or is at least reduced to a few brief intervals in the year in cases where certain statutory obligations persist alongside rent in kind. The work of the producer for himself and his work for the land-owner are no longer palpably separate in time and space. This rent in kind, in its pure form, even though relics of it may be handed down to more developed modes and relations of production, still presupposes a natural economy, i.e. it presupposes that the economic conditions are produced entirely or at least in the main by the economic unit itself, being directly replaced and reproduced out of its gross product. It also presupposes the union of rural domestic industry and agriculture; the surplus product which forms rent is the product of this combined agricultural-industrial family labour, whether the rent in kind includes a greater or lesser amount of industrial products, as was frequently the case in the Middle Ages, or whether it is paid simply in the form of agricultural products proper. In this form of rent, the rent in kind in which surplus labour is expressed need in no way take up the entire excess labour of the rural family. The producer has a greater room to manoeuvre, compared with labour rent, to gain time for excess labour whose product belongs to himself, just like the product of that labour that satisfies his most indispensable needs. In this form, too, greater differences arise in the economic condition of individual immediate producers. There is at least the possibility of this, and the possibility for the immediate producer to obtain the means whereby he may exploit the labour of others. Yet this does not affect our discussion of the pure form of rent in kind, as we cannot embark here on the endlessly varied combinations in which the different forms of rent may be combined, mixed together and amalgamated. The form of rent in kind, bound up with a particular type of product and of production itself; the connection indispensable to it between agriculture and domestic industry; the almost total self-sufficiency that the peasant family thereby obtains, its independence from the market and from the movement of production and of the history of that part of society outside itself; in brief, the character of natural economy in general – makes this form eminently suitable as the basis of those static conditions of society that we can see in Asia for example. Here, as in the earlier form of labour rent, ground-rent is the normal form of surplus-value, and therefore of surplus labour, i.e. of the entire excess labour that the immediate producer must perform for nothing, in actual fact therefore compulsorily, for the owner of his most essential condition of labour, the land – even if this compulsion no longer confronts him in its previous brutal form. Profit, if we incorrectly give this name in anticipation to that fraction of the excess of his labour over and above the necessary labour which he appropriates for himself, so little determines rent in kind that it rather grows up behind its back, meeting a natural limit in the level of the rent in kind. This latter may be such as seriously to endanger the reproduction of the conditions of labour, the means of production themselves, making the expansion of production more or less impossible and reducing the direct producers to the physical minimum of means of subsistence. This is particularly the case when this form is found in existence and exploited by a conquering trading nation, as by the British in India, for example.
By money rent, in this connection, we mean not the industrial or commercial ground-rent based on the capitalist mode of production, which is simply an excess over the average profit, but the ground-rent that arises simply from a formal transformation of the rent in kind, as this was itself simply transformed labour rent. Instead of the product itself, the immediate producer now has to pay his landowner (whether the state or a private person) the price of this. An excess product in its natural form is no longer sufficient; it has to be transformed from this natural form into the money form. Even though the direct producer still continues to produce at least the greater part of his means of subsistence himself, a portion of his product must now be transformed into a commodity and be produced as such. The character of the entire mode of production is thus more or less changed. It loses its independence, its separation from any social context. What now becomes decisive is the proportion of production costs, which now include greater or lesser expenditures in money; or at least the excess of the part of the gross product to be transformed into money over and above the part that must serve on the one hand again as means of reproduction, on the other hand as immediate means of subsistence. The basis of this type of rent, however, though it is now approaching its dissolution, remains the same as for the rent in kind that forms its starting-point. The direct producer is still the hereditary or otherwise traditional possessor of the land, who has to provide for the landlord, as proprietor of this most essential condition of production, an excess and compulsory labour, i.e. unpaid labour provided without an equivalent in the form of the surplus product transformed into money. Property in those conditions of labour distinct from the land, such as agricultural equipment and other movables, is already transformed in the earlier forms into the property of the direct producers, first of all simply in practice but later also in law, and this is still more of a premise for the form of money rent. The transformation of rent in kind into money rent that takes place at first sporadically, then on a more or less national scale, presupposes an already more significant development of trade, urban industry, commodity production in general and therefore monetary circulation. It also presupposes that products have a market price and are sold more or less approximately at their values, which in the earlier forms need in no way be the case. In Eastern Europe, we can still see something of this transition going on today. How little it can be accomplished without a certain development of labour’s social productive power is attested to by various failed attempts under the Roman Empire to make this transformation, followed by regression to rent in kind, after which the attempt was made to transform into money rent at least the part of this rent existing as a state tax. The same difficulty of transition was shown for example in pre-revolutionary France by the amalgamation and adulteration of money rent with residues of its earlier forms.
