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

Karl Marx
Marx, Karl
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Frederick Engels, ed. Ernest Untermann, trans.
First Pub. Date
Chicago: Charles H. Kerr and Co.
Pub. Date
Das Kapital, based on the 1st edition.
50 of 55

Part VI, Chapter XLVII.

I. Introductory Remarks.


WE must be clear in our minds about the real difficulty in the analysis of ground-rent from the point of view of modern economics, to the extent that it is a theoretical expression of the capitalist mode of production. Even many of the more modern writers have not grasped this yet, as is shown by every renewed attempt to find a "new" explanation of ground-rent. The novelty consists almost always in a relapse into long outgrown conceptions. The difficulty is not to explain the surplus product and the surplus-value produced by agricultural capital. This question is solved by the general analysis of the surplus-value produced by all productive capital, no matter in what sphere it may be invested. The difficulty consists rather in demonstrating the source of the surplus over and above the general surplus-value paid by capital invested in the soil to the landlord in the form of rent after the general surplus-value has been distributed among the various capitals by means of the average profit, in other words, after the various capitals have shared in the total surplus-value produced by the social capital in all spheres of production in proportion to their relative size. Quite aside from the practical motives, which urged the modern economists as spokesmen of the industrial capitalists against the landlords to investigate this question, motives which we shall indicate more clearly in the chapter on the history of ground-rent, the question was of paramount interest for them as a theory. To admit that the rising of rent for capital invested in agriculture was due to some particular effect of the sphere of investment, to peculiar qualities of the land itself, was equivalent to giving up the conception of value as such, equivalent to abandoning all attempts at a scientific understanding of this field. Merely the simple observation that the rent is paid out of the price of the products of the soil, a thing which takes place even where rent is paid in kind, provided that the tenant is to get his price of production out of the land, showed the absurdity of the attempt to explain the excess of this price over the ordinary price of production, in other words, to explain the relative dearness of the products of agriculture out of the excess of the natural productivity of agricultural industry over the productivity of the other lines of industry. For the reverse is true. The more productive labor is, the cheaper is every aliquot part of its product, because the mass of use-values is so much greater, in which the same quantity of labor and with it the same value is incorporated.


The entire difficulty in the analysis of rent, therefore, consists in the explanation of the excess of agricultural profit over the average profit. It is not a question of surplus-value as such, but of the peculiar surplus of surplus-value found in this sphere of production, not a question of the "net product," but of the excess of this net product over the net product of the other lines of industry. The average profit itself is a product, formed under very definite historical conditions of production by the movement of the process of social life, a product which requires very far-reaching interrelations, as we have seen. In order that we may be able to speak at all of a surplus over the average profit, this average profit itself must already exist as a standard and as a regulator of production, such as it is under capitalist production. For this reason there can be no such thing as a rent in the modern sense, a rent consisting of a surplus over the average profit, over and above the proportional share of each individual capital in the total surplus-value produced by the entire social capital, so long as capital does not perform the function of enforcing all surplus-labor and appropriating at first hand all surplus-value, so long as capital has not yet brought under its control the social labor, or has done so only sporadically. It shows the naiveté of a man like Passy (see further along) that he speaks of a rent, a surplus over the profit, in primitive society, a surplus over and above a historically defined form of surplus-value, which, according to Passy, might almost exist without any society.


For the older economists, who make the first beginning in an analysis of the capitalist mode of production, which was still undeveloped in their day, the analysis of rent either offers no difficulty, or a difficulty of another sort. Petty, Cantillon, and in general the writers who are closer to feudal times, assume that ground-rent is the normal form of surplus-value, whereas profit to them is still vaguely combined with wages, or at best looks to them like a portion of surplus-value filched by the capitalist from the landlord. These writers take their departure from a condition, in which the agricultural population still constitutes the overwhelming majority of the nation, and in which the landlord still appears as the individual, who appropriates at first hand the surplus labor of the direct producers through his land monopoly, in which land therefore still appears as the chief requisite of production. These writers could not yet face the question, which, contrary to them, seeks to investigate from the point of view of capitalist production, how it happens that private ownership in land manages to wrest from capital a portion of the surplus-value produced by it at first hand (that is, filched by it from the direct producers) and first appropriated by it.


The physiocrats are troubled by a difficulty of another kind. Being in fact the first systematic spokesman of capital, they try to analyze the nature of surplus-value in general. This analysis coincides for them with the analysis of rent, the only form of surplus-value that exists for them. Therefore the rent-paying, or agricultural capital, is to them the only capital which produces any surplus-value, and the agricultural labor set in motion by it the only labor which makes for surplus-value, which quite correctly is considered the only productive labor from a capitalist point of view. They are right in considering the production of surplus-value as the essential thing. Aside from other merits set forth by us in the volume dealing with "Theories of Surplus-Value," they have the great merit of going back from the merchants' capital, which performs its functions wholly in the sphere of circulation, to the productive capital. In this they are opposed to the mercantile system, which, with its crude realism, constitutes the dominating vulgar economy of that time pushing the beginnings of scientific analysis by Petty and his successors into the background by means of its practical interests. By the way, in this critique of the mercantile system we aim only at its conceptions of capital and surplus-value. We have already indicated previously that the monetary system correctly proclaims production for the world market and the transformation of the product into commodities, and thus into money, as the prerequisite and condition of capitalist production. In the further development of this system into the mercantile system, it is no longer the transformation of the value of commodities into money, but the production of surplus-value, which decides the point, but merely from the meaningless point of view of the sphere of circulation and with the understanding that this surplus-value must present itself as surplus money in the surplus of the balance of trade. The characteristic mark of the interested merchants and manufacturers of that time, which is adequate to the period of capitalist development represented by them, is found in the fact that their principal aim in the transformation of the feudal and agricultural societies into industrial ones and in the corresponding industrial struggle of the nations upon the world market is a hastened development of capital, which is not supposed to take place in the so-called natural way, but by means of forced measures. It makes a tremendous difference, whether the national capital is gradually and slowly transformed into industrial capital, or whether the time of this development is hastened by means of a tax which they impose through protective duties mainly upon the real estate owners, the middle class and small farmers, and the handicraftsmen, by the accelerated expropriation of the independent direct producers, by a violently hastened accumulation and concentration of capitals, in short by a hastened introduction of the conditions of capitalist production. It makes at the same time an enormous difference in the capitalist and industrial exploitation of the natural powers of national production. Hence the national character of the mercantile system is not a mere phrase in the mouths of its spokesmen. Under the pretense of occupying themselves merely with the wealth of the nation and the resources of the state, they practically proclaim the interests of the capitalist class and the gathering of riches to be the ultimate end of the state, and so they proclaim bourgeois society against the old supernatural state. But at the same time they are conscious of the fact that the development of the interests of capital and of the capitalist class, of capitalist production, is the foundation of the national power and of the national preponderance in modern society.


The physiocrats are, furthermore, correct in stating that the production of surplus-value, and with it all development of capital, has for its natural basis the productivity of agricultural labor. If human beings are not capable of producing by one day's labor more means of subsistence, which signifies in its strictest sense more products of agriculture, than every laborer needs for his own reproduction, if the daily expenditure of his entire labor-power suffices only to produce the means of subsistence indispensable for his own individual needs, then there can be no mention of any surplus product nor of any surplus-value. A productivity of agricultural labor exceeding the individual requirements of the laborer is the basis of all societies, and is above all the basis of capitalist production, which separates a continually increasing portion of society from the production of the immediate requirements of life and transforms them into "free heads," as Steuart has it, making them available for exploitation in other spheres.


