This book does not examine landed property in its various historical forms. We deal with landed property only where a part of the surplus-value that capital produces goes to the landowner. So we assume that agriculture, exactly like manufacturing, is ruled by the capitalist mode of production — that farming is carried on by capitalists, who to begin with differ from other capitalists only in the element in which their capital, and the wage-labour that capital sets in motion, are invested. For us the farmer produces wheat and so on just as the manufacturer produces yarn or machines.
That assumption also means the capitalist mode of production rules every sphere of production and the whole of bourgeois society, so that its own conditions — free competition between capitals, the transferability of capital from one sphere of production to another, an equal level of average profit — are present in full maturity. The form of landed property we look at is a specifically historical form: a form that capital and the capitalist mode of production have transformed, whether what they transformed was feudal landed property or small-peasant farming carried on as a way of living, where owning the soil appeared as a condition of production for the immediate producer, and his own ownership of the land as the most favourable condition, the condition for his way of working to flourish.
Just as the capitalist mode of production in general presupposes that the workers are expropriated from the conditions of labour, so in agriculture it presupposes that the rural workers are expropriated from the soil and subjected to a capitalist who farms for the sake of profit. So if we are reminded that other forms of landed property, and other ways of farming, have existed or still exist, that objection is completely a matter of indifference for our argument. It can only touch those economists who treat the capitalist mode of production in farming, and the form of landed property that goes with it, not as historical categories but as eternal ones.
We have to look at the modern form of landed property because the specific relations of production and exchange that spring from capital being invested in agriculture have to be looked at. Without that, the analysis of capital would not be complete. So we keep strictly to capital invested in agriculture proper, that is, in producing the main plant crop that a population lives on. We can say wheat, since wheat is the main means of sustenance of modern, capitalistically developed peoples. (Or, in place of agriculture, mining — because the laws are the same.)
It is one of Adam Smith's great services that he worked out how the ground-rent of capital applied to producing other agricultural products — flax, dye-stuffs, stock-raising carried on independently, and so on — is determined by the ground-rent that capital invested in producing the main means of subsistence yields. Since his day, in fact, no progress has been made on this point. Anything we would have to add or to restrict belongs in the separate treatment of landed property, not here. So where landed property has nothing to do with land meant for wheat production, we shall not speak of it in its own right; we shall only come back to it now and then, by way of illustration.
For the sake of completeness it should be noted that what we mean here by land also includes water and similar things, in so far as these have an owner and appear as an accessory to the land.
Landed property has a precondition: some people must hold a monopoly over certain pieces of the earth. They treat those pieces as private spheres where their will alone rules and everyone else is shut out. With that given, the job is to work out what economic value the monopoly has—how it gets valorized—when production is capitalist. The fact that the law lets these people use and misuse pieces of the globe settles nothing. How they use that power depends wholly on economic conditions that do not answer to their will.
The legal idea itself amounts to no more than this: the landowner may handle the soil just as any owner of a commodity handles his commodity. And that idea—the legal notion that private landed property is free—appears in the old world only when the organic social order breaks up. In the modern world it appears only as capitalist production develops. Europeans brought it to Asia only here and there.
We saw in the section on primitive accumulation (Volume 1, Part 8) that this mode of production assumes, on one side, that the people who produce directly stop being a mere appendage to the soil (as bondsmen, serfs, slaves, and so on). On the other side, it assumes that the people en masse are expropriated from the land. In this respect, landed property's monopoly is a historical precondition of capitalist production and remains its permanent foundation, just as it was for every earlier way of producing that lives off exploiting the mass of people in some form or other.
At the outset, however, capitalism encounters a form of landed property that does not fit it. Capitalism itself first creates the form that fits, by subjecting agriculture to capital. In this way feudal landed property, clan-held property, or small peasant property tied to a mark community is turned into the economic form that belongs to this mode of production, no matter how different their legal forms may be.
Capitalist production achieves one great thing here. It turns agriculture from a merely empirical routine, mechanically passed down among the least developed part of society, into a conscious scientific use of agronomy—so far as relations shaped by private property make this possible at all. It tears landed property completely away from relations of domination and bondage. And it cuts the land, considered as a condition for labour, completely loose from landed property and from the landowner. For him the land now means nothing but a definite money tax, which his monopoly lets him collect from the industrial capitalist, the farmer. The tie is loosened so far that the landowner can spend his whole life in Constantinople while his landed property lies in Scotland.
In this way landed property takes on its purely economic form. All its earlier political and social decorations and entanglements are peeled off—in short, every traditional addition that the industrial capitalists themselves, and the theorists who speak for them, denounce as useless and absurdly superfluous in the heat of their battle against landed property, as we will see later on.
Rationalizing agriculture—what first makes it possible to farm on a social scale—and reducing landed property to absurdity: these are the great services of capitalist production. Like all its other historical advances, it paid for this one first by utterly impoverishing the direct producers.
Before we turn to the subject itself, a few preliminary remarks are still needed, to guard against misunderstandings.
The presupposition of the capitalist mode of production is this: the people who actually work the soil are wage-labourers, employed by a capitalist — the farmer — who carries on agriculture only as one particular field of exploitation for capital, as a place to put his capital in one particular sphere of production. At fixed dates, yearly for instance, this farmer-capitalist pays the landowner, the owner of the land he exploits, a sum of money fixed by contract (just as someone who borrows money capital pays a set interest) for permission to apply his capital in this particular field of production. That sum of money is called ground-rent, no matter whether it is paid for arable land, building land, mines, fisheries, forests and so on. It is paid for the whole stretch of time for which the landowner has contractually lent, let out, the land to the farmer. So ground-rent is here the form in which landed property is economically realized, valorized — the form in which it brings in a return. And here too we have all three classes that make up the framework of modern society, together and facing one another — wage-labourer, industrial capitalist, landowner.
Capital can be fixed in the earth and incorporated into it. Sometimes this is more short-lived, as with improvements of a chemical kind, manuring and so on; sometimes more permanent, as with drains, irrigation works, levelling, farm buildings and the like. Elsewhere I have called capital incorporated into the earth in this way la terre-capital. It comes under the heading of fixed capital. The interest on the capital incorporated into the earth, and on the improvements the soil thereby gets as an instrument of production, can make up a part of the rent paid by the farmer to the landowner, but it does not constitute ground-rent proper. Ground-rent proper is paid for the use of the soil as such, whether that soil is still in its natural state or has been cultivated. In a systematic treatment of landed property — which lies outside our plan — this part of the landowner's income would have to be set out in detail. A few words on it are enough here.
The shorter-lived capital investments that the ordinary production processes of agriculture bring with them are all made by the farmer, without exception. These investments — and plain cultivation too, whenever it is carried on in any reasonably rational way, that is, is not reduced to a brutal sucking-dry of the soil, as with the former American slaveholders (though against that the landowning gentlemen do secure themselves by contract) — improve the soil, raise what it yields, and turn the earth from mere matter into earth-capital. A cultivated field is worth more than an uncultivated one of the same natural quality. The more permanent fixed capital too, the kind that wears out only over a longer stretch, is for the most part laid out by the farmer — in certain spheres often entirely so. But as soon as the lease term fixed in the contract has run out — and this is one of the reasons why, as capitalist production develops, the landowner tries to make the lease as short as possible — the improvements incorporated into the soil fall to the owner of the soil as his property, an inseparable accident of the soil's substance. When he draws up the new lease he adds the interest on the capital incorporated into the earth to ground-rent proper, whether he lets the land to the farmer who made the improvements or to another one. His rent swells accordingly; or, if he wants to sell the land — we shall see in a moment how its price is fixed — its value has now risen. What he sells is not just the land but the improved land, the capital incorporated into the earth, which cost him nothing.
This is one of the secrets — quite apart from the movement of ground-rent proper — of the growing enrichment of the landowners, of their rents swelling without pause and the money value of their estates rising as economic development goes forward. In this way they pocket a result of social development that came about without any doing of theirs — fruges consumere nati. At the same time it is one of the greatest obstacles to a rational agriculture, because the farmer holds back from every improvement and outlay whose full return he cannot expect to see within his lease term. And as such an obstacle it is denounced again and again, in the last century by James Anderson — the man who really discovered the modern theory of rent, himself a working farmer and, for his time, a notable agronomist — and in our own day by the opponents of the present arrangement of landed property in England.
A. A. Walton, History of the Landed Tenures of Great Britain and Ireland, London 1865, says on this subject, on pages 96 and 97:
Walton says that all the efforts of the numerous agricultural institutions in our country cannot produce any very great or really noticeable results in the real advance of improved cultivation, so long as such improvements raise the value of landed property and the level of the landowner's rent-roll to a far higher degree than they improve the position of the farmer or the agricultural labourer. Farmers in general know as well as the landowner, his steward, or even the president of an agricultural society, that good drainage, plenty of manure and good management, together with more labour applied to clean and work the land thoroughly, will produce wonderful results, both in improving the soil and in increased production. But all this calls for considerable outlay, and farmers also know very well that however much they improve the land or raise its value, the landowners will in the long run reap the main advantage in higher rents and a higher value of the land ... They are shrewd enough to notice what those speakers (landowners and their stewards at agricultural dinners) characteristically always forget to tell them — namely that the lion's share of every improvement the farmer makes must in the end go into the landowner's pocket ... However much the previous farmer may have improved the holding, his successor will always find that the landowner raises the rent in proportion to the land value that earlier improvements have raised.