But money rent as a transformed and contrasting form of rent in kind is the final form of the type of ground-rent we have been considering here, while at the same time the form of its dissolution, i.e. of ground-rent as the normal form of surplus-value and the unpaid surplus labour to be performed for the owner of the conditions of production. In its pure form, this rent, just like labour rent and rent in kind, does not represent any excess over and above profit. In its concept, it includes profit. In as much as profit arises alongside it as a particular part of surplus labour, the money rent, like rent in its earlier forms, is still the normal limit to this embryonic profit, which can develop only in proportion to the possibility of exploiting that labour, whether a person’s own excess labour or that of others, which remains after the surplus labour expressed in money rent has been paid. If a profit really does arise alongside the rent, it is not the profit that sets a limit to rent, but inversely rent which sets a limit to profit. As we have already said, however, money rent is at the same time the form of dissolution of the ground-rent we have so far been dealing with here, which coincides prima facie with surplus value and surplus labour – ground-rent as the normal and dominant form of surplus-value.
In its further development, money rent must lead – leaving aside all intermediate forms, such as that of the small peasant farmer – either to the transformation of the land into free peasant property or to the form of the capitalist mode of production, rent paid by the capitalist farmer.
With money rent, the traditional relationship fixed by customary law between the landowner and his dependant, who possesses and works one part of the land, is necessarily transformed into a contractual relationship, a purely monetary relationship determined by the firm rules of positive law. The tiller with possession is essentially transformed into a mere tenant. On the one hand this transformation is utilized, where general conditions of production are suitable, for the gradual expropriation of the old peasant possessor and the installation in his place of a capitalist farmer; on the other hand it allows the former possessor to buy himself out of his rent obligation and leads to his transformation into an independent peasant-farmer, with full ownership in the land he tills. The transformation of rent in kind into money rent, more-over, is not only necessarily accompanied, but even anticipated, by the formation of a class of non-possessing day-labourers, who hire themselves out for money. During the period of its rise, when this new class still appears only sporadically, the custom necessarily develops, among the better-off rent-paying peasants, of exploiting agricultural wage-labourers on their own account, just as in the feudal period the wealthier peasant serfs already kept serfs of their own. In this way it gradually becomes possible for them to build up a certain degree of wealth and transform themselves into future capitalists. Among the old possessors of the land, working for themselves, there arises a seed-bed for the nurturing of capitalist farmers, whose development is conditioned by the development of capitalist production, not just in the countryside but in general, and who advance particularly rapidly when, as in England in the sixteenth century, they are aided by such particularly favourable conditions as the progressive devaluation of money at that time, which, given the traditionally long terms of tenancy contracts, enriched them at the landowners’ expense.