But what are we to say of more recent writers on economics, such as Daire, Passy, etc., who repeat the most primitive conceptions concerning the natural requirements of surplus labor and surplus-value in general, at a time when classic economy is in its declining years, or even on its deathbed, and who imagine that they are thus saying something new and convincing on ground-rent, after this ground-rent has long developed a peculiar form and has become a specific part of surplus-value?


It is precisely characteristic of vulgar economy that it repeats things which were new, original, deep and justified during a certain outgrown stage of development, at a time when they have become platitudinous, stale, false. In this way it confesses that it has not the slightest suspicion of the problems which used to occupy the attention of classic economy. It confounds them with questions that could be posed only on a low level in the development of bourgeois society. It is the same with its restless and self-complacent rumination of the physiocratic phrases concerning free trade. These phrases have long lost all theoretical interest, no matter how much they may engage the practical attention of this or that modern state.


In natural economy, properly so-called, when no part of the agricultural product, or but a very insignificant part of it, enters into the process of circulation, or even but a relatively small portion of that part of the product which represents the revenue of the landlord, as it did in many Roman latifundiæ, or upon the villae of Charlemagne, or more or less during the entire Middle Ages (see Vincard, Histoire du Travail), the product and the surplus product of the large estates consists by no means purely of the products of agricultural labor. Domestic handicrafts and manufacturing labor, as side issues to agriculture, which forms the basis, is the prerequisite of that mode of production upon which natural economy rests, in European antiquity and Middle Ages as well as in the Indian commune of the present day, in which the traditional organization has not yet been destroyed. The capitalist mode of production completely dissolves this connection. This process may be studied on a large scale during the last third of the 18th century, in England. Brains that had grown up in more or less semi-feudal societies, for instance Herrenschwand, still consider this separation of manufacture from agriculture as a foolhardy social adventure, as an unthinkably risky mode of existence, even as late as the close of the 18th century. And even in the agricultural societies of antiquity, which show the greatest analogy to capitalist agriculture, namely Carthage and Rome, the similiarity with plantation management is greater than with that form which really corresponds to the capitalist mode of exploitation.*137


There existed at one time a formal analogy, which, however, appears as a deception in all essential points to a man familiar with the capitalist mode of production, and who does not, like Mr. Mommsen,*138 discover a capitalist mode of production in every monetary economy. This formal analogy did not exist at all in continental Italy during antiquity, but at best only in Sicily, because this island served as an agricultural tributary for Rome, so that its agriculture was chiefly aimed at export. It was there that tenants of the modern kind existed.


An incorrect conception of the nature of rent is based upon the fact that rent in a natural form, either as tithes to the church, or as a curiosity perpetuated by old contracts, has dragged itself into modern times out of the natural economy of feudal days, quite contrary to the conditions of the capitalist mode of production. This creates the impression that rent does not arise from the price of the agricultural product, but from its mass, not from social conditions, but from the soil. We have shown previously that a surplus product, representing a mere increase in the mass of products, does not constitute any surplus-value, although surplus-value represents itself in a surplus product. A surplus product may represent a minus in value. Otherwise the cotton industry of 1860, compared to that of 1840, would represent an enormous surplus-value, whereas on the contrary the price of the yarn has fallen. The rent may increase enormously through a succession of crop failures, because the price of cereals rises, although this surplus-value is represented by an absolutely decreasing mass of dearer wheat. Vice versa, the rent may fall through a succession of fertile years, because the price falls, although the fallen rent is represented by a greater mass of cheaper wheat.


With regard to rent in kind it should be noted that it is a mere tradition dragged over from an outgrown mode of production and eking out an existence as a ruin. Its contradiction to the capitalist mode of production is shown by the fact that it disappeared from private contracts of its own accord, and that it was shaken off by force as an inconsistency in such instances as the church tithes in England, where legislation was able to step in. Furthermore, where rent in kind continued to exist on the basis of capitalist production, it was nothing else, and could be nothing else, but an expression of money rent in medieval garb. For instance, wheat is quoted at 40 shillings per quarter. One portion of this wheat has to reproduce the wages contained in it, and must be sold in order to be available for renewed expenditure. Another portion must be sold in order to pay its share of the taxes. Seeds and even a part of the manure enter as commodities into the process of reproduction, wherever the capitalist mode of production and division of labor are developed, and they must be bought for the purposes of reproduction. Therefore another portion of this quarter must be sold, in order to get money for these things. To the extent that they do not have to be bought as actual commodities, but are taken in their natural form out of the product, in order to enter once more as means of production into its reproduction—which is done, not only in agriculture, but in many other lines of production which create constant capital—they figure in the accounts as money of account and are thus deducted as component parts of the cost-price. The wear and tear of machinery, and of fixed capital in general, must be made good in money. And finally comes the profit, which is calculated on the basis of this sum of costs expressed either in real or in accounting money. This profit is represented by a definite portion of the gross product, which is determined by its price. The portion which then remains is the rent. If the rent in kind stipulated by contract is greater than this remainder determined by the price, then it is not a rent, but a deduction from the profit. On account of this possibility alone rent in kind is an old form, to the extent that it does not follow the price of the product, but may amount to more or less than the real rent, so that it may not only contain a deduction from the profit, but also from elements required for the reproduction of the capital. In fact, this rent in kind, so far as it is a rent, not merely in name but in essence, is exclusively determined by the excess of the price of the product over, its cost of production. Only it assumes this variable magnitude to be a constant one. But it is such a comforting reflection that the natural product should suffice, in the first place, to maintain the laborer, in the second place, to leave for the capitalist tenant more food than he needs, and finally, that the remainder should form a natural rent. The same fancy is indulged in when a manufacturer of cotton goods produces 200,000 yards of them. These yards are supposed to suffice for the purpose of clothing his laborers, his wife and all his offspring, together with himself abundantly, to leave over some cotton for sale, and besides to pay an enormous rent with cotton goods. The matter is so simple! Deduct the cost of production from 200,000 yards of cotton goods, and a surplus must remain for rent. But it is indeed a naïve conception, to deduct the cost of production of, say, 10,000 pounds sterling from 200,000 yards of cotton, without knowing the selling price, to deduct money from cotton goods, to deduct from a natural use-value an exchange-value, and thus to determine the surplus of yards of cotton goods over pounds of sterling. It is worse than the squaring of the circle, which is at least based upon the conception that there is a boundary at which straight lines and curves flow imperceptibly into each other. But such is the recipe of Mr. Passy. Deduct money from cotton goods, before the cotton goods have been converted into money, either in your head or in reality! What remains is the rent, which, however, is to be grasped tangibly (see for instance, Karl Arnd) and not by deviltries of sophistry. The entire restoration of rent in kind amounts really to this foolishness, to this deduction of the price of production from so and so many bushels of wheat, the subtraction of a sum of money from a cubic measure.

