Capital: A Critique of Political Economy, Vol. III. The Process of Capitalist Production as a Whole

Karl Marx
Marx, Karl
(1818-1883)
CEE
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Editor/Trans.
Frederick Engels, ed. Ernest Untermann, trans.
First Pub. Date
1894
Publisher/Edition
Chicago: Charles H. Kerr and Co.
Pub. Date
1909
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Das Kapital, based on the 1st edition.
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PART VI.
TRANSFORMATION OF SURPLUS PROFIT INTO GROUND-RENT.


Part VI, Chapter XXXVII
PRELIMINARIES.

VI.XXXVII.1

THE analysis of landed property in its various historical forms belongs outside of the limits of this work. We shall occupy ourselves with it in this place only to the extent that a portion of the surplus-value produced by the industrial capital falls into the hands of the land owner. We assume, then, that agriculture is dominated by the capitalist mode of production, just as manufacture is, in other words, that agriculture is carried on by capitalists, who differ primarily from the other capitalists only through the element, in which their capital and the wage-labor set in motion by this capital are invested. So far as we are concerned, the capitalist farmer produces wheat, etc., in the same way that the manufacturer produces yarn or machines. The assumption that the capitalist mode of production has seized agriculture implies that it rules all spheres of production and bourgeois society, so that its prerequisites, such as free competition among capitals, the possibility of transferring them from one sphere of production to another, a uniform level of the average rate of profit, etc., are fully matured. The form of landed property which we consider here is a specifically historical one, a form altered through the influence of capital and of the capitalist mode of production, and evolved either out of feudal land ownership, or out of small peasants' agriculture carried on for a living, in which the possession of land constitutes one of the prerequisites of production for the direct producer, and in which his ownership of land appears as the most advantageous condition for the prosperity of his mode of production. Just as capitalist production is conditioned in a general way on the expropriation of the laborers from their requirements of production, so capitalist agriculture demands the expropriation of the rural laborers from the land and their subordination to a capitalist, who carries on agriculture for the sake of profit. For the results of our analysis the objection, that other forms of landed property and of agriculture have existed or still exist, is quite irrelevant. Such an objection cannot apply to any one else but to those economists, who treat of the capitalist mode of production in agriculture, and of the form of landed property corresponding to it, as though it were not a historical but an eternal category.

VI.XXXVII.2

For our purposes it is necessary to study the modern form of landed property, because it is our business to consider the typical conditions of production and commerce, which arise from the investment of capital in agriculture. Without this our analysis of capital would not be complete. We therefore confine ourselves exclusively to the investment of capital in agriculture strictly so-called, that is, capital invested in the production of the principal plant crop, on which a certain population lives. We may say wheat, because it is the principal article of food among the modern capitalistically developed nations (or mining instead of agriculture, because the laws of both are the same).

VI.XXXVII.3

It is one of the great merits of Adam Smith to have shown that the ground rent for capital invested in the production of such crops as flax, dye stuffs, independent cattle raising, etc., is determined by the ground rent obtained from capital invested in the production of the principal article of subsistence. In fact no progress has been made in this since his time. What we might add in the way of exception or supplement belongs in a separate study of landed property, not here. Hence we shall not speak of landed property outside of the land destined for the production of wheat in the manner of exports, but shall merely refer to it occasionally by way of illustration.

VI.XXXVII.4

For the sake of completeness we shall remark, that we include also water, etc., in the term land, so far as it has an owner and belongs as an accessory to the soil.

VI.XXXVII.5

Landed property is conditioned on the monopolisation of certain portions of the globe by private persons, for the purpose of making these portions the exclusive spheres of their private will and keeping all others away from it.*119 With this in mind, the problem is to ascertain the economic value, that is, the employment of this monopoly on the basis of capitalist production. With the legal power of these persons to use or misuse certain portions of the globe nothing is settled. The use of this power depends wholly upon economic conditions, which are independent of their will. The legal conception itself signifies nothing else but that the land owner may do with the soil what the owner of commodities may do with them. And this conception, this legal conception of free property in land, arises in the ancient world only with the dissolution of the organic order of society, and in the modern world only with the development of capitalist production. Into Asia it has been imported by Europeans in but a few places. In that Part of our work, which deals with primitive accumulation (Volume I, chapter XXVI), we have seen that this mode of production presupposes on the one hand the separation of the direct producers from their position as mere attachments to the soil (in their capacity of bondsmen, serfs, slaves, etc.), on the other hand the expropriation of the mass of the people from the land. To this extent the monopoly of landed property is a historical premise, and remains the basis, of the capitalist mode of production, just as it does of all other modes of production, which rests on the exploitation of the masses in one form or another. But that form of landed property, which the capitalist mode of production meets in its first stages, does not suit its requirements. It creates for itself that form of property in land, which is adapted to its requirements, by subordinating agriculture to the dominion of capital. It transforms feudal landed property, tribal property, small peasants' property in mark communes, whatever may be their legal form, into the economic form corresponding to the requirements of capitalism. It is one of the great outcomes of the capitalist mode of production, that it transforms agriculture from a merely empirical and mechanically perpetuated process of the least developed part of society into a consciously scientific application of agronomics, so far as this is at all feasible under the conditions going with private property;*120 that it detaches property in land on the one side from the relations between master and servant, and on the other hand totally separates land as an instrument of production from property in land and land owners, for whom it represents merely a certain tribute of money, which he collects by force of his monopoly from the industrial capitalist, the capitalist farmer. It dissolves all these connections so thoroughly, that the owner of the land may spend his whole life in Constantinople, while his estates are in Scotland. Private property in land thus receives its purely economic form by discarding all its former political and social trappings and implications, in brief all those traditional accessories, which are denounced as a useless and absurd attachment by the industrial capitalists and their theoretical spokesmen in the heat of their struggle with landed property, as we shall see later. The rationalising of agriculture on the one hand and thus rendering it capable of operation on a social scale, and the reduction ad absurdum of private property in land on the other hand, these are the great merits of the capitalist mode of production. Like all its other historical advances it bought these also by first completely pauperizing the direct producers.

VI.XXXVII.6

Before we pass on to the problem itself, we must make a few more preliminary remarks in order to forestall misunderstanding.