Moreover, once rent takes the form of money rent and the relation between rent-paying peasant and landowner becomes a contractual relation – a transformation which is only possible given a certain relative level of development of the world market, trade and manufacture – land inevitably starts to be leased to capitalists, who were formerly outside rural limits and who now transfer to the land, and to the rural economy, capital that has been obtained in the town, together with the capitalist mode of operation which has also been developed there: the production of the product as a mere commodity and a mere means of appropriating surplus-value. As a general rule, this form can come about only in those countries that dominate the world market during the transition period from the feudal to the capitalist mode of production. With the intervention of the capitalist farmer between the landowner and the actual working tiller, all relationships that arose from the former rural mode of production are torn asunder. The farmer becomes the real controller of these agricultural workers and the real exploiter of their surplus labour, while the landowner stands in a direct relationship only to this capitalist farmer, and a mere monetary and contractual relationship at that. The nature of rent thereby changes, not only as a matter of fact and accidentally, which happened in places already under the previous forms, but rather normally, in its acknowledged and dominant form. From the normal form of surplus-value and surplus labour, it declines into the excess of this surplus labour over and above the part of it that is appropriated by the exploiting capitalist in the form of profit; the entire surplus labour, both profit and the excess over profit, is now directly extracted by him, received in the form of the total surplus profit and turned into money. It is now only an excess part of this surplus-value which he extracts by virtue of his capital, by the direct exploitation of the agricultural worker, that he hands over to the landowner as rent. How much or how little he parts with in this way is determined on average, as a limit, by the average profit that capital yields in the non-agricultural spheres of production and by the non-agricultural price of production that this governs. Rent has now been transformed from the normal form of surplus-value and surplus labour into an excess over the part of surplus labour that is claimed by capital as a matter of course and normally – an excess peculiar to one particular sphere of production, the agricultural. Instead of rent, the normal form of surplus-value is now profit, and rent now counts as an independent form only under special conditions, not a form of surplus-value in general but of a particular off-shoot of this, surplus profit. It is unnecessary to go into any further detail as to how this transformation corresponds to a gradual transformation in the mode of production itself. This already results from the fact that it is now normal for this capitalist farmer to produce the agricultural product as a commodity, and that while formerly only the excess over his means of subsistence was transformed into a commodity, now a relatively minute part of these commodities is directly transformed into his own means of subsistence. It is no longer land, but capital, that has now directly subsumed even agricultural labour under itself and its productivity.
The average profit and the price of production governed by it are formed outside the rural situation, in the orbit of urban trade and manufacture. The profit of the rent-paying peasant does not enter into this equalization process, for his relationship to the landowner is not a capitalist one. In so far as he makes a profit, realizing an excess over and above his necessary means of subsistence, whether by his own labour or by exploiting the labour of others, this happens behind the back of the normal relationship; other factors being equal, it is not the level of this profit that determines the rent, but this profit is conversely determined by the rent as its limit. The high rate of profit in the Middle Ages was not due simply to the low composition of capital, with the variable element laid out on wages being predominant. It was a result of the fraud committed against the countryside, the appropriation of a part of the landowner’s rent and the income of his dependants. If the countryside exploited the town politically in the Middle Ages, wherever feudalism was not broken through by exceptional urban development as in Italy, then the town everywhere and without exception exploited the countryside economically through its monopoly prices, its taxation system, its guilds, its direct commercial trickery and its usury.
One might imagine that the very entry of the capitalist farmer into agricultural production would already provide proof that the price of agricultural products, which had always paid a rent in some form or other, would have to stand above the production price of manufactured goods, at least at the time of this entry; either reaching the level of a monopoly price, or having risen to the value of the agricultural products, which actually does stand above the price of production governed by the average profit. For if this were not so, the capitalist farmer, given the prevailing prices for agricultural products, could not possibly first realize the average profit from the price of these products and then pay out of this same price a further excess above this profit in the form of rent. One might conclude from this that the general rate of profit guiding the capitalist farmer in his contract with the landowner was formed without taking rent into account, and that as soon as this general rate comes to govern rural production it thus finds this excess and pays it to the landowner. It is in this traditional manner that Mr Rodbertus explains things, for example.* However:
Firstly. This entry of capital into agriculture as an independent and leading power does not take place everywhere all at once, but rather gradually and in particular branches of production. At first it does not take hold of agriculture proper, but rather branches of production such as stock-raising and particularly sheep-farming, whose main product, wool, offers at first a market price permanently in excess of its price of production, in conditions of the rise of industry; this is not equalized until later on. That was the case in England during the sixteenth century.
Secondly. Since capitalist production sets in only sporadically at first, it can in no way be held against the assumption made here that it first of all takes hold of those farms which generally can pay a differential rent, as a result of their special fertility or particularly favourable location.
Thirdly. Even assuming that the prices of agricultural products do stand above their prices of production when this mode of production gets under way, which in fact presupposes an increasing weight of urban demand, as was undoubtedly the case in England in the latter third of the seventeenth century, it is still the case that once the new mode of production has extended beyond the mere subsumption of agriculture under capital and the improvement in agriculture necessarily bound up with this development, and a reduction in production costs has set in, this will be balanced by a reaction, a fall in the price of agricultural products, as was the case in England in the first half of the eighteenth century.