II. Labor Rent.


If we observe ground-rent in its simplest form, that of labor rent, which means that the direct producer cultivates during a part of the week, with instruments of labor (plow, cattle, etc.), actually or legally belonging to him, the soil owned by him in fact, and works during the remaining days upon the estate of the feudal lord, without any compensation from the feudal lord, the proposition is quite clear, for in this case rent and surplus-value are identical. The rent, not the profit, is here the form through which the unpaid surplus labor expresses itself. To what extent the laborer, the self-sustaining serf, can here secure for himself a surplus above his indispensable necessities of life, a surplus above the thing which we would call wages under the capitalist mode of production, depends, other circumstances remaining unchanged, upon the proportion, in which his labor time is divided into labor time for himself and forced labor time for his feudal lord. This surplus above the indispensable requirements of life, the germ of that which appears as profit under the capitalist mode of production, is therefore wholly determined by the size of the ground-rent, which in this case not only is unpaid surplus labor, but also appears as such. It is unpaid surplus labor for the "owner" of the means of production, which here coincide with the land, and so far as they differ from it, are mere accessories to it. That the product of the laboring serf must suffice to reproduce both his subsistence and his requirements of production, is a fact which remains the same under all modes of production. For it is not a result of its specific form, but a natural requisite of all continuous and reproductive labor, of any continued production, which is always a reproduction, including the reproduction of its own labor conditions. It is furthermore evident that in all forms, in which the direct laborer remains the "possessor" of the means of production and labor conditions of his own means of subsistence, the property relation must at the same time assert itself as a direct relation between rulers and servants, so that the direct producer is not free. This is a lack of freedom which may be modified from serfdom with forced labor to the point of a mere tributary relation. The direct producer, according to our assumption, is here in possession of his own means of production, of the material labor conditions required for the realization of his labor and the production of his means of subsistence. He carries on his agriculture and the rural house industries connected with it as an independent producer. This independence is not abolished by the fact that these small farmers may form among themselves a more or less natural commune in production, as they do in India, since it is here merely a question of independence from the nominal lord of the soil. Under such conditions the surplus labor for the nominal owner of the land cannot be filched from them by any economic measures, but must be forced from them by other measures, whatever may be the form assumed by them.*139


This is different from slave or plantation economy, in that the slave works with conditions of labor belonging to another. He does not work as an independent producer. This requires conditions of personal dependence, a lack of personal freedom, no matter to what extent, a bondage to the soil as its accessory, a serfdom in the strict meaning of the word. If the direct producers are not under the sovereignty of a private landlord, but rather under that of a state which stands over them as their direct landlord and sovereign, then rent and taxes coincide, or rather, there is no tax which differs from this form of ground-rent. Under these circumstances the subject need not be politically or economically under any harder pressure than that common to all subjection to that state. The state is then the supreme landlord. The sovereignty consists here in the ownership of land concentrated on a national scale. But, on the other hand, no private ownership of land exists, although there is both private and common possession and use of land.


The specific economic form, in which unpaid surplus labor is pumped out of the direct producers, determines the relation of rulers and ruled, as it grows immediately out of production itself and reacts upon it as a determining element. Upon this is founded the entire formation of the economic community which grows up out of the conditions of production itself, and this also determines its specific political shape. It is always the direct relation of the owners of the conditions of production to the direct producers, which reveals the innermost secret, the hidden foundation of the entire social construction, and with it of the political form of the relations between sovereignty and dependence, in short, of the corresponding form of the state. The form of this relation between rulers and ruled naturally corresponds always with a definite stage in the development of the methods of labor and of its productive social power. This does not prevent the same economic basis from showing infinite variations and gradations in its appearance, even though its principal conditions are everywhere the same. This is due to innumerable outside circumstances, natural environment, race peculiarities, outside historical influences, and so forth, all of which must be ascertained by careful analysis.


So much is evident in the case of labor rent, the simplest and most primitive form of rent: The rent is here the original form of surplus-value and coincides with it. Furthermore, the identity of surplus-value with unpaid labor of others does not need to be demonstrated by any analysis in this case, because it still exists in its visible, palpable form, for the labor of the direct producer for himself is still separated by space and time from his labor for the landlord, and this last labor appears clearly in the brutal form of forced labor for another. In the same way the "quality" of the soil to produce a rent is here reduced to a tangibly open secret, for the nature which here furnishes the rent also includes the human labor-power bound to the soil, and the property relation which compels the owner of labor-power to exert this quality and to keep it busy beyond the measure required for the satisfaction of his own material needs. The rent consists directly in the appropriation, by the landlord, of this surplus expenditure of labor-power. For the direct producer pays no other rent. Here, where surplus-value and rent are not only identical, but where surplus-value obviously has the form of surplus labor, the natural conditions, or limits, of rent lie on the surface, because those of surplus-value do. The direct producer must, 1), possess enough labor-power, and 2), the natural conditions of his labor, which means in the first place the soil cultivated by him, must be productive enough, in one word, the natural productivity of his labor must be so great that the possibility of some surplus labor over and above that required for the satisfaction of his own needs shall remain. It is not this possibility which creates the rent. The rent is not created until compulsion makes a reality of this possibility. But the possibility itself is conditioned upon subjective and objective facts of nature. And there is nothing mysterious about it. If the labor-power is small, and the natural conditions of labor poor, then the surplus labor is small, but so are in that case the wants of the producers on one side and the relative numbers of the exploiters of surplus labor on the other, and so is finally the surplus product, by which this little productive surplus labor is represented for those few exploiting land owners.


Finally, labor rent implies in itself that, all other circumstances remaining equal, it will depend wholly upon the relative amount of surplus labor, or forced labor, to what extent the direct producer shall be enabled to improve his own condition, to acquire wealth, to produce a surplus over and above his indispensable means of subsistence, or, if we wish to anticipate the capitalist mode of expression, whether he shall be able to produce a profit for himself, and how much of a profit, meaning a surplus over the wages produced by himself. The rent is here the normal, all absorbing, one might say legitimate, form of surplus labor. So far from being a surplus over the profit, which means in this case in excess of any other surplus over the wages, it is rather the amount of profit, and even its very existence, which depends, other circumstances being equal, upon the amount of rent, or upon the forced surplus labor to be surrendered to the landlord.


Some historians have expressed astonishment that it should be possible for the forced laborers, or serfs, to acquire any independent property, or relatively speaking, wealth, under such circumstances, since the direct producer is not an owner, but only a possessor, and since all his surplus labor belongs legally to the landlord. However, it is evident that tradition must play a very powerful role in the primitive and undeveloped circumstances, upon which this relation in social production and the corresponding mode of production are based. It is furthermore clear that here as everywhere else it is in the interest of the ruling section of society to sanction the existing order as a law and to perpetuate its habitually and traditionally fixed limits as legal ones. Aside from all other matters, this comes about of itself in proportion as the continuous reproduction of the foundation of the existing order and of the relations corresponding to it gradually assume a regulated and orderly form. And such regulation and order are themselves indispensable elements of any mode of production, provided that it is to assume social firmness and an independence from mere accident and arbitrariness. It is just through them that society is rendered more firm and emancipated relatively from mere arbitrariness and mere accident. Society assumes this form by the repeated reproduction of the same mode of production, where the process of production stagnates and with it the corresponding social relations. If this continues for some time, this order fortifies itself by custom and tradition and is finally sanctioned as an expressed law. Since the form of this surplus labor, of forced labor, rests upon the imperfect development of all productive powers of society, and upon the crudeness of the methods of labor itself, it will naturally absorb a much smaller portion, relatively, of the total labor of the direct producers than under developed modes of production, particularly under the capitalist mode of production. Take it, for instance, that the forced labor for the landlord originally amounted to two days per week. These two days of forced labor are fixed, are a constant magnitude, legally regulated by laws of usage or written laws. But the productivity of the remaining days of the week, over which the direct producer has independent control, is a variable magnitude, which must develop in the course of his experience, together with the new wants he acquires, together with the expansion of the market for his product, together with the increasing security which guarantees independence for this portion of his labor-power. These things will spur him on to a greater exertion of his labor-power, and it must not be forgotten that the employment of his labor-power is by no means confined to agriculture, but includes rural house industry. The possibility of a certain economic development, depending, of course, upon the favor of circumstances, upon inborn race characteristics, etc., is open in this case.