VI.XXXVII.7

The premises for a capitalist production in agriculture are these: The actual tillers of the soil are wage-laborers, employed by a capitalist, the capitalist farmer, who carries on agriculture merely as a special field of exploitation for his capital, an investment of his capital in a special sphere of production. This renting capitalist pays to the land owner, the owner of the soil exploited by him, a sum of money at definite periods fixed by contract, for instance annually (just as the borrower of money-capital pays a fixed interest), for the permission to invest his capital in this particular sphere of production. This sum of money is called ground-rent, no matter whether it is paid for agriculture soil, building lots, mines, fishing grounds, forests, etc. It is paid for the entire time, during which the land owner has rented his land to the capitalist by contract. Ground-rent, therefore, is that form, in which property in land realizes itself economically, that is, produces value. Here, then, we have all three classes together, which constitute the frame work of modern society, and they have divergent interests—wage-laborers, industrial capitalists, land owners.

VI.XXXVII.8

Capital may be fixed in the soil, may be incorporated in it, either in a transient manner, as it is by improvements of a chemical nature, fertilization, etc., or more permanently, as in drainage canals, irrigation works, leveling, farm buildings, etc. In another place I have called the capital thus incorporated in the soil land-capital.*121 It belongs in the categories of fixed capital. The interest on the capital thus incorporated in the soil and the improvements thus made in it as an instrument of production may form a part of the rent paid by the capitalist farmer to the land owner,*122 but it does not constitute that ground-rent, strictly speaking, which is paid for the use of the soil as such, whether it be in a natural state or cultivated. In a systematic treatment of private property in land, which is not included in our plan, this part of the revenue of the land owner would have to be discussed at length. But a few words about it will suffice here. The more transient investments of capital which go with the ordinary processes of production in agriculture, are made without exception by the capitalist farmer. These investments, like cultivation proper, improve the soil,*123 if cultivation is carried on in a moderately rational manner and does not reduce itself to a brutal spoilation of the soil, such as used to be in vogue among the former slave holders in the United States, a thing against which the land owners may provide by contract. In this way material land is transformed into land-capital. A cultivated field is worth more than an uncultivated one of the same natural quality. Likewise the more permanent fixed capitals, which are incorporated in the soil and worn out in longer time, are largely, and in some spheres often exclusively, invested by the capitalist farmer. But as soon as the time stipulated by contract has expired—and this is one of the reasons why the land owners seek to shorten the time of contract as much as possible when capitalist production develops—the improvements embodied in the soil become the property of the land owner as an inseparable part of the land. In the new contract, which the land owner makes, he adds the interest for the capital incorporated in the soil to the real ground-rent. And he does this whether he leases the land to the same capitalist who made these improvements or to some other capitalist farmer. His rent is thus increased; or, if he wishes to sell his land (we shall see immediately how its price is determined), its value has risen. He sells not merely the soil, but the improved soil, the capital incorporated in the soil for which he did not pay anything. Quite aside from the movements of real ground-rent, this is one of the secrets of the increasing enrichment of the land owners, of the continuous inflation of their rents, and of the growing money-value of real estate in proportion as economic development proceeds. Thus they pocket a result of social development brought about without their help, fruges consumere nati, they are born to consume the fruits of the earth. But this is at the same time one of the greatest obstacles to a rational development of agriculture, because the capitalist renter avoids all improvements and expenses, for which he cannot expect any returns during the time of his lease. We find this fact denounced as such an obstacle, not only in the 18th century by James Anderson, the actual discoverer of the modern theory of rent, who was also a practical capitalist farmer and an advanced agronomist for his time, but also in our own days by the opponents of the present constitution of landed property in England.

VI.XXXVII.9

A. A. Walton, in his "History of the Landed Tenures of Great Britain and Ireland," London, 1865, says on this score: All the efforts of the numerous agricultural institutes in our country cannot accomplish any very important or really appreciable results in the actual progress of improved cultivation, so long as such improvements increase in a far higher degree the value of real estate and the size of the rent roll of the land owner, than they improve the condition of the tenant or the farm laborer. The tenants in general know quite as well as the land owner, his rent collector, or even the president of an agricultural society, that good drainage, ample manuring, and good management, together with an increased application of labor, cleaning the land thoroughly and working it over, will produce wonderful results, both in the improvement of the soil and in an increased production. But all this demands considerable expense, and the tenants also know very well, that no matter how much they may improve the soil or raise its value, the land owner will in the long run get the principal benefit of it in raised rents and increased land values....They are cunning enough to observe, what those speakers [land owners and their agents speaking at agricultural feasts] always forget to tell them, namely that the lion's share of all improvements made by the tenants must always pass ultimately into the pockets of the land owners....No matter how much the former tenant may have improved his leasehold, his successor will always find, that the land owner will raise the rent in proportion to the increased land value due to previous improvements. (Pages 96 and 97.)

VI.XXXVII.10

In agriculture proper this process does not yet appear quite so plainly as when the land is used for building lots. The overwhelming part of the land used in England for building purposes, but not sold as a freehold, is rented by the land owners for 99 years, or for a shorter time if possible. After the lapse of this time the buildings fall into the hands of the land owner together with the land. The tenants are obliged, says Walton, to deliver the house to the great land owner in a good inhabitable condition after the expiration of the lease, after they have paid up to this time an exorbitant ground-rent. Hardly has the lease expired, when the agent or inspector of the landlord comes, inspects your house, takes care that you get it into good condition, takes possession of it and annexes it to the domain of his landlord. The fact is that if this system is permitted to exert its full effects for some time longer, the entire ownership of houses as well as of country real estate will be in the hands of the great landed proprietors. The whole West End of London, north and south of Temple Bar, belongs almost exclusively to half a dozen great landlords, is rented at enormous ground-rents, and if the leases have not quite expired, most of them expire in rapid succession. The same applies in a greater or smaller degree to every city in the Kingdom. But even here this greedy system of exclusiveness and monopoly does not stop. Nearly all the docking facilities of our port cities are in the hands of the great land leviathans in consequence of the same process of usurpation. (L. c., p. 93.) Under these circumstances it is evident that if the census for England and Wales in 1861 gives the total population as 20,066,224 and the number of house owners as 36,032, the proportion of the owners to the number of houses and to the population would take on a very different aspect, if the great house owners were placed on one side and the small ones on the other.