In agriculture proper this process does not yet appear as clearly as when the soil is used as building ground. By far the greater part of the land in England that is sold for building purposes but not as freehold (that is, not outright) is let by the landowners for ninety-nine years, or for a shorter period if possible. Once that time is up, the buildings fall to the landowner along with the land itself.
Walton reports further that the tenants are bound, when the lease runs out, to hand the house over to the great landowner in good habitable condition, after having paid an excessive ground-rent up to that point. No sooner has the lease expired than the landowner's agent or inspector comes, examines your house, sees that you put it in good repair, then takes possession of it and annexes it to his lord's domain. The fact is that if this system is allowed to work in full for any considerable time longer, the whole of the house property in the kingdom will be in the hands of the great landlords, just as the rural land is. The whole West End of London, north and south of Temple Bar, belongs almost entirely to about half a dozen great landlords, is let at enormous ground-rents, and where the leases have not quite expired they are falling due one after another. The same holds, more or less, of every town in the kingdom. Nor does this greedy system of exclusion and monopoly stop there. Almost all the dock installations in our seaport towns are in the hands of the great leviathans of the land, through the same process of usurpation.
Under these conditions it is clear that when the 1861 census for England and Wales puts the number of house-owners at 36,032 out of a total population of 20,066,224, the relation of owners to the number of houses and to the population would look quite different if the great owners were set on one side and the small ones on the other.
This example of property in buildings matters, first, because it shows clearly the difference between ground-rent proper and the interest on the fixed capital incorporated into the soil, which can form an addition to ground-rent. The interest on the buildings, like the interest on capital a farmer incorporates into the soil in agriculture, falls to the industrial capitalist — the building speculator or the farmer — for the duration of the lease, and in and of itself has nothing to do with the ground-rent that has to be paid every year at fixed dates for the use of the soil. Second, because it shows how, along with the land, capital that was never the landowner's and has been incorporated into it finally falls to him, and the interest on it swells his rent.
Some writers have tried to present ground-rent, the specific economic expression of landed property, as identical with interest. Some of them wrote as spokesmen for landed property against the attacks of the bourgeois economists; others wanted to turn the capitalist system of production into a system of "harmonies" instead of oppositions, Carey for example. The point of the identification would be that the opposition between landowners and capitalists is wiped out.
At the start of capitalist production the opposite method was applied. Back then, popular opinion still counted landed property as the primitive and respectable form of private property, while interest on capital was denounced as usury. Dudley North, Locke and others therefore presented interest on capital as a form analogous to ground-rent, just as Turgot derived the justification of interest from the existence of ground-rent. What those more recent writers forget — leaving aside entirely that ground-rent can exist, and does exist, in pure form, with no addition of any interest for capital incorporated into the soil — is that the landowner in this way not only receives interest on capital belonging to others, which costs him nothing, but gets that capital itself into the bargain, for nothing.
The justification of landed property, like that of all the other forms of property belonging to a particular mode of production, is that the mode of production itself has a historical, transitory necessity, and so do the relations of production and exchange that spring from it. As we shall see later, however, landed property is distinguished from the other kinds of property by this: at a certain level of development it appears superfluous and harmful even from the standpoint of the capitalist mode of production.
Ground-rent can be mixed up with interest in another shape. If that happens, people miss what is specific to ground-rent. Ground-rent shows up as a fixed sum of money. The landowner gets that sum every year for letting someone use a piece of the earth. We have already seen that any fixed money income can be turned into capital. That is, it can be treated as the interest on an imaginary capital. Suppose the average rate of interest is 5 per cent. Then an annual ground-rent of £200 can also be treated as the interest on a capital of £4,000. When ground-rent is capitalized in this way, it makes the purchase price or value of the land. This category is irrational on its face, just as the price of labour is irrational. The earth is not a product of labour, so it has no value either. But a real relation of production lies hidden behind this irrational form. Take a capitalist who buys land that yields an annual rent of £200, and pays £4,000 for it. He then draws the average annual interest of 5 per cent on £4,000. This is just what would happen if he had put that capital into interest-bearing securities, or lent it out directly at 5 per cent interest. Here a capital of £4,000 is valorized at 5 per cent. On that supposition, after twenty years the income from his estate would have replaced the purchase price he paid for it. In England, then, the purchase price of landed estates is reckoned in so many years' purchase. That is only another way of saying: the capitalization of ground-rent. What is really bought is not the soil. It is the ground-rent that the soil yields, reckoned at the ordinary rate of interest. This capitalization of the rent, however, presupposes the rent. The rent cannot be derived and explained the other way round, from its own capitalization. What we start from is that rent exists on its own, outside the sale.
From this it follows that if we take ground-rent as a constant magnitude, the price of land can rise or fall in the opposite direction to the rate of interest. Suppose the ordinary rate of interest were to fall from 5 per cent to 4. Then an annual ground-rent of £200 would be the yearly valorization yielded by a capital of £5,000, not by one of £4,000. The price of the same piece of land would therefore have gone up from £4,000 to £5,000, that is from 20 years' purchase to 25. Reverse the facts, and the reverse follows. This movement of the price of land does not depend on the movement of ground-rent itself. The rate of interest alone regulates it. But we have seen that the rate of profit has a tendency to fall as social development proceeds. So too, therefore, does the rate of interest, in so far as the latter is regulated by the rate of profit. We have also seen that apart from the rate of profit, the rate of interest has a tendency to fall because loanable money capital grows. It follows that the price of land has a tendency to rise, even independently of the movement of ground-rent and of the price of the products of the soil, of which rent forms one part.
Confusing ground-rent itself with the form of interest that it takes on for the buyer of the land — a confusion resting on complete ignorance of the nature of ground-rent — must lead to the strangest false conclusions. Since landed property counts in all old countries as a particularly distinguished form of property, and the purchase of it besides as a particularly secure capital investment, the rate of interest at which ground-rent is bought mostly stands lower than with other capital investments that extend over a longer time; so that, for example, the buyer of land receives only 4 per cent on the purchase price, whereas for the same capital he would otherwise receive 5 per cent — or, what comes to the same thing, he pays more capital for the ground-rent than he would pay for the same annual money income in other investments. From this Herr Thiers, in his altogether wretched book on La Propriété (the reprint of the speech he made against Proudhon in the French National Assembly in 1848), concludes to the lowness of ground-rent, whereas it proves only the height of its purchase price.
That capitalized ground-rent presents itself as the price or value of land, and that the earth is therefore bought and sold like any other commodity, counts with some apologists as a ground for justifying landed property: the buyer has paid an equivalent for it, as for any other commodity, and the greater part of landed property has changed hands in this way. That same ground of justification would then apply to slavery too; since for the slaveholder who has paid cash for the slave, the return from the slave's labour represents only the interest on the capital laid out in buying him. To derive the entitlement of ground-rent to exist from its purchase and sale means, quite generally, justifying its existence out of its existence.
For scientific analysis of ground-rent — the autonomous, specific economic form that landed property takes under the capitalist mode of production — it is important to view it in pure form, keeping out every addition that falsifies and blurs it. On the other side, knowing where these theoretical obscurities come from is just as important: it helps both in understanding what landed property does in practice and in theoretical insight into a mass of facts that run against the concept and nature of ground-rent while still presenting themselves as modes in which ground-rent exists.
Everything the farmer pays the landowner as lease-price, for permission to cultivate the soil, appears in practice, of course, as ground-rent. Whatever parts this tribute is put together from, and wherever it may come from, it has one thing in common with ground-rent proper: a monopoly over a piece of the earth is what enables the so-called landowner to exact the tribute, to impose the charge. And it has a second thing in common with ground-rent proper: it determines the price of land, which, as shown earlier, is nothing but the capitalized revenue from the leasing of the soil.
We have already seen that interest on capital incorporated into the soil can form just such a foreign component of ground-rent — one that, as economic development advances, must form an ever-growing addition to a country's total rental.
But setting this interest aside, the lease-price may hide a deduction — partly, or in certain cases entirely, so that ground-rent proper is completely absent and the land is therefore actually valueless — from average profit, from normal wages, or from both at once. This portion, whether of profit or of wages, appears here in the shape of ground-rent, because instead of falling, as would be normal, to the industrial capitalist or to the wage-labourer, it is paid to the landowner in the form of the lease-price.
Economically speaking, neither the one part nor the other forms ground-rent; but in practice it forms the landowner's income, an economic valorization of his monopoly, every bit as much as genuine ground-rent does — and it has just as much effect in determining the price of land as genuine ground-rent does.
We are not talking here about conditions in which ground-rent — the form of landed property that answers to the capitalist mode of production — exists only formally, while the capitalist mode of production itself does not exist: where the tenant is not himself an industrial capitalist and the way he farms is not a capitalist one. Ireland is a case in point. There the tenant is on average a small peasant.
What he pays the landowner as lease often swallows up not only part of his profit — that is, part of his own surplus labour, which he has a right to as the owner of his own instruments of labour — but also part of the normal wage he would have received for the same amount of labour under other conditions. On top of that, the landowner, who here does absolutely nothing to improve the soil, expropriates him of the small capital he has put into the soil, mostly by his own labour — exactly as a usurer would do in similar conditions. Only the usurer at least risks his own capital in the transaction.
This continuous robbery is what the quarrel over Irish land legislation is about, and that quarrel comes down essentially to this: that a landowner who gives a tenant notice to quit should be compelled to compensate him for the improvements he has made to the soil, or for the capital he has incorporated into it. Palmerston used to answer this cynically:
As was his habit, Palmerston answered this cynically: 'The House of Commons is a house of landed proprietors.'