III. Rent in Kind.


The transformation of labor rent into rent in kind does not change anything in the nature of rent, economically speaking. This nature, in the forms of rent considered here, is such that rent is the sole prevailing and normal form of surplus labor, or surplus-value. This, again, expresses the fact that rent is the only surplus labor, or the only surplus product which the direct producer, being in possession of the labor conditions needed for his own reproduction, must give up to the owner of the land, which under this state of things is the one condition of labor embracing everything. And furthermore it expresses the fact that land is the only labor condition, which stands opposed to the direct producer as a property independent of him and held in the hands of another, being personified by the landlord. To the extent that rent in kind is the prevailing and dominant form of ground-rent, it is always more or less in the company of survivals of the preceding form, that is of rent paid directly by labor, forced labor, no matter whether the landlord be a private person or the state. Rent in kind requires a higher state of civilization for the direct producer, a higher stage of development of his labor and of society in general. And it is distinguished from the preceding form by the fact that the surplus labor is no longer performed naturally, is no longer performed under the direct supervision and compulsion of the landlord or of his representatives. The direct producer is rather driven by the force of circumstances than by direct coercion, rather by legal enactment than by the whip, to perform surplus labor on his own responsibility. Surplus production, in the sense of a production beyond the indispensable needs of the direct producer, and within the field of production actually in his own possession, upon the soil exploited by himself and no longer upon the lord's estate outside of his own land, has become a matter of fact rule here. In this relation the direct producer is more or less master of the employment of his whole labor time, although a part of this labor time, at first practically the entire surplus portion of it, belongs to the landlord without any compensation. Only, the landlord does not get this surplus labor any more in its natural form, but rather in the natural form of the product in which it is realized. The burdensome interruption by the labor for the landlord (see Volume I, chapter X, 2, Manufacturer and Boyard), which disturbs the reproduction of the serf more or less, according to the way in which forced labor is regulated, disappears, wherever rent in kind has its pure form, or at least it is reduced to a few short intervals during the year, which demand a continuation of rent by forced labor by the side of rent in kind. The labor of the producer for himself and his labor for the landlord are no longer palpably separated by time and space. This rent in kind, in its pure form, while it may drag itself along sporadically into more highly developed modes of production and conditions of production, nevertheless requires for its existence a natural economy, that is an economy in which the conditions of production are either wholly or for the overwhelming part produced by the system itself in such a way that they are reproduced directly out of its gross product. It furthermore requires the combination of domestic rural industry with agriculture. The surplus product, which forms the rent, is the product of this combined agricultural and industrial family labor, no matter whether rent in kind contains more or less of the industrial product, as it often does in the middle ages, or whether it is paid only in the form of actual products of the soil. In this form of rent it is by no means necessary that rent in kind, which represents the surplus labor, should fully exhaust the entire surplus labor of the rural family. Compared to labor rent, the producer rather has more elbow room to gain time for some surplus labor whose product shall belong to himself, as does that of the labor which produces his indispensable means of subsistence. This form will also give rise to greater differences in the economic situation of the individual direct producers. At least the possibility for such a differentiation exists, and so does the possibility that the direct producer may have acquired the means to exploit other laborers for himself, but this does not concern us here, since we are dealing with rent in its pure form. Neither can be pay any heed to the endless variety of combinations, by which the various forms of rent may be united, adulterated and amalgamated.


Owing to the peculiar form of rent in kind, by which it is bound to a definite kind of products and of production, owing furthermore to the indispensable combination of agriculture and domestic industry attached to it, also to the almost complete selfsufficiency in which the peasant family supports itself and to its independence from markets and from the movement of production and history in the social spheres outside of it, in short owing to the character of natural economy in general this form is quite suitable for becoming the basis of stationary conditions of society, such as we see in Asia. Here, as previously in the form of labor rent, ground-rent is the normal form of surplus-value, and thus of surplus labor, that is of the entire surplus labor performed without any equivalent by the direct producer for the benefit of the owner of his essential means of production, the land, a labor which is still performed under compulsion, although no longer in the old brutal form. The profit, if, falsely anticipating, we may so call that portion of the direct producer's labor which exceeds his necessary labor and which he keeps for himself, has so little to do with determining the rent in kind, that this profit rather grows up behind the back of the rent and finds its natural limit in the size of the rent in kind. This rent may assume dimensions which seriously threaten the reproduction of the conditions of labor, of the means of production. It may render an expansion of production more or less impossible, and grind the direct producers down to the physical minimum of means of subsistence. This is particularly the case, when this form is met and exploited by a conquering industrial nation, as India is by the English.

IV. Money Rent.


By money rent we mean here—for the sake of distinction from the industrial and commercial ground-rent resting upon the capitalist mode of production, which is but a surplus over the average profit—that ground-rent which arises from a mere change of form of rent in kind, just as this rent in kind, in its turn, is but a modification of labor rent. Under money rent, the direct producer no longer turns over the product, but its price, to the landlord (who may be either the state or a private individual). A surplus of products in their natural form is no longer sufficient; it must be converted from its natural form into money. Although the direct producer still continues to produce at least the greater part of his means of subsistence himself, a certain portion of this product must now be converted into commodities, must be produced as commodities. The character of the entire mode of production is thus more or less changed. It loses its independence, it remains no longer detached from the social connections. The proportion of the cost of production, which now is more and more complicated with the expenditure of money, now becomes a determining factor. At any rate, the excess of that portion of the gross product, which must be converted into money, over that portion, which has to serve either as means of reproduction or as means of direct subsistence, assumes a determining role. However, the basis of this rent remains the same as that of the rent in kind, from which it starts, although money rent likewise approaches its dissolution. The direct producer still is the possessor of the land, either by inheritance or by some other traditional right, and he has to perform for his landlord, who is the owner of the land, of his most essential instrument of production, forced surplus labor, that is, unpaid labor for which no equivalent is returned, and this forced surplus labor is now paid in money obtained by the sale of the surplus product. The property in requirements of labor separate from the land, such as agricultural implements and other movable things, is transformed into the property of the direct producer even under the preceding form of rent, first in fact, then legally, and this is the condition even more under money rent. The transformation of rent in kind into money rent, taking place first sporadically, then on a more or less national scale, requires a considerable development of commerce, of city industries, of the production of commodities in general, and with them of the circulation of money. It furthermore requires that products should have a market price, and that they are sold more or less approximately at their values, which need not necessarily be the case under the preceding forms. In the East of Europe we may still see in a certain measure this transformation with our own eyes. How little it can be carried through without a certain development of the social productivity of labor, is proved by various unsuccessful attempts to carry it through under the Roman emperors, and by relapses into rent in kind after the attempt had been made to convert at least that portion of rent in kind into a money rent which had to be paid as a state tax. The same difficulties of transition are shown, for instance, by the prerevolutionary time in France, when money rent was combined and adulterated by survivals of the forms preceding it.


Money rent, as a converted form of rent in kind and as an antagonist of rent in kind, is the last form, and the dissolving form, of that form of ground-rent, which we have considered so far, namely of ground-rent, which we have considered so far, namely of ground-rent as the normal form of surplus-value and of the unpaid surplus labor to be performed for the owner of the means of production. In its pure form, this rent, like labor rent and rent in kind, does not represent any surplus above the profit. It absorbs the profit, as it is understood. To the extent that profit arises in fact as a separate portion of the surplus labor by the side of the rent, money rent as well as rent in its preceding forms still is the normal barrier of such embryonic profit, which can only develop in proportion as the possibility of exploitation grows, whether it be the producer's own surplus labor or the surplus labor of another, which remains after the surplus represented by money rent has been paid. If any profit actually arises along with this rent, this profit is not a barrier of rent, but the rent is rather a barrier of this profit. However, we repeat that money rent is at the same time the disappearing form of the rent which we have considered so far, of that rent which is identical with surplus-value and surplus labor, of ground-rent as the normal and prevailing form of surplus-value.