Thus rent as an excess above the average profit cannot be explained in this traditional way. Whatever the historical conditions under which it may first arise, once it has struck root rent can occur only under the modern conditions previously developed.
We should finally note in connection with the transformation of rent in kind into money rent that the capitalized rent, the price of land, and therefore its alienability and actual alienation, now becomes an important aspect; and that not only can the former rent-payer transform himself in this way into an independent peasant proprietor, but also urban and other holders of money can buy plots of land with a view to leasing them either to peasants or to capitalists, and enjoy the rent on their capital thus invested as a form of interest. This factor, too, helps to promote the transformation of the former mode of exploitation, of the relationship between owner and actual tiller, and of rent itself.
We have now reached the final point in our development of ground-rent through its different stages.
In all these forms of ground-rent – labour rent, rent in kind and money rent (as simply a transformed form of rent in kind) – the rent-payer is always taken as the actual tiller and possessor of the land, whose unpaid surplus labour goes directly to the landowner. Even in the last form, money rent – in so far as this is pure, i.e. simply the transformed form of rent in kind – this is not only a possible case, it is so in actual fact.
As a transitional form from the original form of rent to capitalist rent, we can take the system of share-cropping, where the tenant farmer provides, besides his labour (his own or others’), a part of the operating capital, the landowner providing not only the land but also a further portion of capital (e.g. livestock), and the product being divided between share-cropper and landowner in definite proportions, which vary between different countries. The farmer, here, has insufficient capital for full capitalist cultivation. The share that the landowner draws, on the other hand, does not have the pure form of rent. It may include interest on the capital he advances, and a surplus rent on top of this. It may absorb the entire surplus labour of the farmer, or leave him a greater or smaller share of this. The essential thing, however, is that rent here no longer appears as the normal form of surplus-value. On the one hand, the share-cropper, whether he applies his own labour or that of others, has a claim to a share of the product not in his capacity as worker but as owner of a part of his tools, as his own capitalist. On the other hand the landowner claims his share not exclusively on the basis of his ownership of the land but also as the lender of capital.44a
In Poland and Romania, for example, a residue from the old system of common property in the land, which has remained after the transition to an independent peasant economy, has served as a pretext for effecting a transition to the lower forms of ground-rent. One part of the land belongs to the individual peasants and is tilled by them independently. Another part is tilled in common and forms a surplus product, serving partly to meet the communal expenses and partly as a reserve in case of harvest failure, etc. The two latter parts of the surplus product, and ultimately the whole surplus product together with the land on which it grows, are gradually usurped by state officials and private individuals, and the originally free peasant proprietor, whose obligation to take part in the common tilling of this land is maintained, is transformed into a statute-labourer or a payer of rent in kind, while those who have usurped the common land transform themselves into landed proprietors, not only of the usurped common land but of the peasant lands as well:
We do not need to go into any further detail here as regards the slave economy (which also passes through a number of gradations from patriarchal slavery predominantly for home use to the plantation system, working for the world market) nor the system in which the landowner cultivates for his own account, possessing all the instruments of production and exploiting labour, whether free or unfree, by deliveries in kind or services paid in money. Here the landowner coincides with the owner of the instruments of production, i.e. with the direct exploiter of workers who are numbered among these elements of production. Rent and profit coincide too – there is no separation of the various forms of surplus-value. The entire surplus labour of the workers, which is expressed here in surplus product, is extracted from them directly by the proprietor of all the instruments of production, which count among them also the land, and in the original form of slavery even the direct producers themselves. Where the capitalist conception prevails, as on the American plantations, this entire surplus-value is conceived as profit; where the capitalist mode of production does not exist itself, and the mode of conception corresponding to it is not transferred from capitalist countries, it appears as rent. In neither case does this form offer any difficulty. The landowner’s income, the available surplus product he appropriates, whatever name it might be given, is here the normal and prevailing form in which the entire unpaid surplus labour is directly appropriated, and landed property forms the basis for this appropriation.