Nor are we talking about the exceptional conditions in which, even in countries of capitalist production, the landowner can extort a high lease-price that stands in no relation at all to the product of the soil — as, for example, in the English industrial districts, where small patches of land are leased to factory workers, whether for little gardens or for amateur cultivation in their spare time. (Reports of the Inspectors of Factories.)
We are talking about agricultural rent in countries where capitalist production is developed. Among English farmers, for instance, there are a number of small capitalists whom upbringing, education, tradition, competition and other circumstances decide and compel to put their capital into agriculture as farmers. They have to settle for less than the average profit, and to hand over part of it to the landowner in the form of rent. That is the only condition on which they are allowed to put their capital into the soil, into agriculture. Landowners everywhere have a big influence on legislation, and in England a predominant one, so that influence can be exploited to cheat the whole class of farmers.
The Corn Laws of 1815 are one instance: a tax on bread, avowedly imposed on the country to secure the idle landowners the continuation of the rental that had grown abnormally during the Anti-Jacobin War. What they did was keep the prices of agricultural products above the level to which they would have fallen under free corn imports — apart from a few exceptionally fruitful years. What they did not do was keep prices at the height the legislating landowners had decreed as normal prices, in the sense that those prices formed the legal limit for importing foreign corn. Yet it was under the impression of those normal prices that the lease contracts were concluded. As soon as the illusion burst, a new law was made with new normal prices, which were just as much the powerless expression of landed property's greedy fantasy as the old ones. In this way the farmers were cheated from 1815 into the 1830s. Hence, throughout that whole time, the constant theme of 'agricultural distress'. Hence, in that period, the expropriation and ruin of an entire generation of farmers, and their replacement by a new class of capitalists.
A far more general and more important fact, though, is that the wages of the agricultural labourers themselves are pressed down below their normal average level. Part of the wage is taken off the worker, becomes a component of the lease-price, and so flows to the landowner instead of the worker under the mask of ground-rent. In England and Scotland this is the ordinary state of affairs, apart from a few favourably situated counties.
The work of the parliamentary committees of inquiry into wage levels, set up in England before the corn laws came in — still the most valuable contribution to the history of wages in the nineteenth century, and almost entirely unexploited, and at the same time a pillory that the English aristocracy and bourgeoisie set up for themselves — proved conclusively and beyond all doubt that the high rents, and the rise in land prices that went with them during the Anti-Jacobin War, were in part owed to nothing but the deduction from wages, and to pressing wages even below the physical minimum; that is, to part of the normal wage being paid over to the landowner. Various circumstances had made this possible, among them the depreciation of money and the way the Poor Laws were handled in the agricultural districts, while at the same time the farmers' incomes rose enormously and the landowners enriched themselves fabulously. Indeed, one of the main arguments for bringing in the corn duties, from farmers and landowners alike, was that it was physically impossible to press the wages of agricultural day-labourers down any further. This state of affairs has not essentially changed, and in England, as in all European countries, part of the normal wage still goes into ground-rent as before.
When the Earl of Shaftesbury, then Lord Ashley, one of the philanthropic aristocrats, was so extraordinarily moved by the condition of English factory workers that he made himself their parliamentary spokesman in the Ten Hours agitation, the spokesmen of the industrialists published, in revenge, statistics on the wages of agricultural day-labourers in the villages that belonged to him (see Volume 1, Chapter 25, 5, e: The British Agricultural Proletariat). These plainly showed how a part of this philanthropist's ground-rent consists of nothing but the plunder that his tenants carry out for him on the wages of the agricultural labourers. The publication is also interesting because the facts in it may boldly stand beside the worst that the committees of 1814 and 1815 brought to light. Whenever circumstances force a momentary rise in the wages of agricultural day-labourers, the farmers' cry goes up that raising wages to their normal level, such as prevails in other branches of industry, is impossible and must ruin them without a simultaneous reduction of ground-rent. This contains the admission that under the name of ground-rent a deduction from wages is made by the farmers and paid over to the landowner.
Between 1849 and 1859, for instance, agricultural wages in England rose as a result of a coming-together of overwhelming circumstances: the exodus from Ireland, which cut off the supply of agricultural labourers from there; the extraordinary absorption of the agricultural population by factory industry; wartime demand for soldiers; extraordinary emigration to Australia and the United States (California); and other reasons not to be gone into further here. At the same time, apart from the bad harvests of 1854-56, average cereal prices fell by more than 16 per cent during this period. The farmers clamoured for rents to be reduced. In individual cases they managed it. On average they failed in this demand. They took refuge in cutting production costs, among other ways by bringing in locomotive steam-engines and new machinery on a large scale, which partly replaced horses and drove them out of the farming economy, and partly, by releasing agricultural day-labourers, produced an artificial over-population and hence a fresh fall in wages. And this happened despite the general relative decline of the agricultural population during that decade compared with the growth of the total population, and despite the absolute decline of the agricultural population in some purely agricultural districts.
Fawcett, at that time Professor of Political Economy at Cambridge, said the same thing at the Social Science Congress on 12 October 1865:
Fawcett reported that the agricultural day-labourers were beginning to emigrate, and that the farmers were beginning to complain that they would not be able to pay rents as high as they were used to paying, because labour was becoming dearer as a result of the emigration.
So high ground-rent here is directly the same as low wages. And to the extent that the level of the price of land is set by this factor that raises ground-rent, land's value going up is the same as labour's value going down; a high price of land is the same thing as a low price of labour.
The same holds good for France.
Rubichon's testimony for France runs like this: the lease-price rises because the price of bread, wine, meat, vegetables and fruit rises on the one side, while on the other the price of labour stays unchanged. If older people compare the accounts of their fathers, which takes us back roughly 100 years, they will find that the price of a day's work in rural France was at that time exactly the same as it is today. The price of meat has tripled since then ... Who is the victim of this upheaval? Is it the rich man, who owns the farm, or the poor man, who works it? ... The rise in lease-prices is proof of a public disaster. (Du Mécanisme de la Société en France et en Angleterre, by M. Rubichon, 2nd edition, Paris, 1837, p. 101.)
Examples of rent as a consequence of a deduction from average profit on the one hand and from average wages on the other:
Morton, already quoted above — a land agent and agricultural engineer — says that in many districts it has been noticed that the rent for large farms is lower than for smaller ones, because competition for the smaller ones is usually greater than for the larger, and because small farmers, who are seldom in a position to throw themselves into any other business than agriculture, are often willing to pay a rent that they themselves know to be too high, driven on by the need to find a more suitable occupation. (John L. Morton, The Resources of Estates, London 1858, p. 116.)
This difference, however, is said to be gradually disappearing in England, and in his view emigration, precisely among the class of small farmers, has a great deal to do with it. The same Morton gives an example in which a deduction from the wage of the farmer himself, and therefore still more certainly from the wages of the men he employs, evidently enters into ground-rent. This is on farms of under 70-80 acres (30-34 hectares), which cannot keep a two-horse plough.
If the farmer does not work with his own hands as industriously as any labourer, he cannot keep going on his holding. If he leaves the carrying out of the work to his men and confines himself to merely supervising them, he will most probably find before long that he is unable to pay his rent. (Ibid., p. 118.)
From this Morton concludes that, if the farmers in that area are not very poor, holdings ought not to fall below 70 acres, so that a tenant can keep two or three horses.
Here is the extraordinary wisdom of Monsieur Léonce de Lavergne, member of the Institute and of the Central Agricultural Society. In his Économie rurale de l'Angleterre (quoted from the English translation, London, 1855) he draws up the following comparison of the yearly gain from cattle — cattle that work in France and not in England, where horses have taken their place (p. 42):
Yet the higher product now emerges here because, by his own account, milk in England costs twice what it does in France, while for meat he assumes prices are identical in both countries (p. 35); so England's milk product would come down to £8 million, and the overall product would fall to £28 million, exactly as in France. Monsieur Lavergne is really going a bit far when he lets both the amounts produced and the price differences enter the same reckoning together, with the result that, should England produce certain items at a higher cost than France—which at most means a larger profit for farmers and landowners—the outcome appears as an advantage of English agriculture.
Lavergne proves at p. 48 that he not only knows the economic successes of English agriculture but also believes in the prejudices of English farmers and landowners:
One great drawback, he writes, is usually bound up with cereal crops ... they exhaust the soil that bears them.
Lavergne does not only believe that other plants do no such thing; he believes that fodder crops and root crops enrich the soil:
Forage plants, he writes, draw the chief elements of their growth out of the atmosphere, while they give back to the soil more than they take from it; so they help, directly and again through their conversion into animal manure, in two ways to make good the damage that cereal crops and other exhausting harvests have done; the principle, therefore, is that they should at least alternate with those crops — in this consists the Norfolk rotation. (pp. 50, 51.)
No wonder that Lavergne, who believes the English rural mind when it tells him these fairy stories, also believes it when it tells him that since the repeal of the Corn Laws the wages of English rural labourers have lost their former abnormal character. See what we said earlier on this subject in Volume 1, Chapter 25, 5. But let us also hear Mr John Bright's speech in Birmingham on 13 December 1865. After speaking of the five million families who are not represented in Parliament at all, he goes on:
Among these, Bright said, there is one million, or rather more than one million, in the United Kingdom, entered on the unhappy list of paupers. Then there is another million only just keeping its head above pauperism, but in constant danger of becoming paupers too; their situation and their prospects are no better than that. Now let his hearers look at the ignorant lower layers of this part of society: their outcast position, their poverty, their suffering, their complete hopelessness. Even in the United States, even in the Southern states during the reign of slavery, every Negro held the belief that a jubilee would come for him some time. But for these people, for this mass of the lowest layers in our country, there exists — he was there to say it — neither the belief in any improvement nor even a longing for one. Had they read the recent newspaper note about John Cross, an agricultural day-labourer in Dorsetshire? He worked six days a week, had an excellent testimonial from his employer, with whom he had worked for twenty-four years at 8 shillings a week. John Cross had a family of seven children to keep out of that wage in his hovel; to warm his sickly wife and her baby he took — legally speaking, Bright believed, he stole it — a wooden hurdle worth sixpence. For this offence the magistrates sentenced him to fourteen or twenty days in prison. He could tell them that many thousands of cases like John Cross's are to be found throughout the country, and especially in the south, and that their condition is such that so far the most earnest investigator has not been able to solve the mystery of how they keep body and soul together.