In its further development money rent must lead—aside from all intermediate forms, such as that of the small peasant who is a tenant—either to the transformation of land into independent peasants' property, or into the form corresponding to the capitalist mode of production, that is, to rent paid by the capitalist tenant.


With the coming of money rent the traditional and customary relation between the landlord and the subject tillers of the soil, who possess and cultivate a part of the land, is turned into a pure money relation fixed by the rules of positive law. The cultivating possessor thus becomes virtually a mere tenant. This transformation serves on the one hand, provided that other general conditions of production permit such a thing, to expropriate gradually the old peasant possessors and to put in their place capitalist tenants. On the other hand it leads to a release of the old possessors from their tributary relation by buying themselves free from their landlord, so that they become independent farmers and free owners of the land tilled by them. The transformation of rent in kind into money rent is not only necessarily accompanied, but even anticipated by the formation of a class of propertyless day laborers, who hire themselves out for wages. During the period of their rise, when this new class appears but sporadically, the custom necessarily develops among the better situated tributary farmers of exploiting agricultural laborers for their own account, just as the wealthier serfs in feudal times used to employ serfs for their own benefit. In this way they gradually acquire the ability to accumulate a certain amount of wealth and to transform themselves even into future capitalists. The old selfemploying possessors of the land thus give rise among themselves to a nursery for capitalist tenants, whose development is conditioned upon the general development of capitalist production outside of the rural districts. This class grows very rapidly, when particularly favorable circumstances come to its aid, as they did in England in the 16th century, where the progressive depreciation of money made them rich, under the customary long leases, at the expense of the landlords.


Furthermore: As soon as rent assumes the form of money rent, and with it the relation between rent paying peasants and landlords becomes a relation fixed by contract—a development which is not possible unless the world market, commerce and manufacture have reached a relatively high level—the leasing of land to capitalists necessarily also puts in its appearance. These men, having stood outside of the rural barrier so far, now transfer to the country and to agriculture some capital acquired in the cities and with it the capitalist mode of production as developed in those cities, which implies the creation of the product in the form of a mere commodity and as a mere means of appropriating surplus-value. This form can become the general rule only in those countries, which dominate the world market in the period of transition from the feudal to the capitalist mode of production. When the capitalist tenant steps between the landlord and the actually working tiller of the soil, all conditions have been dissolved, which arose from the old rural mode of production. The capitalist tenant becomes the actual commander of these agricultural laborers and the actual exploiter of their surplus labor, whereas the landlord has any direct relations only with this capitalist tenant, the relation being a mere money relation fixed by contract. This transforms also the nature of the rent, not merely in fact and accidentally, as it did sometimes even under the preceding forms, but normally, by transforming its acknowledged and prevailing mode. Instead of continuing as the normal form of surplus-value and surplus labor, it becomes a mere surplus of this surplus labor over that portion of it, which is appropriated by the exploiting capitalist in the form of profit. And now the total surplus labor, both profit and surplus above the profit, are extracted by him directly, appropriated in the form of the surplus product, and turned into money. It is only the surplus portion of the surplus-value extracted by him from the agricultural laborer by direct exploitation, by means of his capital, which he turns over to the landlord as rent. How much or how little he gives away to him depends, as a rule, upon the limits set by the average profit which is realized by the capital in the non-agricultural spheres of production, and by the non-agricultural prices of production regulated by this average profit. From a normal form of surplus-value and surplus labor the rent has now transformed itself into a surplus peculiar to the agricultural sphere of production, exceeding that portion of the surplus labor, which is claimed at first hand by capital as its legitimate and normal share. Profit, instead of rent, has now become the normal form of surplus-value, and rent exists only as a form, not of surplus-value in general, but of one of its offshoots, called surplus profit, which assumes an independent existence only under very peculiar circumstances. It is not necessary to dwell any further upon the way in which this transformation is accompanied by a gradual transformation of the mode of production itself. This is shown by the mere fact that it is the normal thing for the capitalist tenant to produce the products of the soil as commodities, and that, while formerly only the surplus over his means of subsistence was converted into commodities, now but a relatively small part of these commodities is directly used as means of subsistence for him. It is no longer the land, but the capital, which has now brought under its direct sway and under its own productivity the labor of the agriculturalist.


The average profit and the price of production regulated by it are formed outside of the conditions of the rural country within the circles of city commerce and manufacture. The profit of the rent-paying farmers does not enter into it as a balancing element, for their relation to the landlord is not a capitalist one. To the extent that he makes profits, that is, realizes a surplus above his necessary means of subsistence, either by his own labor or by the exploitation of other people's labor, it is done behind the back of the normal relationship. Other circumstances being equal, the size of this profit does not determine the rent, but on the contrary, it is determined by the limits set by the rent. The high rate of profit in the Middle Ages is not entirely due to the low composition of the capital, in which the variable capital, invested in wages, predominates. It is due also to the robbery committed against the land, the appropriation of a portion of the landlord's rent and of the income of his vassals. While the country exploits the town politically in the Middle Ages, wherever feudalism has not been broken down by an exceptional development of the towns, the town, on the other hand, everywhere and without exception exploits the land economically by its monopoly prices, its system of taxation, its guild organizations, its direct mercantile fraud and its usury.


One might imagine that the mere advent of the capitalist tenant in agricultural production would prove that the price of those products of the soil, which had always paid a rent in one form or another, must stand above the prices of production of manufacture, at least at the time of this advent. And this for the reason that the price of such products of the soil had reached the level of a monopoly price or that it had risen as high as the value of the products of the soil, and that this value actually stood above the price of production regulated by the average profit. Unless this were so, the capitalist tenant could not very well realize first the average profit out of the price of these products, at the existing prices of the products of the soil, and then pay out of this same price a surplus above his profit in the form of rent. One might conclude from this that the average rate of profit, which guides the capitalist tenant in his contract with the landlord, had been formed without including the rent, and that as soon as this average rate of profit assumes a regulating part in agricultural production it finds this surplus ready at hand and turns it over to the landlord. It is in this traditional manner that, for instance, Rodbertus explains this matter.


But several points must be considered here.


1) This advent of capital as an independent and leading power in agriculture does not take place generally all at once, but gradually and separately in various lines of production. It seizes at first, not agriculture proper, but such lines of production as cattle raising, especially sheep raising, whose principal product, wool, offers a steady surplus of the market price over the price of production during the rise of industry, and this is not balanced until later. This was the case in England during the 16th century.


2) Since this capitalist production appears at first but sporadically, nothing can be argued against the assumption, that it takes hold in the beginning only of such groups of land as are able, through their particular fertility, or their exceptionally favorable location, to pay a differential rent in the long run.


3) Even assuming that at the time of the advent of this mode of production, which indeed requires an increasing preponderance of the demand in the towns, the prices of the products of the soil stood higher than the price of production, as was doubtless the case during the last third of the 17th century in England, nevertheless, as soon as this mode of production will have worked its way somewhat out of the mere subordination of agriculture to capital, and as soon as the improvement of agriculture and the reduction of its cost of production, which accompany its development, will have taken place, the balance will be restored by a reaction, a fall in the price of the products of the soil, as happened in the first half of the 18th century in England.


In this traditional way, then, rent as a surplus above the average profit cannot be explained. Whatever may be the historical circumstances of the time in which rent appears at first, once that it has taken root it cannot exist under any other modern conditions than those previously explained.