Small-scale peasant ownership. Here the peasant is the free proprietor of his land, which appears as his main instrument of production, as the indispensable field of employment for his labour and his capital. No lease-price is paid in this form; thus rent does not appear as a separate form of surplus-value, even if, in countries where the capitalist mode of production is otherwise developed, it does present itself as surplus profit by comparison with other branches of production, though as surplus profit which falls to the peasant, as does the entire product of his labour.
Like the earlier forms, this form of landownership presupposes that the agricultural population has a great numerical preponderance over the urban population, i.e. that even if the capitalist mode of production is dominant it is relatively little developed, so that the concentration of capitals is also confined to narrow limits in the other branches of production, and a fragmentation of capital prevails. By the nature of the case, a predominant part of the agricultural product must be consumed here by its producers, the peasants, as direct means of subsistence, with only the excess over and above this going into trade with the towns as a commodity. No matter how the average market price of agricultural products is governed here, there must evidently be a differential rent, an excess portion of commodity price, for the better or better-located lands, just as there is in the capitalist mode of production. It is simply that the peasant whose labour is realized under more favourable natural conditions pockets this himself. In this form, the land price makes up an element of the peasant’s production costs, since, as things develop further, either the price of land is computed at a certain money value in dividing up an inheritance, or, as a holding or its component parts changes hands the land is actually bought by the peasant himself, often by raising the money on mortgage. Where the price of land, which is nothing but capitalized rent, is an element assumed in advance, and the rent seems to exist independently of any differentiation in the land’s fertility and location – precisely here, in this form, it is to be assumed in the average case that there is no absolute rent, i.e. that the worst soil does not pay any rent; for absolute rent assumes either a realized excess value of the product above its price of production or an excess monopoly price for the product above its value. But since the rural economy here is largely one of agriculture for immediate subsistence, with the land being an indispensable field of occupation for the labour and capital of the majority of the population, the governing market price of the product only reaches its value under extraordinary conditions; this value, however, will stand as a rule above the price of production, on account of the preponderant element of living labour, even though the excess of the value above the price of production will be limited again by the low composition also of non-agricultural capital in countries where a smallholding economy prevails. The smallholding peasant’s exploitation is not limited by the average profit on capital, in as much as he is a small capitalist; nor by the need for a rent, in as much as he is a landowner. The only absolute barrier he faces as a petty capitalist is the wage that he pays himself, after deducting his actual expenses. He cultivates his land as long as the price of the product is sufficient for him to cover this wage; and he often does so down to a physical minimum. In so far as he is a landowner, he does not face any property barrier, since this can present itself only in opposition to a capital (including labour) separate from it, by imposing an obstacle to its application. The interest on the price of land is a barrier, however, as it generally has to be paid over to a third party, the mortgagee. But this interest can precisely be paid out of the part of the surplus labour that under capitalist conditions would form the profit. The rent anticipated in the price of land and the interest paid on it, therefore, can be no more than a part of the capitalized surplus labour of the peasant over and above the labour indispensable for his own subsistence, but this surplus labour does not have to be realized in a portion of commodity value equal to the entire surplus profit, and still less in an excess above the surplus labour realized in the average profit, i.e. a surplus profit. The rent may be a deduction from the average profit or even the only part of this that is realized. In order for the peasant smallholder to cultivate his land or to buy land to cultivate, therefore, it is not necessary, as in the normal capitalist mode of production, for the market price of the agricultural product to rise high enough to yield him the average profit, and still less an excess over and above this average profit that is fixed in the form of rent. Thus it is not necessary for the market price to rise either to the value of his product or to its price of production. This is one of the reasons why the price of corn in countries where small-scale ownership predominates is lower than in countries of the capitalist mode of production. A portion of the surplus labour performed by those peasants working under the least favourable conditions is presented to society for nothing and does not contribute towards governing the price of production or forming value. This lower price of corn in countries of small-scale ownership is a result of the poverty of the producers and in no way of the productivity of their labour.