Now cast your eyes over the whole country, he went on, and look at these five million families and the desperate state of this layer among them. Can one not truly say that the mass of the nation shut out from the vote toils and toils again and hardly knows any rest? Compare it with the ruling class — but if he did that, he would be accused of communism ... but compare this great toiling and voteless nation with the part that may be counted the governing classes. Look at their wealth, their pomp, their luxury. Look at their weariness — for there is weariness among them too, but it is the weariness of satiety — and see how they hurry from place to place as if the only thing at stake were discovering new pleasures. (Morning Star, 14 December 1865.)
The argument that follows shows how surplus labour, and with it surplus product in general, gets taken for ground-rent — for a piece of the surplus product that is specific in both amount and kind, at least on the basis of the capitalist mode of production.
The natural basis of surplus labour in general — a natural condition without which it cannot happen at all — is this: nature supplies the means of subsistence, whether as plant or animal products of the land or in fisheries and so on, within a working time that does not swallow up the whole working day. This natural productivity of agricultural work (which here includes plain gathering, hunting, fishing and stock-raising) is the basis of all surplus labour, just as all labour is first and originally aimed at taking and producing food. (In colder climates the animal also provides a pelt for warmth; there are cave-dwellings too, and so on.)
The same confusion between surplus product and ground-rent turns up in a different wording in Mr Dove.
Originally, agricultural work and industrial work are not separate from each other; industrial work attaches itself to agricultural work. The surplus labour and the surplus product of a farming clan, a common household or a family take in agricultural and industrial work alike. The two go hand in hand. Hunting, fishing and farming are impossible without the right implements. Spinning and weaving are at first carried on as sideline work on the land.
Earlier we showed that just as one worker's labour falls into necessary labour and surplus labour, so the whole working class's labour can be divided in such a way that the part producing all the means of subsistence for the class (including the means of production this requires) performs the necessary labour for society as a whole. The labour done by the entire remaining part of the working class can be looked at as surplus labour.
But necessary labour by no means takes in agricultural work alone; it also takes in the labour that produces every other article that the worker's average consumption necessarily includes. And, socially speaking, one group performs only necessary labour because the other performs only surplus labour, and the other way round. This is only a division of labour between them. The same goes for the division of labour between agricultural and industrial workers in general: the purely industrial character of the work on one side answers to the purely agricultural character of the work on the other.
This purely agricultural labour is in no way something that grew up of itself; it is itself a product of social development — a very modern one, and by no means reached everywhere — and it answers to a quite particular stage of production. Just as one part of agricultural labour is fixed in products that serve only luxury, or form raw materials for industry, and by no means go into food, let alone food for the masses, so on the other side one part of industrial labour is fixed in products that serve as necessary means of consumption for agricultural and non-agricultural workers alike. It is false to conceive this industrial labour — from the social standpoint — as surplus labour. In part it is just as much necessary labour as the necessary part of agricultural work is. It is also only the separated-out form of a part of the industrial labour that was once linked naturally with agricultural labour — the necessary mutual complement of the purely agricultural labour that has now broken away from it. (Looked at just materially, 500 power-driven weavers, say, produce surplus cloth to a far higher degree — more, that is, than their own clothing requires.)
When we look at the forms of appearance of ground-rent — that is, the lease-price paid to the landowner under this heading for the use of the soil, whether the soil serves production or consumption — one thing must be held on to: the price of things that have no value in and of themselves can be settled by quite accidental combinations of circumstances. Such things either are not a product of labour at all, like land, or at least cannot be reproduced by labour, like antiques, works of art by particular masters, and so on. To sell a thing, nothing more is needed than that it can be monopolized and alienated.
When ground-rent is dealt with, three main errors have to be avoided, and they cloud the analysis.
First: the different forms of rent get mixed up with one another. But those forms belong to different stages in the development of the social production process.
Whatever the particular form of rent may be, all its types have something in common: the appropriation of rent is the economic form in which landed property realizes itself, and ground-rent on its side presupposes landed property — particular individuals owning particular pieces of the globe.
This holds whatever the form of ownership. The owner may be the person who stands for the community, as in Asia, Egypt and so on; or the landed property may be no more than an accidental accompaniment of the property that certain people have in the persons of the immediate producers, as under slavery or serfdom; or it may be the pure private property of non-producers in nature, a bare ownership title to land; or finally it may be a relation to the land which, as with colonists and small peasant proprietors, seems directly contained in the fact that the immediate producers take and produce the products of particular pieces of land, given that their labour is isolated and not socially developed.
This common feature of the different forms of rent — that they are the economic realization of landed property, the legal fiction by which different individuals have exclusive possession of particular parts of the globe — is exactly what lets the differences between them be overlooked.
Second, every bit of ground-rent is surplus-value, the outcome of surplus labour. In its less developed shape, rent in kind, it remains directly a surplus product. That is why people slip into an error about the rent that goes with capitalist production — rent that always sits above profit, above a piece of commodity value that is itself made of surplus-value, and so of surplus labour. They think that once they have set out the general conditions for surplus-value and profit to exist at all, they have also accounted for this separate, specific piece of surplus-value. Those general conditions come in two sides. On the subjective side, the immediate producers must work past the time needed to reproduce their own labour-power, that is, themselves. They must do surplus labour of some kind. On the objective side, they must also be able to do it: natural conditions have to be such that one part of their available labour-time is enough to reproduce them and keep them going as producers, so that making their necessary means of subsistence does not use up their whole labour-power. Here the fertility of nature marks a boundary, a point of departure, a basis. On the other side, the growth of the social productive power of their labour marks the other one. Looked at more closely, since food production is the first condition of their life and of all production whatsoever, the labour used there — agricultural labour in the widest economic sense — has to be fruitful enough that the whole available labour-time is not swallowed by food production for the immediate producers. Only then is agricultural surplus labour possible, and with it an agricultural surplus product. Pushed further, the whole agricultural labour of one part of society — necessary and surplus together — must suffice to produce the necessary food for society as a whole, and so for the non-agricultural workers too. That makes possible the great split between farmers and industrial workers, and likewise the split between those farmers who produce food and those who produce raw materials. True, the labour of the direct food producers divides, for them, into necessary and surplus labour. Yet seen in relation to society, it stands for the necessary labour needed simply to produce food. The same thing, by the way, happens with every division of labour inside society as a whole, as opposed to the division of labour inside a single workshop. It is the labour needed to make particular articles, to meet a particular social need for particular articles. If this distribution is in due proportion, the products of the different groups sell at their values — at a later stage of development, at their prices of production — or else at prices that are modifications of those values, or of those prices of production, as fixed by general laws. Here, in fact, the law of value makes itself felt not for single commodities or articles but for the total products of each particular sphere of social production that the division of labour has set up as independent. So not only does each single commodity get no more labour-time than is necessary; out of society's total labour-time, only the proportional quantity that is needed goes to the different groups. Use-value remains the condition. For a single commodity, its use-value depends on its satisfying a need by and for itself. For society's mass of products, it depends on that mass matching the quantitatively determined social need for each particular kind of product, and thus on labour being spread among the different spheres of production in proportion to those social needs, which are quantitatively bounded. (This point is to be brought in when the distribution of capital among the different spheres of production is treated.) Social need — that is, use-value raised to a social scale — here appears as what decides the quota of society's total labour-time that falls to the various particular spheres of production. But this is only the same law already on show in the single commodity: its use-value is the precondition of its exchange-value, and so of its value.
That point bears on necessary and surplus labour only in this way. If the proportion is broken, the value of the commodity — and therefore the surplus-value inside it — cannot be realized. Suppose, for example, that too much cotton cloth has been made in proportion, even though only the labour-time necessary under the given conditions is realized in this total product of cloth. Too much social labour has been spent on this one branch altogether, meaning that part of the product is useless. The whole lot therefore sells only as though it had been made in the necessary proportion. This quantitative barrier on the shares of social labour-time that can be used in the various particular spheres of production is just a further developed expression of the law of value in general. Necessary labour-time does, it is true, carry a different meaning here: only so much of it is needed to satisfy the social need. The restriction comes in through the use-value. Under the given conditions of production, society can put only so much of its total labour-time into this one kind of product. But the particular form, whether it be profit or rent, has nothing to do with the subjective and objective conditions of surplus labour and surplus-value in general. They hold for surplus-value as such, no matter what particular form it takes. So they do not explain ground-rent.
The third of the three main errors. Precisely where landed property is turned to economic account — where ground-rent develops — one thing stands out as especially peculiar: the amount of rent is not determined at all by anything the person who receives it does. It is determined instead by a development of social labour that goes on independently of him and in which he has no part. That is why something easily gets taken as a peculiar property of rent (and of the product of agriculture in general) which is in fact common to every branch of production and to all its products, on the basis of commodity production — and more precisely of capitalist production, which is commodity production through and through.