Finally, it should be noted in the transformation of rent in kind into money rent, that with it capitalized rent, or the price of land, and its salableness and sale become essential elements, and that with them not only the formerly rent-paying tenant may be transformed into an independent peasant proprietor, but also urban and other moneyed people may buy real estate, in order to lease them either to peasants or to capitalists and thus to enjoy rent in the form of interest on capital so invested; that, therefore, this likewise assists in the transformation of the former mode of exploitation, of the relation between the owner and the actual tiller of the land, and of the rent itself.

V. Share Farming (Metairie System) and Small Peasants' Property.


We have now arrived at the end of our line of development of ground-rent.


In all these forms of ground-rent, whether labor rent, rent in kind, or money rent (as a mere change of form of rent in kind), the rent-paying party is always supposed to be the actual tiller and possessor of the land, whose unpaid surplus labor passes directly into the hands of the landlord. Even in the last form, money rent—to the extent that it is "pure," in other words, a mere change of form of rent in kind—this is not only possible, but actually takes place.


As a form of transition from the original form of rent to capitalist rent, we may consider the metairie system, or share farming, under which the manager (tenant) furnishes not only labor (his own or that of others), but also a portion of the first capital, and the landlord furnishes, aside from the land, another portion of the first capital (for instance cattle), and the product is divided between the tenant and the landlord according to definite shares, which differ in various countries. In this case, the tenant lacks the capital required for a thorough capitalist operation of agriculture. On the other hand, the share thus appropriated by the landlord has not the pure form of rent. It may actually include interest on the capital advanced by him and a surplus rent. It may also absorb practically all the surplus labor of the tenant, or leave to him a greater or smaller portion of this surplus labor. But the essential point is that rent no longer appears here as the normal form of surplus-value in general. On the one hand, the tenant, whether he employ his own labor or another's, is supposed to have a claim upon a portion of the product, not in his capacity as a laborer, but as a possessor of a part of the instruments of labor, as his own capitalist. On the other hand, the landlord claims his share not exclusively in his capacity as the owner of the land, but also as a lender of capital.*140


A remainder of the old community in land, which had been preserved after the transition to independent peasant economy, for instance in Poland and Roumania, served there as a subterfuge for accomplishing a transition to the lower forms of ground-rent. A portion of the land belongs to the individual farmers and is tilled independently by them. Another portion is tilled collectively and creates a surplus product, which serves either for the payment of community expenses, or as a reserve in case of crop failures, etc. These last two parts of the surplus product, and finally the whole surplus product together with the land, upon which it has been grown, are gradually usurped by state officials and private individuals, and by this means the originally free peasant proprietors, whose obligation to till this land collectively is maintained, are transformed into vassals, who are compelled to perform forced labor or pay rent in kind, while the usurpers are transformed into owners, not only of the stolen community lands, but of the lands of the peasants themselves.


We need not dwell upon actual slave economy (which likewise passes through a development from the patriarchal system, working pre-eminently for home use, to the plantation system, working for the world market) nor upon that management of estates, under which the landlords carry on agriculture for their own account, own all the instruments of production, and exploit the labor of free or unfree servants, who are paid in kind or in money. In this case, the landlord and the owner of the instruments of production, and thus the direct exploiter of the laborers counted among these instruments of production, are one and the same person. Rent and profit likewise coincide then, there being no separation of the different forms of surplus-value. The entire surplus labor of the workers, which is here represented by the surplus product, is extracted from them directly by the owner of all the instruments of production, to which the land and, under the original form of slavery, the producers themselves, belong. Where capitalist conceptions predominate, as they did upon the American plantations, this entire surplus-value is regarded as profit. In places where the capitalist mode of production does not exist, nor the conceptions corresponding to it have been transferred from capitalist countries, it appears as rent. At any rate, this form does not present any difficulties. The income of the landlord, whatever may be the name given to it, the available surplus product appropriated by him, is here the normal and predominating form, under which the entire unpaid labor is directly appropriated, and the property in land forms the basis of this appropriation.


There is, furthermore, the small peasants' property. Here the farmer is the free owner of his land, which appears as his principal instrument of production, the indispensable field of employment for his labor and his capital. No lease money is paid under this form. Rent, therefore, does not appear as a separate form of surplus-value here, although in countries, in which capitalist industry in other lines is developed, it appears as a surplus profit by comparison with other lines of production. But it is a surplus profit which, like all the rest of the product of his labor, falls into the hands of the farmer himself.


This form of property in land requires that, as was the case under the earlier forms, the rural population should have a great preponderance over the city population, so that, while capitalist production may generally prevail, it is nevertheless but relatively little developed, concentration of capitals moves in narrow circles in the other lines of production, and dissipation of capitals predominates. Under these conditions, the greater part of the rural product will have to be consumed, as a direct means of subsistence, by the producers, the farmers themselves, and only the surplus above that will pass as commodities into the commerce with the cities. Whatever may be the manner, in which the average market price of the products of the soil is regulated in this case, the differential rent, a surplus portion of the price of commodities from the superior or more favorably located lands, must evidently exist in this case just as it does under the capitalist mode of production. This differential rent would exist, even if this form should appear under social conditions, in which no general market price has as yet been developed. It appears then in the spare surplus product. Only it flows into the pocket of the farmer, whose labor realises itself under favorable natural conditions. It is precisely under this form that the assumption is correct, as a rule, that no absolute rent exists, so that the worst soil does not pay any rent. For under this form the price of land enters as an element into the actual cost of production for the farmer, since in the course of the further development of this form the price of land may have been figured, for instance in the case of a division of an estate, at a certain money value, or, in view of the continuous change in the ownership of the whole property, or of its parts, the land may have been bought by the tiller himself, largely by taking up money on a mortgage. In this way the price of land, which is nothing else but a capitalized rent, is a pre-existing condition and rent seems to exist independently of any differentiation in the fertility and location of the land. Absolute rent is conditioned either upon the realized surplus of the value of the product above its price of production, or a monopoly price exceeding the value of the product. But since agriculture is carried on here largely as an agriculture for direct subsistence, so that the land is an indispensable field of employment for the labor and capital of the majority of the population, the regulating market price of the product will come up to its value only under extraordinary circumstances. But its value will, as a rule, stand higher than its price of production on account of the predominance of the element of living labor, although this excess of its value over its price of production will be in its turn limited by the low composition of the capital, even of that of the industries outside of agriculture, in countries with a predominance of small farmers' property. For the small farmer the limit of exploitation is not set by the average profit of the capital, if he is a small capitalist, nor by the necessity of making a rent, if he is a landowner. Nothing appears as an absolute limit for him, as a small capitalist, but the wages which he pays to himself, after deducting his actual costs. So long as the price of the product covers these wages, he will cultivate his land, and will do so often down to the physical minimum of his wages. As for his capacity as a landlord, the barrier of property is eliminated in his case, since it can exert its influence only against a capital (including labor) separated from it, by erecting an obstacle against its investment. It is true that interest on the price of land, which generally has to be paid to another, the holder of the mortgage, also forms a barrier. But this interest can be paid out of that portion of the surplus labor, which would form the profit under capitalist conditions. The rent anticipated in the price of land, and in the interest paid for it, cannot be anything else but a portion of the capitalized surplus labor of the farmer, performed by him beyond the labor indispensable for his subsistence, without realising this surplus labor in a part of the value of commodities equal to the entire average profit, and still less in a surplus profit, which would constitute a surplus above the surplus labor realised in the average profit. The rent may be a deduction from the average profit, or even the only portion of it which is realised. In order that the small farmer may cultivate his land, or may buy land for cultivation, it is therefore not necessary, as it is under a normal capitalist production, that the market price of his products should rise high enough to allow him the average profit, and still less a surplus above this average profit fixed in the form of a rent. Therefore it is not necessary that the market price should rise, either as high as the value or as high as the price of production of his product. This is one of the causes which keeps the price of cereals lower in countries with a predominance of small farmers than in countries with a capitalist mode of production. One portion of the surplus labor of the farmers, who work under the least favorable conditions, is given to society without an equivalent and does not pass over into the regulation of the price of production or into the formation of values in general. This lower price is also a result of the poverty of the producers and by no means of the productivity of their labor.