This form of free smallholding ownership by peasants who farm their land themselves, as the dominant, normal form, constitutes the economic basis of society in the best periods of classical antiquity, while we find it among modern peoples as one of the forms that arise out of the dissolution of feudal landed property. Examples are the yeomanry in England, the peasant estate in Sweden and the peasants of France and western Germany. We are not referring here to the colonies, since there the independent peasant farmer develops under different conditions.
The free ownership of the peasant who farms his land himself is evidently the most normal form of landed property for small-scale cultivation, i.e. for a mode of production in which possession of the land is a condition for the worker’s ownership over the product of his own labour, and in which, whether he is free or a dependent proprietor, the tiller always has to produce his means of subsistence himself, independently, as an isolated worker with his family. Ownership of land is just as necessary for the full development of this activity as is ownership of the instrument of labour for the free development of the handicraftsman’s trade. It forms here the basis for the development of personal independence. It is a necessary transition point in the development of agriculture itself. The causes of its decline show its limitations. These are: the destruction of rural domestic industry, its normal complement, by the development of large-scale industry; the gradual impoverishment and exhaustion of the soil which has been subjected to this form of cultivation; the usurpation of communal property by large landowners, this communal property always forming a second complement to the smallholding economy and being the only thing which makes possible the upkeep of livestock; the competition of large-scale agriculture, whether in the form of plantations or the capitalist form. Improvements in agriculture also contribute to this, by leading to a fall in the prices of agricultural products, while also requiring greater expenditures and more abundant objective conditions of production, as in England in the first half of the eighteenth century.
The agricultural smallholding, by its very nature, rules out the development of the productive powers of social labour, the social concentration of capitals, stock-raising on a large scale or the progressive application of science.
Usury and taxation must always impoverish it. The outlay of capital in the price of land withdraws this capital from agriculture. Incessant fragmentation of means of production and isolation of the producers themselves. Tremendous wastage of human labour. The progressive deterioration of the conditions of production and the increase in price of the means of production is a necessary law of small-scale landowning. The disastrous effect of good seasons for this mode of production.45
One particular evil of small-scale agriculture, where this is combined with the free ownership of land, arises from the way the tiller lays out capital in purchasing land. (The same applies to the transitional form in which the owner of a large estate lays out capital first to buy land and then again to cultivate it himself as his own farmer.) Given the mobile character land acquires as a mere commodity, changes in possession multiply,46 so that with each new generation, and each division of an inheritance, the land forms a new capital investment, i.e. from the peasant’s standpoint it becomes land that he has bought. The price of land here forms a predominant element of overhead costs, or the cost price of the product for the individual producer.
The price of land is nothing but the capitalized and thus anticipated rent. If agriculture is pursued on a capitalist basis, so that the landowner simply receives the annual rent and the farmer pays nothing for the land besides this, it is obvious that the capital which the landowner himself invests in purchasing land, though for him it is an interest-bearing capital investment, has nothing at all to do with the capital invested in agriculture itself. It forms part neither of the fixed capital functioning here nor of the circulating capital;47 it procures a title for the purchaser to receive the annual rent, but it has absolutely nothing to do with the production of this rent. The buyer of the land simply hands the capital over to the person selling it, and the seller thereby renounces his property in the land. Thus this capital no longer exists as the capital of the buyer; he no longer has it; it is in no way part of the capital he can invest in the land itself. Whether he has bought the land dearly or cheap, or even got it for nothing, in no way affects the capital that the farmer invests in his enterprise and in no way affects the rent; the only difference it makes is whether this rent appears to him as interest or not, or as a higher interest or a lower.
Take the case of the slave economy, for example. The price that is paid here for the slave is no more than the anticipated and capitalized surplus-value or profit that is to be extracted from him. But the capital paid in purchasing the slave does not form part of the capital by which profit, surplus labour, is extracted from him. On the contrary. It is capital which the slaveowner has alienated, a deduction from the capital which he has at his disposal in actual production. It has ceased to exist for him, just as the capital invested in the purchase of land has ceased to exist for agriculture. The best proof of this is that it comes into renewed existence for the slaveowner or landowner only when he sells the slave or land again. But then the same relationship is set up for the buyer. The fact that he has bought the slave does not enable him immediately to exploit him. He is only able to do this by putting further capital into the slave economy itself.