Ground-rent's level rises, and the value of land rises along with it, as society develops; both come out of society's total labour. This happens on two fronts. The market grows, and demand for what the soil yields grows with it. Demand for the soil itself also grows directly, because every possible line of business, non-agricultural ones included, competes for soil as a condition of production. More precisely — if we speak only of agricultural rent proper — rent, and therefore the value of land, moves with the market for the soil's product, and so with the growth of the non-agricultural population, with their needs and their demand, partly for food and partly for raw materials. It belongs to the nature of the capitalist mode of production that it continually shrinks the agricultural population in relation to the non-agricultural. In industry in the narrower sense, the growth of constant capital relative to variable capital is tied to an absolute growth of variable capital, even though that capital declines relatively. In agriculture, by contrast, the variable capital required to exploit a particular piece of soil falls absolutely, so it can grow only in so far as new soil is cultivated; and this in turn presupposes a still greater growth of the non-agricultural population.
In fact, what we have here is not a phenomenon peculiar to agriculture and its products. Rather, once commodity production is the basis — and its absolute form, capitalist production — the same holds for every other branch of production and every other product.
These products are commodities, use-values that possess an exchange-value — and one that can be realized, turned into money — only to the extent that other commodities form an equivalent for them, that other products confront them as commodities and as values; that is, only to the extent that they are not produced as direct means of subsistence for their own producers, but as commodities, as products that become use-values only by being converted into exchange-value (money), by being alienated. The market for these commodities develops through the social division of labour; the separation of productive labours turns their respective products reciprocally into commodities, into equivalents for one another, and makes them serve one another reciprocally as markets. There is nothing at all peculiar to agricultural products in this.
Rent can develop as money-rent only on the basis of commodity production, and more precisely of capitalist production, and it develops in the same measure that agricultural production becomes commodity production — that is, in the same measure that non-agricultural production develops independently over against it. For in that measure the product of agriculture becomes a commodity, an exchange-value and a value. In the same measure that commodity production, and therefore the production of value, develops with capitalist production, the production of surplus-value and surplus product develops too.
But in the same measure that the latter develops, there develops in landed property the ability — by way of its monopoly of the earth — to intercept a growing part of this surplus-value, and so to raise the value of its rent and the price of the land itself. The capitalist is still an active functionary in the development of this surplus-value and surplus product. The landowner has only to intercept the share in surplus product and surplus-value that grows in this way without any doing of his own.
This is what is peculiar about his position — not the fact that the value of the products of the land, and therefore of the land, keeps growing in the measure that the market for them expands, demand increases, and with it the world of commodities that confronts the product of the land, in other words the mass of non-agricultural commodity producers and the scale of non-agricultural commodity production. But since this happens without his doing, it appears to him as something specific that the mass of value, the mass of surplus-value, and the transformation of a part of this surplus-value into ground-rent should depend on the social process of production, on the development of commodity production in general. That is why Dove, for instance, wants to develop rent out of this. He says that rent does not depend on the mass of the agricultural product but on its value; and this value depends on the mass and the productivity of the non-agricultural population. But this holds of every other product as well — that it develops as a commodity only partly with the mass, partly with the variety of the series of other commodities that form equivalents for it. This was already shown in the general presentation of value. On the one hand, the exchangeability of a product depends altogether on the multiplicity of the commodities that exist outside it. On the other hand, the mass in which it can itself be produced as a commodity depends in particular on that.
No producer taken in isolation produces a value or a commodity — the industrialist no more than the farmer. His product becomes a value and a commodity only in a determinate social context. First, in so far as it appears as an expression of social labour, and so his own labour-time appears as a part of social labour-time in general; second, in so far as this social character of his labour appears as a social character stamped on his product, in its money character and in its general exchangeability as determined by its price.
So, on one hand, what gets explained is not rent itself but surplus-value — or, in an even more narrow-minded version, surplus product in general. On the other hand, a blunder follows: a character that belongs to every product as a commodity and as a value is pinned on farm products alone. The whole thing becomes flatter still if the move is from value's general determination down to how some particular commodity value is realized. No commodity can realize its value outside the circulation process, and whether it does so, and how far, turns on the market conditions of the moment.
Ground-rent's own peculiarity, then, does not lie in the fact that farm produce comes to be values and functions as values. It does not lie in this either: that such produce, as commodities, faces other commodities, while non-agricultural products face it as commodities; or that they emerge as specific expressions of social labour. The peculiarity lies elsewhere: as the conditions take shape under which farm produce becomes values (commodities), and as the conditions take shape under which those values are realized, the power of landed property grows too. That power lets it take an increasing part of these values, which were created without any contribution from landed property; and an increasing part of surplus-value changes into ground-rent.
This book does not examine landed property in its various historical forms. We deal with landed property only where a part of the surplus-value that capital produces goes to the landowner. So we assume that agriculture, exactly like manufacturing, is ruled by the capitalist mode of production — that farming is carried on by capitalists, who to begin with differ from other capitalists only in the element in which their capital, and the wage-labour that capital sets in motion, are invested. For us the farmer produces wheat and so on just as the manufacturer produces yarn or machines.
That assumption also means the capitalist mode of production rules every sphere of production and the whole of bourgeois society, so that its own conditions — free competition between capitals, the transferability of capital from one sphere of production to another, an equal level of average profit — are present in full maturity. The form of landed property we look at is a specifically historical form: a form that capital and the capitalist mode of production have transformed, whether what they transformed was feudal landed property or small-peasant farming carried on as a way of living, where owning the soil appeared as a condition of production for the immediate producer, and his own ownership of the land as the most favourable condition, the condition for his way of working to flourish.
Just as the capitalist mode of production in general presupposes that the workers are expropriated from the conditions of labour, so in agriculture it presupposes that the rural workers are expropriated from the soil and subjected to a capitalist who farms for the sake of profit. So if we are reminded that other forms of landed property, and other ways of farming, have existed or still exist, that objection is completely a matter of indifference for our argument. It can only touch those economists who treat the capitalist mode of production in farming, and the form of landed property that goes with it, not as historical categories but as eternal ones.
We have to look at the modern form of landed property because the specific relations of production and exchange that spring from capital being invested in agriculture have to be looked at. Without that, the analysis of capital would not be complete. So we keep strictly to capital invested in agriculture proper, that is, in producing the main plant crop that a population lives on. We can say wheat, since wheat is the main means of sustenance of modern, capitalistically developed peoples. (Or, in place of agriculture, mining — because the laws are the same.)
It is one of Adam Smith's great services that he worked out how the ground-rent of capital applied to producing other agricultural products — flax, dye-stuffs, stock-raising carried on independently, and so on — is determined by the ground-rent that capital invested in producing the main means of subsistence yields. Since his day, in fact, no progress has been made on this point. Anything we would have to add or to restrict belongs in the separate treatment of landed property, not here. So where landed property has nothing to do with land meant for wheat production, we shall not speak of it in its own right; we shall only come back to it now and then, by way of illustration.
For the sake of completeness it should be noted that what we mean here by land also includes water and similar things, in so far as these have an owner and appear as an accessory to the land.
Landed property has a precondition: some people must hold a monopoly over certain pieces of the earth. They treat those pieces as private spheres where their will alone rules and everyone else is shut out. With that given, the job is to work out what economic value the monopoly has—how it gets valorized—when production is capitalist. The fact that the law lets these people use and misuse pieces of the globe settles nothing. How they use that power depends wholly on economic conditions that do not answer to their will.
The legal idea itself amounts to no more than this: the landowner may handle the soil just as any owner of a commodity handles his commodity. And that idea—the legal notion that private landed property is free—appears in the old world only when the organic social order breaks up. In the modern world it appears only as capitalist production develops. Europeans brought it to Asia only here and there.
We saw in the section on primitive accumulation (Volume 1, Part 8) that this mode of production assumes, on one side, that the people who produce directly stop being a mere appendage to the soil (as bondsmen, serfs, slaves, and so on). On the other side, it assumes that the people en masse are expropriated from the land. In this respect, landed property's monopoly is a historical precondition of capitalist production and remains its permanent foundation, just as it was for every earlier way of producing that lives off exploiting the mass of people in some form or other.
At the outset, however, capitalism encounters a form of landed property that does not fit it. Capitalism itself first creates the form that fits, by subjecting agriculture to capital. In this way feudal landed property, clan-held property, or small peasant property tied to a mark community is turned into the economic form that belongs to this mode of production, no matter how different their legal forms may be.
Capitalist production achieves one great thing here. It turns agriculture from a merely empirical routine, mechanically passed down among the least developed part of society, into a conscious scientific use of agronomy—so far as relations shaped by private property make this possible at all. It tears landed property completely away from relations of domination and bondage. And it cuts the land, considered as a condition for labour, completely loose from landed property and from the landowner. For him the land now means nothing but a definite money tax, which his monopoly lets him collect from the industrial capitalist, the farmer. The tie is loosened so far that the landowner can spend his whole life in Constantinople while his landed property lies in Scotland.
In this way landed property takes on its purely economic form. All its earlier political and social decorations and entanglements are peeled off—in short, every traditional addition that the industrial capitalists themselves, and the theorists who speak for them, denounce as useless and absurdly superfluous in the heat of their battle against landed property, as we will see later on.
Rationalizing agriculture—what first makes it possible to farm on a social scale—and reducing landed property to absurdity: these are the great services of capitalist production. Like all its other historical advances, it paid for this one first by utterly impoverishing the direct producers.