This form of free farmers' property managing their own affairs, as the prevailing, normal, form constitutes on the one hand the economic foundation of society during the best times of classical antiquity, on the other hand it is found among modern nations as one of the forms arising from the dissolution of feudal landlordism. In this way we meet the yeomanry in England, the peasantry in Sweden, the farmers in France and Western Germany. We do not mention the colonies here, since the independent farmer there develops under different conditions.


The free ownership of the selfemploying farmer is evidently the most normal form of landed property for small scale production, that is, for a mode of production, in which the possession of the land is a prerequisite for the ownership of the product of his own labor by the laborer, and in which the agriculturist, whether he be a free owner or a vassal, always has to produce his own means of subsistence independently, as a single laborer with his family. The ownership of the soil is as necessary for the complete development of this mode of production as the ownership of the instrument is for the free development of handicraft production. This ownership forms here the basis for the development of personal independence. It is a necessary stage of transition for the development of agriculture itself. The causes which bring about its downfall show its limitations. These causes are: Destruction of rural house industries, which form its normal supplement, as a result of the development of great industries; a gradual deterioration and exhaustion of the soil subjected to this cultivation; usurpation, on the part of the great landlords, of the community lands, which form everywhere the second supplement of small peasants' property and alone enable them to keep cattle; competition, either of plantation systems or of great agricultural enterprises carried out on a capitalist scale. Improvements of agriculture, which on the one hand bring about a fall in the prices of the products of the soil, and on the other require greater investments and more diversified material conditions of production, also contribute towards this end, as they did in England during the first half of the 18th century.


Small peasants' property excludes by its very nature the development of the social powers of production of labor, the social forms of labor, the social concentration of capitals, cattle raising on a large scale, and a progressive application of science.


Usury and a system of taxation must impoverish it everywhere. The expenditure of capital in the price of the land withdraws this capital from cultivation. An infinite dissipation of means of production and an isolation of the producers themselves go with it. Also an enormous waste of human energy. A progressive deterioration of the conditions of production and a raising of the price of means of production is a necessary law of small peasants' property. Fertile seasons are a misfortune for this mode of production.*141


One of the specific evils of small scale agriculture, when combined with the free ownership of the land, arises from the fact that the agriculturist invests a capital in the purchase of the land. (The same applies also to the form of transition, in which the great landlord invests capital, first, for the purpose of buying land, and secondly, for the purpose of managing it as his own tenant). Owing to the changeable nature, which the land here assumes as a mere commodity, the changes of ownership increase,*142 so that the land, from the point of view of the farmer, passes again into the calculation as a new investment of capital with every new generation, every division of estates, in other words, that it becomes land bought by him. The price of land here forms an overwhelming element of the individual false cost of production, or of the cost price of the product for the individual producer.


The price of land is nothing but the capitalized, and therefore anticipated, rent. If agriculture is carried on by capitalist methods, so that the landlord receives only the rent, and the tenant pays nothing for the land except his annual rent, then it is evident that the capital invested by the owner of the land himself in the purchase of the land constitutes an interest-bearing investment of capital for him, but that it has nothing to do with the capital invested in agriculture itself. It forms neither a part of the fixed nor of the circulating capital employed here;*143 it merely secures for the buyer a title to the annual rent, but has nothing to do with the production of the rent itself. For the buyer of land pays his capital out to the one who sells the land, and the seller relinquishes his ownership of the land for this consideration. This capital does not exist any more as the capital of the buyer after that. He has not got it any longer. Therefore it does not belong to the capital, which he can invest in any way in the land itself. Whether he bought the land at a high or a low price, or whether he received it for nothing, does not alter anything in the capital invested by the tenant in his establishment, and does not make any change in the rent, but merely changes the question, whether it appears to him as interest or not as interest, or as a high or a low interest.


Take, for instance, the slavery system. The price paid for a slave is nothing but the anticipated and capitalized surplus-value or profit, which is to be ground out of him. But the capital paid for the purchase of a slave does not belong to the capital, by which profit, surplus labor, is extracted from him. On the contrary. It is capital, which the slave holder gives away, it is a deduction from the capital, which he has available for 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 the fact, that it does not come back into existence for the slave holder or the land owner, until he sells the slave or the land once more. Then the same condition of things holds good for the buyer. The fact that he has bought the slave does not enable him to exploit the slave without further ceremony. He is not able to do so until he invests some other capital in production by means of the slave.


The same capital does not exist twice. It does not exist one time in the hands of the seller, and a second time in the hands of the buyer of the land. It passes from the hands of the buyer to those of the seller, and that settles the matter. The buyer has then no longer any capital, but in its stead he has a piece of land. The fact that the rent produced by a real investment of capital in this land is figured by the new owner of the land as interest on a capital, which he did not invest in the soil, but gave away as a purchase price for the land, does not alter the economic nature of the factor land in the least, any more than the fact that some one may have paid 1,000 pounds sterling for 3% consols has anything to do with the capital, out of whose revenue the interest on the national debt is paid.


In fact, the money expended in the purchase of land, like that spent for the purchase of national bonds, is merely capital in itself, just as any amount of values is capital in itself on the basis of capitalist production. It is potential capital. The thing paid for the land, like that paid for national bonds or any other purchased commodity, is a sum of money. This is capital in itself, because it may be converted into capital. It depends upon the use to which the seller puts it, whether the money obtained by him really becomes capital or not. For the buyer it can never again perform the functions of capital, any more than any other money which he has finally spent. It figures in his calculations as interest-bearing capital, because he considers the income, which he receives as rent from his land or as interest on his bonds, as interest on the money, which he paid for his title to this revenue. He cannot realise it as capital unless he sells his title again. If he does, then the new buyer assumes the same relationship in which the old one was, and the money spent in this transaction cannot transform itself into actual capital by any change of hands.


In the case of small property in land the illusion, that the land itself has value and may, therefore, pass as a capital into the price of production of the product, like a machine or raw materials, fortifies itself still more. But we have seen that the rent, and with it capitalised rent, or the price of land, can pass over into the price of the products of the soil in two cases only. The first case is that, in which the value of the products of the soil stands higher than their price of production and the market conditions enable the landlord to realise this difference; this condition of values and prices of production obtains, when the composition of the agricultural capital raises the value above the price of production. This agricultural capital has nothing to do with the capital invested in the purchase of the land. The second case is that in which a monopoly price exists. And both cases occur less under small peasants' property and small land ownership than under any other form, because production largely satisfies the producers' own wants in their case and is carried on independently of the regulation by the average rate of profit. Even where small peasants' economy is carried on upon leased land, the lease money comprises more than under any other conditions a portion of the profit and even a deduction from the wages; this money is then only a nominal rent, not a rent representing an independent category as compared to wages and profit.