The same capital does not exist twice over, first in the hands of the seller of the land and then in the hands of its buyer. It passes from the buyer to the seller, and that is the end of it. The buyer now has no capital, but a piece of land instead. The fact that the rent obtained from the actual investment of capital on this piece of land is now reckoned by the new landowner as interest on capital that he has not invested on the land but has parted with in order to obtain it, does not change the economic nature of the land factor in the slightest, any more than the fact that someone has paid £1,000 for 3 per cent Consols has anything to do with the capital from whose revenue the interest on the national debt is paid.
In actual fact, what is paid over in the purchase of land, just like the money spent on the purchase of government bonds, is only capital in itself, just as any sum of value is potential capital on the basis of the capitalist mode of production. What was paid for the land, just as for government bonds or any other bought commodities, is a sum of money. This is potential capital, because it can be transformed into capital. It depends on the use made of it by the seller whether the money he receives really is transformed into capital or not. For the buyer, it can no longer function as such, any more than any other money he has definitively spent. It functions in his accounts as interest-bearing capital, since he reckons the income he receives – as rent from the land or as debt interest from the government – as interest on the money that it cost him to purchase the title to this revenue. He can realize it as capital only by reselling it. But then someone else, the new buyer, steps into the same relationship as the former was in before; no change of hands can transform the money spent in this way into actual capital for the spender.
In the case of the peasant smallholding, the illusion is still more strongly reinforced that land has a value of its own and thus goes into the production price of the product as capital, just like a machine or raw material. But we have seen how there are only two cases in which rent and hence capitalized rent, the price of land, can go into the price of the agricultural product as a determining factor. Firstly, if the value of the agricultural product stands above its price of production, as a result of the composition of agricultural capital – a capital which has nothing in common with capital laid out on the purchase of land – and market conditions enable the landowner to valorize this difference. Secondly, if there is a monopoly price. And these conditions obtain least of all in the case of the smallholding and petty landownership, since it is precisely here that production is designed to a very major extent to satisfy the producer’s own needs, and proceeds without being governed by the general rate of profit. Even where smallholding economy is pursued on leased farms, the lease-price includes far more than under any other conditions a part of the profit, and even a deduction from wages; it is then only nominally rent, not rent as an independent category vis-à-vis wages and profit.
Thus the expenditure of money capital on the purchase of land is not an investment of agricultural capital. It proportionately reduces the capital which the small peasants have at their disposal in their actual sphere of production. It proportionately reduces the scale of their means of production and hence narrows the economic basis of reproduction. It subjects the small peasant to usury, since in this sphere there is always less credit proper. It is a constraint on agriculture, even when the purchase of large estates is involved. It actually contradicts the capitalist mode of production, for which the indebtedness of the landowner, whether his estate is inherited or bought, is on the whole immaterial. Whether he pockets the rent himself or has to pay it over to a mortgagee in no way affects, the cultivation of the property leased.
We have seen how, once the ground-rent is given, the price of land is governed by the rate of interest. If this is low, the price of land is high, and vice versa. In normal conditions, therefore, a high price of land and a low rate of interest go together, so that if the peasant has to pay a high price for land when the interest rate is low, the same low rate of interest will also procure him his operating capital at favourable terms of credit. In actual fact, though, things are different when smallholding predominates. Firstly, the general laws of credit do not apply to the peasants, since they presuppose that the producers are capitalists. Secondly, where smallholding predominates (we are not referring here to colonies) and the smallholding peasant forms the backbone of the nation, the formation of capital, and thus social reproduction, is relatively weak, and still weaker is the formation of money capital for loan in the sense previously developed. This assumes the concentration and existence of a class of rich idle capitalists (Massie).* Thirdly, where landownership forms a condition of life for the greater part of the producers, as it does here, and an indispensable field of investment for their capital, the price of land will rise independently of the rate of interest and often in inverse proportion to it, because the demand for landed property will outweigh the supply. Being sold in this case in parcelled lots, the land fetches a far higher price than when sold in large estates, since the number of small buyers is large and the number of large buyers small (bandes noires, Rubichon; Newman),† All these reasons lead to a rise in the price of land, even at a relatively high rate of interest. The relatively low interest that the peasant draws from the capital he lays out on the purchase of land (Mounier) contrasts with the high and usurious rate he himself has to pay to his mortgagee. The Irish system shows the same thing, simply in a different form.