Before we turn to the subject itself, a few preliminary remarks are still needed, to guard against misunderstandings.
The presupposition of the capitalist mode of production is this: the people who actually work the soil are wage-labourers, employed by a capitalist — the farmer — who carries on agriculture only as one particular field of exploitation for capital, as a place to put his capital in one particular sphere of production. At fixed dates, yearly for instance, this farmer-capitalist pays the landowner, the owner of the land he exploits, a sum of money fixed by contract (just as someone who borrows money capital pays a set interest) for permission to apply his capital in this particular field of production. That sum of money is called ground-rent, no matter whether it is paid for arable land, building land, mines, fisheries, forests and so on. It is paid for the whole stretch of time for which the landowner has contractually lent, let out, the land to the farmer. So ground-rent is here the form in which landed property is economically realized, valorized — the form in which it brings in a return. And here too we have all three classes that make up the framework of modern society, together and facing one another — wage-labourer, industrial capitalist, landowner.
Capital can be fixed in the earth and incorporated into it. Sometimes this is more short-lived, as with improvements of a chemical kind, manuring and so on; sometimes more permanent, as with drains, irrigation works, levelling, farm buildings and the like. Elsewhere I have called capital incorporated into the earth in this way la terre-capital. It comes under the heading of fixed capital. The interest on the capital incorporated into the earth, and on the improvements the soil thereby gets as an instrument of production, can make up a part of the rent paid by the farmer to the landowner, but it does not constitute ground-rent proper. Ground-rent proper is paid for the use of the soil as such, whether that soil is still in its natural state or has been cultivated. In a systematic treatment of landed property — which lies outside our plan — this part of the landowner's income would have to be set out in detail. A few words on it are enough here.
The shorter-lived capital investments that the ordinary production processes of agriculture bring with them are all made by the farmer, without exception. These investments — and plain cultivation too, whenever it is carried on in any reasonably rational way, that is, is not reduced to a brutal sucking-dry of the soil, as with the former American slaveholders (though against that the landowning gentlemen do secure themselves by contract) — improve the soil, raise what it yields, and turn the earth from mere matter into earth-capital. A cultivated field is worth more than an uncultivated one of the same natural quality. The more permanent fixed capital too, the kind that wears out only over a longer stretch, is for the most part laid out by the farmer — in certain spheres often entirely so. But as soon as the lease term fixed in the contract has run out — and this is one of the reasons why, as capitalist production develops, the landowner tries to make the lease as short as possible — the improvements incorporated into the soil fall to the owner of the soil as his property, an inseparable accident of the soil's substance. When he draws up the new lease he adds the interest on the capital incorporated into the earth to ground-rent proper, whether he lets the land to the farmer who made the improvements or to another one. His rent swells accordingly; or, if he wants to sell the land — we shall see in a moment how its price is fixed — its value has now risen. What he sells is not just the land but the improved land, the capital incorporated into the earth, which cost him nothing.
This is one of the secrets — quite apart from the movement of ground-rent proper — of the growing enrichment of the landowners, of their rents swelling without pause and the money value of their estates rising as economic development goes forward. In this way they pocket a result of social development that came about without any doing of theirs — fruges consumere nati. At the same time it is one of the greatest obstacles to a rational agriculture, because the farmer holds back from every improvement and outlay whose full return he cannot expect to see within his lease term. And as such an obstacle it is denounced again and again, in the last century by James Anderson — the man who really discovered the modern theory of rent, himself a working farmer and, for his time, a notable agronomist — and in our own day by the opponents of the present arrangement of landed property in England.
A. A. Walton, History of the Landed Tenures of Great Britain and Ireland, London 1865, says on this subject, on pages 96 and 97:
Walton says that all the efforts of the numerous agricultural institutions in our country cannot produce any very great or really noticeable results in the real advance of improved cultivation, so long as such improvements raise the value of landed property and the level of the landowner's rent-roll to a far higher degree than they improve the position of the farmer or the agricultural labourer. Farmers in general know as well as the landowner, his steward, or even the president of an agricultural society, that good drainage, plenty of manure and good management, together with more labour applied to clean and work the land thoroughly, will produce wonderful results, both in improving the soil and in increased production. But all this calls for considerable outlay, and farmers also know very well that however much they improve the land or raise its value, the landowners will in the long run reap the main advantage in higher rents and a higher value of the land ... They are shrewd enough to notice what those speakers (landowners and their stewards at agricultural dinners) characteristically always forget to tell them — namely that the lion's share of every improvement the farmer makes must in the end go into the landowner's pocket ... However much the previous farmer may have improved the holding, his successor will always find that the landowner raises the rent in proportion to the land value that earlier improvements have raised.
In agriculture proper this process does not yet appear as clearly as when the soil is used as building ground. By far the greater part of the land in England that is sold for building purposes but not as freehold (that is, not outright) is let by the landowners for ninety-nine years, or for a shorter period if possible. Once that time is up, the buildings fall to the landowner along with the land itself.
Walton reports further that the tenants are bound, when the lease runs out, to hand the house over to the great landowner in good habitable condition, after having paid an excessive ground-rent up to that point. No sooner has the lease expired than the landowner's agent or inspector comes, examines your house, sees that you put it in good repair, then takes possession of it and annexes it to his lord's domain. The fact is that if this system is allowed to work in full for any considerable time longer, the whole of the house property in the kingdom will be in the hands of the great landlords, just as the rural land is. The whole West End of London, north and south of Temple Bar, belongs almost entirely to about half a dozen great landlords, is let at enormous ground-rents, and where the leases have not quite expired they are falling due one after another. The same holds, more or less, of every town in the kingdom. Nor does this greedy system of exclusion and monopoly stop there. Almost all the dock installations in our seaport towns are in the hands of the great leviathans of the land, through the same process of usurpation.
Under these conditions it is clear that when the 1861 census for England and Wales puts the number of house-owners at 36,032 out of a total population of 20,066,224, the relation of owners to the number of houses and to the population would look quite different if the great owners were set on one side and the small ones on the other.
This example of property in buildings matters, first, because it shows clearly the difference between ground-rent proper and the interest on the fixed capital incorporated into the soil, which can form an addition to ground-rent. The interest on the buildings, like the interest on capital a farmer incorporates into the soil in agriculture, falls to the industrial capitalist — the building speculator or the farmer — for the duration of the lease, and in and of itself has nothing to do with the ground-rent that has to be paid every year at fixed dates for the use of the soil. Second, because it shows how, along with the land, capital that was never the landowner's and has been incorporated into it finally falls to him, and the interest on it swells his rent.
Some writers have tried to present ground-rent, the specific economic expression of landed property, as identical with interest. Some of them wrote as spokesmen for landed property against the attacks of the bourgeois economists; others wanted to turn the capitalist system of production into a system of "harmonies" instead of oppositions, Carey for example. The point of the identification would be that the opposition between landowners and capitalists is wiped out.
At the start of capitalist production the opposite method was applied. Back then, popular opinion still counted landed property as the primitive and respectable form of private property, while interest on capital was denounced as usury. Dudley North, Locke and others therefore presented interest on capital as a form analogous to ground-rent, just as Turgot derived the justification of interest from the existence of ground-rent. What those more recent writers forget — leaving aside entirely that ground-rent can exist, and does exist, in pure form, with no addition of any interest for capital incorporated into the soil — is that the landowner in this way not only receives interest on capital belonging to others, which costs him nothing, but gets that capital itself into the bargain, for nothing.
The justification of landed property, like that of all the other forms of property belonging to a particular mode of production, is that the mode of production itself has a historical, transitory necessity, and so do the relations of production and exchange that spring from it. As we shall see later, however, landed property is distinguished from the other kinds of property by this: at a certain level of development it appears superfluous and harmful even from the standpoint of the capitalist mode of production.
Ground-rent can be mixed up with interest in another shape. If that happens, people miss what is specific to ground-rent. Ground-rent shows up as a fixed sum of money. The landowner gets that sum every year for letting someone use a piece of the earth. We have already seen that any fixed money income can be turned into capital. That is, it can be treated as the interest on an imaginary capital. Suppose the average rate of interest is 5 per cent. Then an annual ground-rent of £200 can also be treated as the interest on a capital of £4,000. When ground-rent is capitalized in this way, it makes the purchase price or value of the land. This category is irrational on its face, just as the price of labour is irrational. The earth is not a product of labour, so it has no value either. But a real relation of production lies hidden behind this irrational form. Take a capitalist who buys land that yields an annual rent of £200, and pays £4,000 for it. He then draws the average annual interest of 5 per cent on £4,000. This is just what would happen if he had put that capital into interest-bearing securities, or lent it out directly at 5 per cent interest. Here a capital of £4,000 is valorized at 5 per cent. On that supposition, after twenty years the income from his estate would have replaced the purchase price he paid for it. In England, then, the purchase price of landed estates is reckoned in so many years' purchase. That is only another way of saying: the capitalization of ground-rent. What is really bought is not the soil. It is the ground-rent that the soil yields, reckoned at the ordinary rate of interest. This capitalization of the rent, however, presupposes the rent. The rent cannot be derived and explained the other way round, from its own capitalization. What we start from is that rent exists on its own, outside the sale.