The expenditure of money-capital for the purchase of land, then, is not an investment of agricultural capital. It is a proportionate deduction from the capital, which the small farmers can employ in their own sphere of production. It reduces to that extent the size of their means of production and thereby narrows the economic basis of their reproduction. It subjects the small farmer to the money lender's extortion, since credit, in the strict meaning of the term, occurs but rarely in this sphere. It is an obstacle to agriculture, even where such a purchase takes place in the case of large estates. In fact, it contradicts the capitalist mode of production, which is on the whole indifferent to the question whether the land-owner is in debt, no matter whether he inherited or bought his estate. The management of the leased estate itself is not altered in its nature, whether the landowner pockets the rent himself or whether he has to pay it over to the holder of his mortgage.


We have seen that the price of land is regulated by the rate of interest, if the ground-rent is a given magnitude. If the rate of interest is low, then the price of land is high, and vice versa. Normally, then, a high price of land and a low rate of interest would have to go hand in hand, so that if the farmer paid a high price for the land in consequence of a low rate of interest, the same low rate of interest should also secure for him his running capital on easy terms of credit. But in reality, things turn out differently under small peasants' property, as the prevailing form. In the first place, the general laws of credit do not apply to the farmer, since these laws rest upon the capitalist as a producer. In the second place, where small peasants' property predominates—we are not speaking of colonies here—and the small peasant forms the foundation of the nation, the formation of capital, that is social reproduction, is relatively weak, and the formation of loanable money-capital, in the sense in which we have previously analyzed this term, is still weaker. For this is conditioned upon concentration and the existence of a class of rich and idle capitalists (Massie). In the third place, where the ownership of the land is a necessary condition for the existence of the greater part of the producers, as it is here, and an indispensable field of investment for their capital, the price of land is raised independently of the rate of interest, and often in an inverse ratio to it, by the preponderance of the demand for land over its supply. If sold in small lots, the land in this case brings a far higher price than it does by its sale in large estates, because the number of small buyers is large and that of the large buyers small (Bandes Noires, Rubichon; Newman). For all these reasons the price of land rises here while the rate of interest is relatively high. The relatively low interest, which the farmer here derives from the capital invested in the purchase of land (Mounier), corresponds on the other hand to the high rate of interest exacted by usury, which he himself has to pay to his mortgage creditors. The Irish system shows the same thing, only in another form.


This price of land, an element foreign in itself to production, may here rise to such a point that it makes production impossible (Dombasle).


The fact that the price of land plays such a role, that the sale and purchase of land, the circulation of land as a commodity, develops to this degree, is a practical result of capitalist development, since a commodity is here the form generally assumed by all products and all instruments of production. On the other hand, this development takes place only wherever capitalist production develops but to a limited extent and does not bring forth all its peculiarities. For this condition rests precisely upon the fact that agriculture is no longer, or not yet, subject to the capitalist mode of production, but rather to a mode handed down from obsolete forms of society. The disadvantages of the capitalist mode of production, which makes the producers dependent upon the money price of their products, coincide here with the disadvantages due to the imperfect development of capitalist production. The farmer becomes a merchant and an industrial without the conditions which would enable him to produce his goods as commodities.


The conflict between the price of land, as an element in the cost price of the producers, but not an element in the price of production of the product (even though the rent should pass as a determining element into the price of the products of the soil, the capitalized rent, which is advanced for 20 years or more, does not pass into their price in this way), is but one of the forms through which the antagonism between private ownership of the land and between a rational agriculture, a normal social utilization of the soil, expresses itself. But on the other hand, the private ownership of the land, and with it the expropriation of the direct producers from the land—the private property of some, which implies lack of private property on the part of others—is the basis of the capitalist mode of production.


Here, in agriculture on a small scale, the price of the land a form and result of private ownership of the land, appears as a barrier of production itself. In agriculture on a large scale, and in the case of large estates resting upon a capitalist mode of production, private ownership likewise acts as a barrier, because it limits the tenant in his investment of productive capital, which in the last analysis benefits, not him, but the landlord. In both forms the exploitation and devastation of the powers of the soil takes the place of a consciously rational treatment of the soil in its role of an eternal social property, of an indispensable condition of existence and reproduction for successive generations of human beings. And besides, this exploitation is made dependent, not upon the attained degree of social development, but upon the accidental and unequal situations of individual producers. In the case of small property this happens from lack of means and science, by which the social productivity of labor-power might be utilized. In the case of large property, it is done by the exploitation of such means for the purpose of the most rapid accumulation of wealth for the tenant and proprietor. The dependence of both of them upon the market price is instrumental in accomplishing this result.


All critique of small property resolves itself in the last resort into a critique of private ownership as a barrier and obstacle of agriculture. And so does all counter-critique of large property. In either case, we leave aside, of course, all minor considerations of politics. This barrier and this obstacle, which are set up by all private property of land against agricultural production and against a rational treatment, conservation and improvement of the soil itself, develop on both sides merely in different forms. In the controversy over these specific forms of the evil its ultimate cause is forgotten.


Small property in land is conditioned upon the premise that the overwhelming majority of the population is rural, and that not the social, but the isolated labor predominates; that, therefore, in view of such conditions, the wealth and development of reproduction, both in its material and intellectual sides, are out of the question and with them the prerequisites of a rational culture. On the other hand, large landed property reduces the agricultural population to a continually decreasing minimum, and induces on the other side a continual increase of the industrial population crowded together in large cities. In this way it creates conditions, which cause an incurable break in the interconnections of the social circulation of matter prescribed by the natural laws of life. As a result the strength of the soil is wasted, and this prodigality is carried far beyond the boundaries of a certain country by commerce (Liebig).


While small property in land creates a class of barbarians standing half way outside of society, a class suffering all the tortures and all miseries of civilized countries in addition to the crudeness of primitive forms of society, large property in land undermines labor-power in the last region, in which its primal energy seeks refuge, and in it which stores up its strength as a reserve fund for the regeneration of the vital power of nations, the land itself. Large industry and large agriculture on an industrial scale work together. Originally distinguished by the fact, that large industry lays waste and destroys principally the labor-power, the natural power, of human beings, whereas large agriculture industrially managed destroys and wastes mainly the natural powers of the soil, both of them join hands in the further course of development, so that the industrial system weakens also the laborers of the country districts, and industry and commerce supply agriculture with the means by which the soil may be exhausted.

Notes for this chapter

Adam Smith emphasizes the fact that at his time (and this applies also to the plantations in tropical and subtropical countries in our own time) rent and profit were not yet separated, for the landlord was at the same time a capitalist, just as Cato, for instance, was upon his estates. But this separation is precisely the premise of the capitalist mode of production. Moreover, the basis of slavery stands in contradiction with the nature of capitalist production.
Mr. Mommsen, in his Roman history, does not use the term capitalist in the sense in which modern economics and modern society does, but rather in the way peculiar to popular conception, such as still continues to vegetate, not in England or America, but upon the European continent, as an ancient tradition of past conditions.
After a country had been conquered, the next step for the conquerer was always to take possession of the human beings also. Compare Linguet. See also Möser.
Compare Buret, Tocqueville, Sismondi.
See the speech of the king of France in Tooke.
See Mounier and Rubichon.
Dr. H. Maron (Extensive or Intensive?) [No further information given about this pamphlet]. He starts from the false assumption of those whom he combats. He assumes that the capital invested in the purchase of land is "first capital," and engages in a controversy about first capital and running capital that is, fixed and circulating capital. His wholly amateurish conceptions of capital, which may be excused in one who is not an economist in view of the condition of German political economy, conceal from him the fact that this capital is neither first nor running capital, any more than the capital, which some one may invest at the Stock Exchange in the purchase of consols or state bonds, and which represents a personal investment of capital for him, is "invested" in any productive line of industry.

Part VII, Chapter XLVIII.

End of Notes

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