An element that is foreign to production as such, the price of land, can thus rise here to a level which makes production impossible. (Dombasle.)
If the price of land plays such a role, if the purchase and sale of land, the circulation of land as a commodity, develops to this extent, this is the practical result of the development of the capitalist mode of production, in as much as here the commodity becomes the general form of every product and of all instruments of production. On the other hand, this takes place only where the capitalist mode of production is developed only to a limited extent and does not yet display all its characteristic features; because it precisely depends on a situation where agriculture is no longer – or not yet – subjected to the capitalist mode of production, but is rather subjected to a mode of production taken over from forms of society that have disappeared. The disadvantages of the capitalist mode of production, with its dependence of the producer on the money price of his product, are thus combined here with the disadvantages that arise from its incomplete development. The peasant becomes a merchant and industrialist without the conditions in which he is able to produce his product as a commodity.
The conflict between the price of land as an element of the cost price for the producer and as a non-element of the price of production for the product (even when rent is a determining factor in the price of the agricultural product, the capitalized rent which is advanced for twenty years or more never is) is just one of the forms expressing the contradiction between the private ownership of land and a rational agriculture, the normal social use of the land. Yet private ownership of land, and thus the expropriation from the land of the direct producers – private ownership for some, involving non-ownership of the land for others – is the basis of the capitalist mode of production.
Here, in the case of small-scale agriculture, the price of land, as a form and result of private property in land, appears as a barrier to production itself. In the case of large-scale agriculture and large-scale landed property resting on the capitalist mode of operation, property similarly appears as a barrier, since it restricts the farmer in the productive investment of capital, which ultimately benefits not him but the landowner. In both forms, instead of a conscious and rational treatment of the land as permanent communal property, as the inalienable condition for the existence and reproduction of the chain of human generations, we have the exploitation and the squandering of the powers of the earth (not to mention the fact that exploitation is made dependent not on the level of social development reached but rather on the accidental and unequal conditions of the individual producers). In the case of small-scale ownership, this results from a lack of the resources and science needed to apply the social productive powers of labour. In the case of large landed property, it results from the exploitation of these resources for the most rapid possible enrichment of the farmer and proprietor. In both cases, from dependence on the market price.
All criticism of small-scale landownership is ultimately reducible to criticism of private property as a barrier and obstacle to agriculture. So too is all counter-criticism of large landed property. Secondary political considerations are of course left aside here in both cases. It is simply that this barrier and obstacle which all private property in land places to agricultural production and the rational treatment, maintenance and improvement of the land itself, develops in various different forms, and in quarrelling over these specific forms of the evil its ultimate root is forgotten.
Small-scale landownership presupposes that the overwhelming majority of the population is agricultural and that isolated labour predominates over social; wealth and the development of reproduction, therefore, both in its material and its intellectual aspects, is ruled out under these circumstances, and with this also the conditions for a rational agriculture. On the other hand, large landed property reduces the agricultural population to an ever decreasing minimum and confronts it with an ever growing industrial population crammed together in large towns; in this way it produces conditions that provoke an irreparable rift in the interdependent process of social metabolism, a metabolism prescribed by the natural laws of life itself. The result of this is a squandering of the vitality of the soil, which is carried by trade far beyond the bounds of a single country. (Liebig.)
If small-scale landownership creates a class of barbarians standing half outside society, combining all the crudity of primitive social forms with all the torments and misery of civilized countries, large landed property undermines labour-power in the final sphere to which its indigenous energy flees, and where it is stored up as a reserve fund for renewing the vital power of the nation, on the land itself. Large-scale industry and industrially pursued large-scale agriculture have the same effect. If they are originally distinguished by the fact that the former lays waste and ruins labour-power and thus the natural power of man, whereas the latter does the same to the natural power of the soil, they link up in the later course of development, since the industrial system applied to agriculture also enervates the workers there, while industry and trade for their part provide agriculture with the means of exhausting the soil.