From this it follows that if we take ground-rent as a constant magnitude, the price of land can rise or fall in the opposite direction to the rate of interest. Suppose the ordinary rate of interest were to fall from 5 per cent to 4. Then an annual ground-rent of £200 would be the yearly valorization yielded by a capital of £5,000, not by one of £4,000. The price of the same piece of land would therefore have gone up from £4,000 to £5,000, that is from 20 years' purchase to 25. Reverse the facts, and the reverse follows. This movement of the price of land does not depend on the movement of ground-rent itself. The rate of interest alone regulates it. But we have seen that the rate of profit has a tendency to fall as social development proceeds. So too, therefore, does the rate of interest, in so far as the latter is regulated by the rate of profit. We have also seen that apart from the rate of profit, the rate of interest has a tendency to fall because loanable money capital grows. It follows that the price of land has a tendency to rise, even independently of the movement of ground-rent and of the price of the products of the soil, of which rent forms one part.
Confusing ground-rent itself with the form of interest that it takes on for the buyer of the land — a confusion resting on complete ignorance of the nature of ground-rent — must lead to the strangest false conclusions. Since landed property counts in all old countries as a particularly distinguished form of property, and the purchase of it besides as a particularly secure capital investment, the rate of interest at which ground-rent is bought mostly stands lower than with other capital investments that extend over a longer time; so that, for example, the buyer of land receives only 4 per cent on the purchase price, whereas for the same capital he would otherwise receive 5 per cent — or, what comes to the same thing, he pays more capital for the ground-rent than he would pay for the same annual money income in other investments. From this Herr Thiers, in his altogether wretched book on La Propriété (the reprint of the speech he made against Proudhon in the French National Assembly in 1848), concludes to the lowness of ground-rent, whereas it proves only the height of its purchase price.
That capitalized ground-rent presents itself as the price or value of land, and that the earth is therefore bought and sold like any other commodity, counts with some apologists as a ground for justifying landed property: the buyer has paid an equivalent for it, as for any other commodity, and the greater part of landed property has changed hands in this way. That same ground of justification would then apply to slavery too; since for the slaveholder who has paid cash for the slave, the return from the slave's labour represents only the interest on the capital laid out in buying him. To derive the entitlement of ground-rent to exist from its purchase and sale means, quite generally, justifying its existence out of its existence.
For scientific analysis of ground-rent — the autonomous, specific economic form that landed property takes under the capitalist mode of production — it is important to view it in pure form, keeping out every addition that falsifies and blurs it. On the other side, knowing where these theoretical obscurities come from is just as important: it helps both in understanding what landed property does in practice and in theoretical insight into a mass of facts that run against the concept and nature of ground-rent while still presenting themselves as modes in which ground-rent exists.
Everything the farmer pays the landowner as lease-price, for permission to cultivate the soil, appears in practice, of course, as ground-rent. Whatever parts this tribute is put together from, and wherever it may come from, it has one thing in common with ground-rent proper: a monopoly over a piece of the earth is what enables the so-called landowner to exact the tribute, to impose the charge. And it has a second thing in common with ground-rent proper: it determines the price of land, which, as shown earlier, is nothing but the capitalized revenue from the leasing of the soil.
We have already seen that interest on capital incorporated into the soil can form just such a foreign component of ground-rent — one that, as economic development advances, must form an ever-growing addition to a country's total rental.
But setting this interest aside, the lease-price may hide a deduction — partly, or in certain cases entirely, so that ground-rent proper is completely absent and the land is therefore actually valueless — from average profit, from normal wages, or from both at once. This portion, whether of profit or of wages, appears here in the shape of ground-rent, because instead of falling, as would be normal, to the industrial capitalist or to the wage-labourer, it is paid to the landowner in the form of the lease-price.
Economically speaking, neither the one part nor the other forms ground-rent; but in practice it forms the landowner's income, an economic valorization of his monopoly, every bit as much as genuine ground-rent does — and it has just as much effect in determining the price of land as genuine ground-rent does.
We are not talking here about conditions in which ground-rent — the form of landed property that answers to the capitalist mode of production — exists only formally, while the capitalist mode of production itself does not exist: where the tenant is not himself an industrial capitalist and the way he farms is not a capitalist one. Ireland is a case in point. There the tenant is on average a small peasant.
What he pays the landowner as lease often swallows up not only part of his profit — that is, part of his own surplus labour, which he has a right to as the owner of his own instruments of labour — but also part of the normal wage he would have received for the same amount of labour under other conditions. On top of that, the landowner, who here does absolutely nothing to improve the soil, expropriates him of the small capital he has put into the soil, mostly by his own labour — exactly as a usurer would do in similar conditions. Only the usurer at least risks his own capital in the transaction.
This continuous robbery is what the quarrel over Irish land legislation is about, and that quarrel comes down essentially to this: that a landowner who gives a tenant notice to quit should be compelled to compensate him for the improvements he has made to the soil, or for the capital he has incorporated into it. Palmerston used to answer this cynically:
As was his habit, Palmerston answered this cynically: 'The House of Commons is a house of landed proprietors.'
Nor are we talking about the exceptional conditions in which, even in countries of capitalist production, the landowner can extort a high lease-price that stands in no relation at all to the product of the soil — as, for example, in the English industrial districts, where small patches of land are leased to factory workers, whether for little gardens or for amateur cultivation in their spare time. (Reports of the Inspectors of Factories.)
We are talking about agricultural rent in countries where capitalist production is developed. Among English farmers, for instance, there are a number of small capitalists whom upbringing, education, tradition, competition and other circumstances decide and compel to put their capital into agriculture as farmers. They have to settle for less than the average profit, and to hand over part of it to the landowner in the form of rent. That is the only condition on which they are allowed to put their capital into the soil, into agriculture. Landowners everywhere have a big influence on legislation, and in England a predominant one, so that influence can be exploited to cheat the whole class of farmers.
The Corn Laws of 1815 are one instance: a tax on bread, avowedly imposed on the country to secure the idle landowners the continuation of the rental that had grown abnormally during the Anti-Jacobin War. What they did was keep the prices of agricultural products above the level to which they would have fallen under free corn imports — apart from a few exceptionally fruitful years. What they did not do was keep prices at the height the legislating landowners had decreed as normal prices, in the sense that those prices formed the legal limit for importing foreign corn. Yet it was under the impression of those normal prices that the lease contracts were concluded. As soon as the illusion burst, a new law was made with new normal prices, which were just as much the powerless expression of landed property's greedy fantasy as the old ones. In this way the farmers were cheated from 1815 into the 1830s. Hence, throughout that whole time, the constant theme of 'agricultural distress'. Hence, in that period, the expropriation and ruin of an entire generation of farmers, and their replacement by a new class of capitalists.
A far more general and more important fact, though, is that the wages of the agricultural labourers themselves are pressed down below their normal average level. Part of the wage is taken off the worker, becomes a component of the lease-price, and so flows to the landowner instead of the worker under the mask of ground-rent. In England and Scotland this is the ordinary state of affairs, apart from a few favourably situated counties.
The work of the parliamentary committees of inquiry into wage levels, set up in England before the corn laws came in — still the most valuable contribution to the history of wages in the nineteenth century, and almost entirely unexploited, and at the same time a pillory that the English aristocracy and bourgeoisie set up for themselves — proved conclusively and beyond all doubt that the high rents, and the rise in land prices that went with them during the Anti-Jacobin War, were in part owed to nothing but the deduction from wages, and to pressing wages even below the physical minimum; that is, to part of the normal wage being paid over to the landowner. Various circumstances had made this possible, among them the depreciation of money and the way the Poor Laws were handled in the agricultural districts, while at the same time the farmers' incomes rose enormously and the landowners enriched themselves fabulously. Indeed, one of the main arguments for bringing in the corn duties, from farmers and landowners alike, was that it was physically impossible to press the wages of agricultural day-labourers down any further. This state of affairs has not essentially changed, and in England, as in all European countries, part of the normal wage still goes into ground-rent as before.
When the Earl of Shaftesbury, then Lord Ashley, one of the philanthropic aristocrats, was so extraordinarily moved by the condition of English factory workers that he made himself their parliamentary spokesman in the Ten Hours agitation, the spokesmen of the industrialists published, in revenge, statistics on the wages of agricultural day-labourers in the villages that belonged to him (see Volume 1, Chapter 25, 5, e: The British Agricultural Proletariat). These plainly showed how a part of this philanthropist's ground-rent consists of nothing but the plunder that his tenants carry out for him on the wages of the agricultural labourers. The publication is also interesting because the facts in it may boldly stand beside the worst that the committees of 1814 and 1815 brought to light. Whenever circumstances force a momentary rise in the wages of agricultural day-labourers, the farmers' cry goes up that raising wages to their normal level, such as prevails in other branches of industry, is impossible and must ruin them without a simultaneous reduction of ground-rent. This contains the admission that under the name of ground-rent a deduction from wages is made by the farmers and paid over to the landowner.
Between 1849 and 1859, for instance, agricultural wages in England rose as a result of a coming-together of overwhelming circumstances: the exodus from Ireland, which cut off the supply of agricultural labourers from there; the extraordinary absorption of the agricultural population by factory industry; wartime demand for soldiers; extraordinary emigration to Australia and the United States (California); and other reasons not to be gone into further here. At the same time, apart from the bad harvests of 1854-56, average cereal prices fell by more than 16 per cent during this period. The farmers clamoured for rents to be reduced. In individual cases they managed it. On average they failed in this demand. They took refuge in cutting production costs, among other ways by bringing in locomotive steam-engines and new machinery on a large scale, which partly replaced horses and drove them out of the farming economy, and partly, by releasing agricultural day-labourers, produced an artificial over-population and hence a fresh fall in wages. And this happened despite the general relative decline of the agricultural population during that decade compared with the growth of the total population, and despite the absolute decline of the agricultural population in some purely agricultural districts.