VI.XXXVII.11

This illustration of property in buildings is important. In the first place, it clearly shows the difference between real ground-rent and interest on fixed capital incorporated in the soil, which may form an addition to the ground-rent. The interest on buildings, like that on capital incorporated in the soil by the tenant, falls into the hands of the industrial capitalist, the building speculator, or the tenant, so long as the lease lasts, and has in itself nothing to do with the ground-rent, which must be paid annually at stated dates for the use of the soil. In the second place it shows, that the capital incorporated in the soil ultimately passes into the hands of the landlord together with the land, and that the interest on it helps to swell his rent.

VI.XXXVII.12

Some writers, either acting as spokesmen of landlordism against the attacks of bourgeois economists, or endeavoring to transform the capitalist system of production from a system of antagonisms into one of "harmonies," as did Carey, have tried to represent ground-rent, the specific economic expression of private property in land, as identical with interest. For this would obliterate the antagonism between landlords and capitalists. The opposite method was employed in the beginning of capitalist production. In those days landed property was still regarded by popular conception as the primitive and respectable form of private property, while interest on capital was decried as usury. Dudley North, Locke and others, therefore represented interest on capital as a form analogous with ground-rent, just as Turgot deduced the justification of interest from the existence of ground-rent.—Aside from the fact that ground-rent may, and does, exist in its pure form without any addition for interest on capital incorporated in the soil, these more recent writers also forget, that in this way the landlord does not only receive interest on the capital of other people that cost him nothing, but also pockets this capital of others without any compensating return. The justification of private property in land, like that of all other forms of property within a certain mode of production, is that the mode of production is itself a transient historical necessity, and this includes the conditions of production and exchange, which flow from it. It is true, as we shall see later, that property in land differs from the other kinds of property by the fact that it appears superfluous, and even noxious, at a certain stage of development, even from the point of view of capitalist production.

VI.XXXVII.13

In another form, ground-rent may be confounded with interest and its specific character overlooked. Ground-rent assumes the shape of a certain sum of money, which the landlord draws annually out of the lease of a certain piece of the globe. We have seen that every sum of money may be capitalised, that is, considered as the interest on an imaginary capital. For instance, if the average rate of interest is 5%, then an annual ground-rent of 200 pounds sterling may be regarded as the interest on a capital of 4,000 pounds sterling. Ground-rent so capitalised forms the purchase price or value of the land, a category which is on its face irrational, just as the price of labor is, since the earth is not the product of labor and therefore has no value. But on the other hand a real relation in production is concealed behind this irrational form. If a capitalist buys land yielding a rent of 200 pounds sterling annually and pays 4,000 pounds sterling for it, then he draws the average interest of 5% on his capital of 4,000 pounds sterling, just as though he had invested this capital in interest-bearing papers or loaned it directly at 5% interest. It is the utilisation of a capital of 4,000 pounds sterling at 5%. On this assumption he would recover the purchase price of his estate in twenty years by its revenues. In England, therefore, the purchase price of land is calculated on so many years' purchase, and this is merely a different expression for the capitalisation of the ground-rent. It is in fact the purchase price, not of the land, but of the ground-rent yielded by it, calculated on the ordinary rate of interest. But this capitalisation of rent has for its premise the existence of rent, for rent cannot be explained and derived from its own capitalisation. Its existence, independent of its sale, is rather the condition from which the inquiry must start.

VI.XXXVII.14

It follows, then, that the price of land may rise or fall inversely as the rate of interest rises or falls, if we assume that ground-rent is a constant magnitude. If the ordinary rate of interest should fall from 5% to 4%, then the annual ground-rent of 200 pounds sterling would represent the annual self-expansion of a capital of 5,000 pounds sterling instead of 4,000 pounds sterling. The price of the same piece of land would thus have risen from 4,000 to 5,000 pounds sterling, or from 20 years' to 25 years' purchase. The reverse would take place in the opposite case. This is a movement of the price of land, which is independent of the movement of ground-rent itself and regulated only by the rate of interest. But as we have seen that the rate of profit has a tendency to fall in the course of social progress, and that the rate of interest has the same tendency, so far as it is regulated by the rate of profit; and since, furthermore, the rate of interest has a tendency to fall in consequence of the growth of loanable capital, aside from the influence of the rate of profit, it follows that the price of land has a tendency to rise, even independently of the movement of ground-rent and the prices of the products of the soil, of which the rent forms a part.

VI.XXXVII.15

The mistaking ground-rent for the interest form, which it assumes for the buyer of the land—a mistake due to a complete unfamiliarity with the nature of ground-rent—must lead to the most absurd conclusions. Since landed property is considered, in all old countries, as a particularly noble form of property, and its purchase also as an eminently safe investment of capital, the rate of interest at which ground-rent is bought is generally lower than that of other investments of capital for a long time, so that a buyer of real estate draws, for instance, only 4% on his purchase price, whereas he would draw 5% for the same capital in other investments. In other words, he pays more capital for the ground-rent than he would for the same amount of income in other investments. This leads Mr. Thiers to conclude in his utterly valueless work on La Propriété (a reprint of a speech of his made in 1849 against Proudhon in the French National Assembly) that ground-rent is low, while it proves merely that its purchase price is high.

VI.XXXVII.16

The fact that capitalised ground-rent represents itself as the price or value of land, so that the earth is bought and sold like any other commodity, serves to some apologists as a justification of private property in land, seeing that the buyer pays an equivalent for it the same as he does for other commodities, and that the major portion of property in land has changed hands in this way. The same reason would, in that case, serve also to justify slavery, since the returns from the labor of the slave, whom the slave holder has bought, represent merely the interest on the capital invested in this purchase. To derive from the sale and purchase of ground-rent a justification for its existence signifies to justify its existence by its existence.

VI.XXXVII.17

It is very important for a scientific analysis of ground-rent, that is of the independent and specifically economic form of property in land on the basis of capitalist production, to study it in its pure form and free from all falsifying and obliterating by-work. And it is no less important for an understanding of the practical effects of property in land, even for a theoretical comprehension of a multitude of facts, which run counter to the conception and nature of ground-rent and yet appear as modes of existence of ground-rent, to know the elements which give rise to such obscurities in theory.

VI.XXXVII.18

In practice everything appears naturally as ground-rent that is paid in the form of lease money by the tenant to the landlord for the permission of cultivating the soil. Whatever may be the composition of this tribute, whatever may be its sources, it has this in common with real ground-rent that the monopoly of the so-called owner of a piece of the globe enables him to levy such a tribute and impose such a tax. This tribute furthermore shares with the real ground-rent the fact that it determines the price of land, which, as we have indicated above, is nothing but the capitalised income from the lease of the land.

VI.XXXVII.19

We have already seen, that the interest for the capital incorporated in the soil may form one of those foreign ingredients in ground-rent, an element which must become a continually growing addition to the total rent of a certain country in proportion as economic development proceeds. But aside from this interest it is possible that the lease money may conceal a deduction from the average profit or from the normal wages, or both, being made up of them either in part or wholly, so that in some cases it may not represent any real ground-rent at all and the soil may be valueless. This portion of the profit, or of wages, appears then as ground-rent, because instead of falling normally into the hands of the industrial capitalist or the wage worker, it is paid to the land-lord in the form of lease money. Economically speaking neither the one nor the other of these portions constitutes any ground-rent; but in practice they constitute some of the revenue of the landlord, an economic utilisation of his monopoly, just as real ground-rent does, and they have a determining influence on land prices just as ground-rent has.

VI.XXXVII.20

We are not now speaking of conditions, in which ground-rent, the form of landed property adapted to the capitalist mode of production, formally exists without the capitalist mode of production itself, so that the tenant is not an industrial capitalist, nor the mode of his management a capitalist one. Such is the case in Ireland. The tenant is here generally a small farmer. What he pays to the landlord in the shape of rent absorbs frequently not merely a part of his profit, that is, of his own surplus-labor, to which he is entitled as the possessor of his own instruments of production, but also a part of his normal wages, which he would receive under different conditions for the same amount of labor. Besides, the landlord, who does not do anything for the improvement of the soil, also expropriates him from his small capital, which he incorporates for the greater part in the soil by his own labor, just as a usurer would do under similar circumstances. Only the usurer would at least risk his own capital in the operation. This continual robbery is the center of the disputes over the Irish Land Bill, which has for its principal aim to compel the landlord, when giving notice to his tenant to vacate, should pay him an indemnity for the improvements made by him in the soil, or for the capital incorporated by him in the land. Palmerston used to meet this demand with the cynical answer: "The House of Commons is a house of landlords."

VI.XXXVII.21

Nor do we speak of exceptional circumstances, in which the landlord may enforce a high rent even in countries with a capitalist production, although this rent may not be in any way connected with the product of the soil. Of such a nature is the renting of small patches of ground to laborers in English factory districts, either for small gardens or for amateur agriculture in spare hours. (Reports of Inspectors of Factories.)

VI.XXXVII.22

We are speaking of ground-rent in countries with a developed capitalist production. Among English tenants, for instance, there is a number of small capitalists, who are destined and compelled by education, training, tradition, competition, and other circumstances, to invest their capital as tenants in agriculture. They are compelled to be satisfied with less than the average profit, and to yield up a part of it to the landlords for rent. This is the only condition on which they are permitted to invest their capital in the soil, in agriculture. Since the landlords exert everywhere a considerable, in England even an overwhelming, influence on legislation, they are in a position to exploit this for the purpose of grinding down the entire class of tenants. The corn laws of 1815, for instance, a bread tax confessedly imposed upon the country for the purpose of securing for the idle landlords a continuation of their abnormally increased rentals during the anti-Jacobin wars, had indeed the effect, with the exception of a few extraordinarily rich years, of keeping the prices of agricultural products above the level which they could have held in free competition. But they did not have the effect of keeping prices at that level, which had been ordered by the law-making landlords to serve as standard prices in such a way as to form the legal limit for the importation of foreign corn. But the leases were made out under the impression created by these normal prices. As soon as the illusion passed away, a new law was made, with new normal prices, which were as much an impotent expression of the greedy land-lord's phantasy as the old ones. In this way the tenants were cheated from 1815 to the thirties. Hence we have during all this period the standing subject of agricultural distress. And with it we have during this period the expropriation and the ruin of a whole generation of tenants, and the appropriation of their places by a new class of capitalists.*124

VI.XXXVII.23

A much more general and important fact, however, is the depression of the wages of the actual farm laborers below their normal average, so that a portion of the wages is deducted in order to become a part of the lease money and thus flowing into the pockets of the landlord instead of the laborer under the disguise of ground-rent. This is the case quite generally in England and Scotland, with the exception of a few favorably situated counties. The inquiries of the Parliamentarian Committees into the scale of wages made before the passing of the corn laws in England—so far the most valuable and almost unexploited contributions to a history of wages in the 19th century, and at the same time a monument of disgrace erected for themselves by the English aristocracy and bourgeoisie—proved convincingly and beyond a doubt that the high rates of rent and the corresponding raise in the land prices during the anti-Jacobin wars, were due in part to no other cause but the deductions from wages and the depression of wages even below the physical minimum. In other words, a part of the wages had been paid over to the landlords. Various circumstances such as the depreciation of money, the handling of the poor laws in the agricultural districts, etc., had made these operations possible, at a time when the incomes of the tenants were rising enormously and the landlords amassed fabulous riches. Yes, one of the main arguments for the introduction of the corn laws, used by both tenants and landlords, was that it was physically impossible to depress the wages of the farm laborers still more. This condition of things has not been materially altered, and in England as well as in all European countries a portion of the normal wages is absorbed by the ground-rent the same as ever. When Count Shaftsbury, then Lord Ashley, one of the philanthropic aristocrats, was so extraordinarily moved by the condition of the English factory laborers and acted as their spokesman in Parliament during the agitation for a ten hour day, the spokesmen of the industrials got their revenge by publishing statistics on the wages of the agricultural laborers in the villages belonging to him (see Volume I, chapter XXV, 5e, The British Agricultural Proletariat), which showed clearly, that a portion of the ground-rent of this philanthropist consisted of the loot, which his agents filched for him out of the wages of the agricultural laborers. This publication is also interesting for the reason, that the facts exposed by it may rank in the same class with the worst exposures made by the Committees in 1814 and 1815. As soon as circumstances permit of a temporary raise in the wages of the agricultural laborers, a cry goes up from the capitalist tenants to the effect that a raising of the wages to their normal level, as customary in other lines of industry, would be impossible and would ruin them, unless ground-rent were reduced at the same time. This is a confession, that the tenants deduct a portion from the wages of the laborers under the name of ground-rent and pay it over to the landlords. For instance, from 1849 to 1859 the wages of the agricultural laborers rose in England through a combination of overwhelming circumstances, such as the exodus from Ireland, which cut off the supply of agricultural laborers coming from that country; an extraordinary absorption of the agricultural population by the factories; a demand for soldiers to go to war; an exceptional emigration to Australia and the United States (California), and other causes which need not be mentioned here. At the same time the average prices of grain fell by more than 16% during this period, with the exception of the poor agricultural years from 1854 to 1856. The tenant capitalists shouted for a reduction of their rents. They succeeded in single cases. But on the whole they failed to get what they wanted. They sought refuge in a reduction of the cost of production, among other things by introducing steam engines and new machinery in abundance, which partly replaced horses and crowded them out of the business, but partly also created an artificial overpopulation by throwing agricultural laborers out of work and thereby causing a fall in wages. And this took place in spite of the general relative decrease of the agricultural population during that decade, compared to the growth of the total population, and in spite of the absolute decrease of the agricultural population in some purely agricultural districts.*125 In the same way Fawcett, then professor of political economy at Cambridge, who died in 1884 as Postmaster General, said at the Social Science Congress, October 12, 1865: "The agricultural laborers began to emigrate and the tenants began to complain, that they would not be able to pay such high rents as they had been accustomed to pay, because labor became dearer in consequence of emigration." Here, then, the high ground-rent is directly identified with low wages. And so far as the level of the prices of land is determined by this circumstance increasing the rent, a rise in the value of the land is identical with a depreciation of labor, a high price of land with a low price of labor.

VI.XXXVII.24

The same is true of France. "The price of rent rises, because the prices of bread, wine, meat, vegetables and fruit rise on the one side, while on the other the price of labor remains unchanged. If the older people compare the bills of their fathers, taking us back about 100 years, they will find that the price of one day's labor was then the same in rural France as it is now. The price of meat has trebled since them....Who is the victim of this revolution? Is it the rich, who is the proprietor of the estate, or the poor who works it?...The raising of the prices of rent is the proof of a national disaster." (Du Mécanisme de la Société en France et en Angleterre. Par M. Rubichon, Second edition, Paris, 1837, p. 101.)

VI.XXXVII.25

We now give some illustrations of rent representing deductions either from the average profit or from the average wages.

VI.XXXVII.26

The above quoted Morton, real estate agent and agricultural engineer, says that the observation has been made in many localities that the rent for large estates is smaller than for small ones, because "competition for the latter is generally greater than for the former, and because small tenants, who are rarely able to take up any other business but farming, are frequently willing to pay a rent, which they themselves know to be too high, pressed by the want of finding some other business." (John C. Morton, The Resources of Estates. London, 1858, p. 116.)

VI.XXXVII.27

However, he is of the opinion that this difference is gradually disappearing in England, and he attributes this largely to the emigration of the class of small tenants. The same Morton gives an illustration, in which evidently the wages of the tenant himself, and still more surely of the laborers, suffer a deduction for ground-rent. This takes place in the case of estates of 70 to 80 acres, who cannot keep a two-horse plow. "Unless the tenant works as diligently with his own hands as any laborer, he cannot make out on his lease. If he leaves the execution of the work to his men and confines himself to superintending them, he will most likely find very quickly that he is unable to pay his rent." (L. c., p. 118.) Morton concludes, therefore, that unless the tenants of a certain locality are very poor, the leaseholds should not be smaller than 70 acres, so that the tenants may keep two or three horses.

VI.XXXVII.28

Extraordinary wisdom of Monsieur Léonce de Lavergne, Membre de l'Institut et de la Société Centrale d'Agriculture. In his Economic Rurale de l'Angleterre (quoted from the English translation, London, 1855), he makes the following comparison of the annual advantages from cattle, that work in France but not in England, where they are replaced by horses (p. 42):

FRANCE ENGLAND
Milk... 4 million p.st. Milk... 16 million p.st.
Meat... 16 million p.st. Meat... 20 million p.st.
Labor... 8 million p.st. Labor...
28 million p.st. 36 million p.st.

VI.XXXVII.29

But the higher amount for England is obtained here, according to his own statement, because milk is twice as dear in England than in France, while he counts the same prices for meat in both countries (p. 35); therefore the English milk product reduces itself to 8 million pounds sterling, and the total product to 28 million pounds sterling, the same as in France. It is indeed a strong dose, that Mr. Lavergne lumps the quantities and price differences together in his calculation, when England produces certain articles more expensively than France, so that this appears as an advantage of English agriculture, whereas it signifies at best only a higher profit for tenants and landlords.

VI.XXXVII.30

That Mr. Lavergne is not only familiar with the advantages of English agriculture, but also believes in the prejudices of the English tenants and landlords, is proved by him on page 48: "One great disadvantage is generally connected with grain plants...they exhaust the soil that bears them." Mr. Lavergne believes not only that other plants do not do so, but he also believes that leguminous crops and root crops enrich the soil: "Leguminous plants draw the principal elements of their growth out of the air, while they give back to the soil more than they take from it; therefore they help both directly and indirectly through their return in the shape of animal manure to make good in a double way the damage caused by grain crops and other exhausting crops; hence it is a matter of principle that they should at least alternate with such crops; in this consists the Norfolk rotation." (Pages 50 and 51.)

VI.XXXVII.31

No wonder that Mr. Lavergne, who believes these fairy tales of the English rural mind, also believes that the wages of the English farm laborers have lost their abnormality since the repeal of the corn tax. See what we have said on this point in another place, Volume I, chapter XXV, 5c, pages 739 to 766. But let us also listen to Mr. John Bright's speech in Birmingham, December 14, 1865. After mentioning the 5 million families that are not represented in Parliament, he continues: "Among these are one million, or rather more than one million in the United Kingdom, who are put down on the luckless list of paupers. Then there is still another million, who are holding themselves just above pauperism, but who are continually in danger of likewise becoming paupers. Their condition and prospects are not any better. Now take a look at the ignorant lower strata of this portion of society. Consider their outcast condition, their poverty, their complete hopelessness. Even in the United States, even in the southern states during the reign of slavery, every negro looked forward to some jubilee year. But these people, this mass of the lowest strata of our country, I am here to express it, have neither the faith in any improvement nor even a longing for it. Did you read the other day that item about John Cross, a farm laborer of Dorsetshire? He worked six days in the week, had an excellent character from his employer, for whom he had worked 24 years for a weekly wage of 8 sh. John Cross had to keep a family of seven children in his hut out of this wage. In order to warm his sickly wife and her suckling babe, he took, or legally speaking he stole, a wooden hurdle worth six pence. For this crime he was sentenced to 14 or 20 days' imprisonment by the justices of the peace. I can tell you that many thousands of cases like that of John Cross may be found in the whole country, and particularly in the South, and that their condition is such, that so far the most sincere investigator has not been able to solve the secret, how they keep body and soul together. And now throw your glances over the whole country and look at those 5 million families and the desperate condition of this stratum of them. Can we not say truly that the mass of the nation excluded from the suffrage toils and toils again and knows almost no rest? Compare them with the ruling class—but if I do that I shall be accused of communism...but compare this great toiling and suffrageless nation with that part which may be regarded as the ruling class. Look at their wealth, their showiness, their luxury. Look at their weariness—for there is a weariness also among them, but it is the weariness of satiety—and see how they hasten from place to place, as though it were only a question of discovering new pleasures." (Morning Star, December 15, 1865.)

VI.XXXVII.32

We will show hereafter, in what manner surplus-labor, and consequently surplus-products, are confounded with ground-rent, which is, at least under the capitalist mode of production, qualitatively and quantitatively a specifically determined part of the surplus-product. The natural basis of surplus-labor in general, that is a natural condition without which such labor cannot be performed, is that nature must supply, either in animal or vegetable products of the soil or in fisheries, etc., the necessary means of subsistence by an expenditure of labor which does not consume the entire working day. This natural productivity of agricultural labor (which implies here the labor of gathering, hunting, fishing, cattle raising) is the basis of all surplus-labor; so is all labor primarily and originally directed toward the appropriation and production of food. (The animal supplies at the same time skins for warmth in colder climates; also cave dwellers, etc.)

VI.XXXVII.33

The same confusion between surplus-product and ground-rent, differently expressed, is shown by Mr. Dove. Originally agricultural and industrial labor are not separated. The second joins into the first. The surplus-labor and the surplus-product of the farming tribe, the house commune or family, comprise both agricultural and industrial labor. Both go hand in hand. Hunting, fishing, agriculture are impossible without suitable tools. Weaving, spinning, etc., were first carried on as side occupations to farming.

VI.XXXVII.34

We have shown previously, that in the same way in which the labor of the individual workman may be separated into necessary and surplus-labor, the aggregate labor of the working class may be divided so that that portion, which produces the total means of subsistence for the working class (including the means of production required for this purpose) performs the necessary labor for the whole society. The labor performed by all the remainder of the working class may then be regarded as surplus-labor. But the necessary includes by no means only agricultural labor, but also that labor which produces all other products that necessarily pass into the average consumption of the laborer. Socially speaking, some perform only necessary, others only surplus-labor, and vice versa. It is but a division of labor between them. It is the same with the division of labor between agricultural and industrial laborers in general. The purely industrial character of labor on the one side is offset by the purely agricultural one on the other. This purely agricultural labor is by no means natural, but is rather a product, and a very modern one at that, which has not yet been acquired everywhere, of social development, and it corresponds to a very definite stage of development. Just as a portion of the agricultural labor is materialised in products, which either minister only to luxury or serve as raw materials in industry, but do not serve as food, particularly not as food for the masses, so a portion of the industrial labor is materialised in products, which serve as necessary means of consumption of both the agricultural and industrial laborers. It is a mistake to consider this industrial labor, from a social point of view, as surplus-labor. It is in part as much necessary labor as the necessary portion of the agricultural labor. It is likewise but a separated form of a part of industrial labor which was formerly naturally connected with agricultural labor, it is a necessary and mutual supplement to the purely agricultural labor, which is now separated from it. (From a purely material point of view 500 mechanical weavers may produce surplus-fabrics to a far greater degree, that is, more than is required for their own clothing.)

VI.XXXVII.35

It should finally be remembered in the study of the various forms which appear as ground-rent, that is, of the lease money paid under the name of ground-rent to the landlord for the use of the land for the purposes of production or consumption, that the price of things, which have in themselves no value, not being the products of labor, such as the land, or which at least cannot be reproduced by labor, such as antiquities, works of art of certain masters, etc., may be determined by many accidental combinations. In order to sell a thing, nothing more is required than that it can be monopolised and alienated.


VI.XXXVII.36

There are three great errors, which should be avoided in the study of ground-rent, and which obscure its analysis.

VI.XXXVII.37

1) Confusion of the various forms of rent, which correspond to different stages of development of the process of social production.

VI.XXXVII.38

Whatever may be the specific form of rent, all types of it have this in common that the appropriation of rent is that economic form, in which property in land realises itself, and that ground-rent on its part is conditioned on the existence of private property in land, the ownership of certain portions of the globe by certain individuals. The owner may be the individual representing the community, as in Asia, Egypt, etc., or this private ownership in land may be merely accessory to the ownership of the persons of the direct producers by some individuals, as under the slave or serf system, or it may be a purely private ownership of nature by nonproducers, a mere title to land, or finally it may be a relation to the soil which, as in the case of colonists and small peasants owning land, seems included under a system of isolated and unsocial labor in the appropriation and production of the products of certain pieces of land by the direct producers.

VI.XXXVII.39

This common element in the various forms of rent, namely that of being the economic realisation of property in land, a legal fiction by grace of which certain individuals have an exclusive right to certain pieces of the globe, misleads into overlooking the differences.

VI.XXXVII.40

2) All ground-rent is surplus-value, the product of surplus-labor. In its undeveloped form, as natural rent (rent in kind), it is as yet directly the surplus-product itself. This gives rise to the mistaken idea that the rent corresponding to the capitalist mode of production is explained by merely explaining the general prerequisites of surplus-value and profit, whereas this ground-rent is always a surplus over and above profit. It is a peculiar and specific portion of surplus-value, over and above that portion of the value of commodities, which is known as profit and consists itself of surplus-value (surplus-labor). The general conditions for the existence of surplus-value and profit are: The direct producers must work beyond the time necessary for the reproduction of their own labor-power. They must perform surplus labor in general. This is the subjective condition. The objective condition is that they must be able to perform surplus-labor. The natural conditions must be such that a part of their available labor time suffices for their reproduction and selfmaintenance as producers, that the production of their necessary means of subsistence shall not consume their whole labor-power. The fertility of nature forms a limit here, a starting point, a basis. The development of the social productivity of their labor forms the other limit. Still more strictly speaking, since the production of means of subsistence is the very first condition of their existence and of all production, the labor used in this production, that is the agricultural labor in the widest economic meaning, must be productive enough, so that it will not absorb the entire available labor time in the production of means of subsistence for the direct producers. Agricultural surplus-labor and an agricultural surplus-product must be possible. More widely applied, it means that the total agricultural labor, both necessary and surplus-labor, of a part of society suffices to produce the necessary subsistence for the whole society, including the laborers who are not agricultural. It means that this great division of labor between farmers and industrials must be possible, also that between farmers producing subsistence and farmers producing raw materials. Although the labor of the producers of subsistence consists of necessary and surplus-labor, so far as their own point of view goes, it represents from the social standpoint only the labor necessary to produce the social subsistence. The same takes place in the case of division of labor within society as a whole, as distinguished from division of labor in the individual workshop. It is the labor necessary for the production of particular articles, for the satisfaction of some particular need of society. If this division is proportional, then the products of the various groups are sold at their values (at a later stage of development at their prices of production), or at prices which are modifications of their values or prices of production due to general laws. It is indeed the law of value enforcing itself, not with reference to individual commodities or articles, but to the total products of the particular social spheres of production made independent by division of labor. Every commodity must contain the necessary quantity of labor, and at the same time only the proportional quantity of the total social labor time must have been spent on the various groups. For the use-value of things remains a prerequisite. The use-value of the individual commodities depends on the particular need which each satisfies. But the use-value of the social mass of products depends on the extent to which it satisfies in quantity a definite social need for every particular kind of product in an adequate manner, so that the labor is proportionately distributed among the different spheres in keeping with these social needs, which are definite in quantity. (This point is to be noted in the distribution of capital to the various spheres of production.) The social need, that is the use-value on a social scale, appears here as a determining factor for the amount of social labor which is to be supplied by the various particular spheres. But it is only the same law, which showed itself in the individual commodity, namely that its use-value is the basis of its exchange-value and thus of its surplus-value. This point has any bearing upon the proportion between necessary and surplus-labor only in so far as a violation of this proportion makes it impossible to realise the value of the commodities and the surplus-value contained in it. For instance, take it that proportionally too much cotton goods have been produced, although only the labor-time necessary for this total product under the prevailing conditions is realised in it. But too much social labor has been expended in this particular line, in other words, a portion of this product is useless. The whole of it is therefore sold only as though it had been produced in the necessary proportion. This quantitative limit of the quota of social labor available for the various particular spheres is but a wider expression of the law of value, although the necessary labor time assumes a different meaning here. Only just so much of it is required for the satisfaction of the social needs. The limitation is here due to the use-value. Society can use only so much of its total labor for this particular kind of products under the prevailing conditions of production. But the subjective and objective conditions of surplus-labor and surplus-value in general have nothing to do with the peculiar form of either the profit or the rent. These conditions apply to surplus-value as such, no matter what special form it may assume. Hence they do not explain ground-rent.

VI.XXXVII.41

3) It is precisely the self-expansion of private property, the development of ground-rent, which reveals the characteristic peculiarity, that its amount is by no means determined by the actions of its recipient, but by the independent development of social labor, in which he does not take part. It may easily happen, therefore, that something is regarded as a peculiarity of rent (and of the products of agriculture in general), which is really a common feature of all lines of production and all their products on the basis of the production of commodities, or, more strictly speaking, of capitalist production.

VI.XXXVII.42

The amount of ground-rent (and with it the value of the soil) develops with the progress of social advance as a result of the total labor of society. On the one hand this leads to a growth of the market and of the demand for products of the soil, on the other it stimulates the demand for the land itself, which is a prerequisite of competitive production in all lines of business, even in those which are not agricultural. Speaking strictly of real-ground rent, this rent, and with it the value of the soil, develops with the market for the products of the soil, and thus with the increase of the other than agricultural population, with its needs and demand for either means of subsistence or raw materials. It is the nature of capitalist production to reduce the agricultural population continually as compared to the non-agricultural, because in industry (strictly speaking) the increase of the constant capital compared to the variable capital goes hand in hand with an absolute increase, though relative decrease, of the variable capital; whereas in agriculture the variable capital required for the exploitation of a certain piece of land decreases absolutely and cannot increase, unless new land is taken into cultivation, which implies a still greater previous growth of the non-agricultural population.

VI.XXXVII.43

In fact we are not dealing here with a characteristic peculiarity of agriculture and its products. On the contrary, the same applies to all other lines of production and products on the basis of a production of commodities and of its absolute form, capitalist production.

VI.XXXVII.44

These products are commodities, use-values, which have an exchange-value which can be realised, converted into money, only to the extent that other commodities form an equivalent for them, that other products face them as commodities and values. They have an exchange-value to the extent that they are not produced as immediate means of subsistence for the producers themselves, but as commodities, as products which become use-values only by their conversion into exchange-values (money), by being gotten rid of. The market for these commodities develops through the social division of labor; the separation of the productive labor into various departments transforms their respective products mutually into commodities, into mutual equivalents, makes them serve mutually as markets. This is in no way peculiar to agricultural products.

VI.XXXVII.45

Rent can develop as money-rent only on the basis of a production of commodities, more strictly of capitalist production, and it so develops in proportion as the agricultural production becomes a production of commodities. This is the same proportion in which other than agricultural lines of production develop independently of agriculture, for to that extent does the agricultural product become a commodity, an exchange-value, a value. To the same extent that the production of commodities develops as a capitalist production, and as a production of value, does the production of surplus-value and surplus-products proceed. But to the same extent that this continues does property in land acquire the faculty of capturing an ever increasing portion of this surplus-value by means of its land monopoly. Thereby it raises its rent and the price of the land itself. The capitalist performs at least an active function himself in the development of surplus-value and surplus-products. But the land owner has but to capture his growing share in the surplus-product and the surplus-value created without his assistance. It is this which is the characteristic peculiarity of his position, and not the fact that the value of the products of the soil and thus of the land increases in proportion as the market for them expands, the demand grows and with it the world of commodities which are not agricultural products, the mass of producers and products outside of agriculture. But as this is done without the assistance of the landowner, it appears as something specifically his own, that measures of value, measures of surplus-value, and the conversion of a portion of surplus-value into ground-rent should depend upon the process of social production, on the development of the production of the commodities in general. For this reason a man like Dove wants to develop rent out of this element. He says that rent does not depend upon the mass of agricultural products, but upon their value; but this depends upon the mass and productivity of the non-agricultural population. But it is also true of all other products that they cannot develop the character of commodities, unless the mass, the variety and the succession of other commodities form equivalents for them. We have shown this previously in the discussion of the general nature of value. On the one hand the exchangeability of a certain product depends altogether on the multiplicity of commodities existing outside of it. On the other hand this circumstance determines in particular to what extent this product shall be put out as a commodity.

VI.XXXVII.46

No producer, whether an industrial or farmer, considered by himself alone, produces value or commodities. His product becomes a commodity only in definite social interrelations. It becomes a commodity, in the first place, to the extent that it represents social labor, so that the individual producer's labor counts as a part of the general social labor. And in the second place this social character of his labor appears impressed upon his product through its pecuniary character and through its general exchangeability determined by its price.

VI.XXXVII.47

Instead of explaining rent, such vagaries confine themselves to explaining merely surplus-value in general, or, still more absurdly, surplus-products in general, and on the other hand they make the mistake of ascribing a character, which belongs to all products in their capacity as commodities, to agricultural products exclusively. This is still more vulgarised by those who pass from a general analysis of value over to the realisation of a certain commodity's value. Every commodity can realise its value only in the process of circulation, and whether it realises its value, and to what extent it does so, depends on the prevailing market conditions.

VI.XXXVII.48

It is not a peculiarity of ground-rent, then, that the products of agriculture develop into values and as values, that they face other commodities as commodities, and that products not agricultural face them as commodities, or that they develop as specific expressions of social labor. The peculiarity of ground-rent is rather that in proportion as the conditions develop, in which agricultural products develop as commodities (values), and in which they can realise their values, so does also property in land develop the power to appropriate an increasing portion of these values, which were created without its assistance, and so does an increasing portion of the surplus-value assume the form of ground-rent.


Notes for this chapter


Nothing could be more comical than Hegel's development of private property in land. According to him, man as an individual must give reality to his will as the soul of external nature, and to this end he must take possession of nature and make her his private property. If this were the destiny of "the individual," of man as an individual, it would follow that every human being must be a land-owner, in order to materialise as an individual. Free private property in land, a very recent product, is not a definite social relation, according to Hegel, but a relation of man as an individual to "nature, an absolute right of man to appropriate all things." (Hegel, Philosophy of Law, Berlin, 1840, p. 79.) So much at least, is evident, that the individual cannot maintain himself as a landowner by his mere "will" against the will of another individual, who likewise wants to materialise himself in the same piece of land. It requires a good many other things besides the good will. Furthermore, it is absolutely beyond any one's ken to decide, where "the individual" should draw the line for the realisation of his will, whether the presence of his will should materialise in one whole country, or whether it should require a whole bunch of countries by whose appropriation I might "manifest the supremacy of my will over the thing." Here Hegel breaks down. "The appropriation is of a very individual kind; I do not take possession of more than I touch with my body, but the second point is at the same time that external things have a greater extension than I can grasp. While I thus have possession of a thing, something else is likewise in touch with it. I exercise my appropriation by my hand, but its scope may be extended." (P. 90.) But this other thing is again in touch with still another, and so the boundary disappears, within which I might pour my will as the soul of the soil. "If I own anything, my reason at once passes on to the idea that not only this property, but also the thing it touches is mine. Here positive right must fix its boundaries, for nothing more can be deduced from the conception." (P. 91.) This is an extraordinarily naive confession of the "conception," and it proves that this conception, which makes at the outset the mistake of regarding a very definite legal conception of landed property belonging to bourgeois society as an absolute one, does not understand anything of the actual articulations of this property. This implies at the same time the confession, that the "positive" law may, and must, alter its decisions in proportion as the requirements of social, i.e. economic development, change.
Very conservative agricultural chemists, for instance Johnston, admit that a really rational agriculture meets everywhere insurmountable barriers through the existence of private property. So do writers, who are confessedly advocates of the monopoly of private property on the globe, for instance Charles Comte in his work of two volumes, which has for its special aim the defense of private property. "A nation," says he, "cannot attain to the degree of prosperity and power compatible with its nature, unless every portion of the soil nourishing it is assigned to that purpose which agrees best with the general interest. In order to give to its wealth a strong development, one sole and highly enlightened will should, if possible, take it upon himself to assign to each piece of his domain its task and make every piece contribute to the prosperity of all others. But the existence of such a will...would be incompatible with the division of the land into private plots...and with the ability of each owner to dispose of his property in an almost absolute manner, according to constitutional guarantees."—Johnston, Comte, and others, have in mind only the necessity of tilling the land of a certain country as a whole, when they speak of an antagonism of private property to a rational system of agronomics. But the dependence of the cultivation of particular products of the soil upon the fluctuations of market prices, and the continual changes of this cultivation with these fluctuations of prices, the whole spirit of capitalist production, which is directed toward the immediate gain of money, contradicts agriculture, which has to minister to the entire range of permanent necessities of life required by a network of human generations. A striking illustration of this is furnished by the forests, which are occasionally managed in a way befitting the interests of society as a whole, when they are not private property, but subject to the control of the state.
The Poverty of Philosophy, p. 148. There I have made a distinction between land-capital and material land. "By merely applying additional capital to land already transformed into means of production land-capital may be augmented without adding anything to the material land, that is to say, to the extent of the land....As capital, land is not more eternal than any other capital....Land-capital is fixed capital, but fixed capital is used up as well as circulating capital."
I say "may," because under certain circumstances this interest is regulated by the law of ground-rent and may disappear, for instance, in the case of competition between lands of great natural fertility.
See James Anderson and Carey.
See the anti-corn law prize essays. However, the corn laws always kept prices at an artificially higher level. For the better situated tenants this was favorable. They profited by the stationary condition, in which the protective duties kept the great mass of tenants, who relied with or without reason on the exceptional average price.
John C. Morton, The Forces Used in Agriculture. Lecture in the London Society of Arts, 1860, based upon authentic documents, collected by about 100 tenants from 12 Scotch and 35 English counties.

Part VI, Chapter XXXVIII.

End of Notes


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