Fawcett, at that time Professor of Political Economy at Cambridge, said the same thing at the Social Science Congress on 12 October 1865:
Fawcett reported that the agricultural day-labourers were beginning to emigrate, and that the farmers were beginning to complain that they would not be able to pay rents as high as they were used to paying, because labour was becoming dearer as a result of the emigration.
So high ground-rent here is directly the same as low wages. And to the extent that the level of the price of land is set by this factor that raises ground-rent, land's value going up is the same as labour's value going down; a high price of land is the same thing as a low price of labour.
The same holds good for France.
Rubichon's testimony for France runs like this: the lease-price rises because the price of bread, wine, meat, vegetables and fruit rises on the one side, while on the other the price of labour stays unchanged. If older people compare the accounts of their fathers, which takes us back roughly 100 years, they will find that the price of a day's work in rural France was at that time exactly the same as it is today. The price of meat has tripled since then ... Who is the victim of this upheaval? Is it the rich man, who owns the farm, or the poor man, who works it? ... The rise in lease-prices is proof of a public disaster. (Du Mécanisme de la Société en France et en Angleterre, by M. Rubichon, 2nd edition, Paris, 1837, p. 101.)
Examples of rent as a consequence of a deduction from average profit on the one hand and from average wages on the other:
Morton, already quoted above — a land agent and agricultural engineer — says that in many districts it has been noticed that the rent for large farms is lower than for smaller ones, because competition for the smaller ones is usually greater than for the larger, and because small farmers, who are seldom in a position to throw themselves into any other business than agriculture, are often willing to pay a rent that they themselves know to be too high, driven on by the need to find a more suitable occupation. (John L. Morton, The Resources of Estates, London 1858, p. 116.)
This difference, however, is said to be gradually disappearing in England, and in his view emigration, precisely among the class of small farmers, has a great deal to do with it. The same Morton gives an example in which a deduction from the wage of the farmer himself, and therefore still more certainly from the wages of the men he employs, evidently enters into ground-rent. This is on farms of under 70-80 acres (30-34 hectares), which cannot keep a two-horse plough.
If the farmer does not work with his own hands as industriously as any labourer, he cannot keep going on his holding. If he leaves the carrying out of the work to his men and confines himself to merely supervising them, he will most probably find before long that he is unable to pay his rent. (Ibid., p. 118.)
From this Morton concludes that, if the farmers in that area are not very poor, holdings ought not to fall below 70 acres, so that a tenant can keep two or three horses.
Here is the extraordinary wisdom of Monsieur Léonce de Lavergne, member of the Institute and of the Central Agricultural Society. In his Économie rurale de l'Angleterre (quoted from the English translation, London, 1855) he draws up the following comparison of the yearly gain from cattle — cattle that work in France and not in England, where horses have taken their place (p. 42):
Yet the higher product now emerges here because, by his own account, milk in England costs twice what it does in France, while for meat he assumes prices are identical in both countries (p. 35); so England's milk product would come down to £8 million, and the overall product would fall to £28 million, exactly as in France. Monsieur Lavergne is really going a bit far when he lets both the amounts produced and the price differences enter the same reckoning together, with the result that, should England produce certain items at a higher cost than France—which at most means a larger profit for farmers and landowners—the outcome appears as an advantage of English agriculture.
Lavergne proves at p. 48 that he not only knows the economic successes of English agriculture but also believes in the prejudices of English farmers and landowners:
One great drawback, he writes, is usually bound up with cereal crops ... they exhaust the soil that bears them.
Lavergne does not only believe that other plants do no such thing; he believes that fodder crops and root crops enrich the soil:
Forage plants, he writes, draw the chief elements of their growth out of the atmosphere, while they give back to the soil more than they take from it; so they help, directly and again through their conversion into animal manure, in two ways to make good the damage that cereal crops and other exhausting harvests have done; the principle, therefore, is that they should at least alternate with those crops — in this consists the Norfolk rotation. (pp. 50, 51.)
No wonder that Lavergne, who believes the English rural mind when it tells him these fairy stories, also believes it when it tells him that since the repeal of the Corn Laws the wages of English rural labourers have lost their former abnormal character. See what we said earlier on this subject in Volume 1, Chapter 25, 5. But let us also hear Mr John Bright's speech in Birmingham on 13 December 1865. After speaking of the five million families who are not represented in Parliament at all, he goes on:
Among these, Bright said, there is one million, or rather more than one million, in the United Kingdom, entered on the unhappy list of paupers. Then there is another million only just keeping its head above pauperism, but in constant danger of becoming paupers too; their situation and their prospects are no better than that. Now let his hearers look at the ignorant lower layers of this part of society: their outcast position, their poverty, their suffering, their complete hopelessness. Even in the United States, even in the Southern states during the reign of slavery, every Negro held the belief that a jubilee would come for him some time. But for these people, for this mass of the lowest layers in our country, there exists — he was there to say it — neither the belief in any improvement nor even a longing for one. Had they read the recent newspaper note about John Cross, an agricultural day-labourer in Dorsetshire? He worked six days a week, had an excellent testimonial from his employer, with whom he had worked for twenty-four years at 8 shillings a week. John Cross had a family of seven children to keep out of that wage in his hovel; to warm his sickly wife and her baby he took — legally speaking, Bright believed, he stole it — a wooden hurdle worth sixpence. For this offence the magistrates sentenced him to fourteen or twenty days in prison. He could tell them that many thousands of cases like John Cross's are to be found throughout the country, and especially in the south, and that their condition is such that so far the most earnest investigator has not been able to solve the mystery of how they keep body and soul together.
Now cast your eyes over the whole country, he went on, and look at these five million families and the desperate state of this layer among them. Can one not truly say that the mass of the nation shut out from the vote toils and toils again and hardly knows any rest? Compare it with the ruling class — but if he did that, he would be accused of communism ... but compare this great toiling and voteless nation with the part that may be counted the governing classes. Look at their wealth, their pomp, their luxury. Look at their weariness — for there is weariness among them too, but it is the weariness of satiety — and see how they hurry from place to place as if the only thing at stake were discovering new pleasures. (Morning Star, 14 December 1865.)
The argument that follows shows how surplus labour, and with it surplus product in general, gets taken for ground-rent — for a piece of the surplus product that is specific in both amount and kind, at least on the basis of the capitalist mode of production.
The natural basis of surplus labour in general — a natural condition without which it cannot happen at all — is this: nature supplies the means of subsistence, whether as plant or animal products of the land or in fisheries and so on, within a working time that does not swallow up the whole working day. This natural productivity of agricultural work (which here includes plain gathering, hunting, fishing and stock-raising) is the basis of all surplus labour, just as all labour is first and originally aimed at taking and producing food. (In colder climates the animal also provides a pelt for warmth; there are cave-dwellings too, and so on.)
The same confusion between surplus product and ground-rent turns up in a different wording in Mr Dove.
Originally, agricultural work and industrial work are not separate from each other; industrial work attaches itself to agricultural work. The surplus labour and the surplus product of a farming clan, a common household or a family take in agricultural and industrial work alike. The two go hand in hand. Hunting, fishing and farming are impossible without the right implements. Spinning and weaving are at first carried on as sideline work on the land.
Earlier we showed that just as one worker's labour falls into necessary labour and surplus labour, so the whole working class's labour can be divided in such a way that the part producing all the means of subsistence for the class (including the means of production this requires) performs the necessary labour for society as a whole. The labour done by the entire remaining part of the working class can be looked at as surplus labour.
But necessary labour by no means takes in agricultural work alone; it also takes in the labour that produces every other article that the worker's average consumption necessarily includes. And, socially speaking, one group performs only necessary labour because the other performs only surplus labour, and the other way round. This is only a division of labour between them. The same goes for the division of labour between agricultural and industrial workers in general: the purely industrial character of the work on one side answers to the purely agricultural character of the work on the other.
This purely agricultural labour is in no way something that grew up of itself; it is itself a product of social development — a very modern one, and by no means reached everywhere — and it answers to a quite particular stage of production. Just as one part of agricultural labour is fixed in products that serve only luxury, or form raw materials for industry, and by no means go into food, let alone food for the masses, so on the other side one part of industrial labour is fixed in products that serve as necessary means of consumption for agricultural and non-agricultural workers alike. It is false to conceive this industrial labour — from the social standpoint — as surplus labour. In part it is just as much necessary labour as the necessary part of agricultural work is. It is also only the separated-out form of a part of the industrial labour that was once linked naturally with agricultural labour — the necessary mutual complement of the purely agricultural labour that has now broken away from it. (Looked at just materially, 500 power-driven weavers, say, produce surplus cloth to a far higher degree — more, that is, than their own clothing requires.)
When we look at the forms of appearance of ground-rent — that is, the lease-price paid to the landowner under this heading for the use of the soil, whether the soil serves production or consumption — one thing must be held on to: the price of things that have no value in and of themselves can be settled by quite accidental combinations of circumstances. Such things either are not a product of labour at all, like land, or at least cannot be reproduced by labour, like antiques, works of art by particular masters, and so on. To sell a thing, nothing more is needed than that it can be monopolized and alienated.
When ground-rent is dealt with, three main errors have to be avoided, and they cloud the analysis.
First: the different forms of rent get mixed up with one another. But those forms belong to different stages in the development of the social production process.
Whatever the particular form of rent may be, all its types have something in common: the appropriation of rent is the economic form in which landed property realizes itself, and ground-rent on its side presupposes landed property — particular individuals owning particular pieces of the globe.
This holds whatever the form of ownership. The owner may be the person who stands for the community, as in Asia, Egypt and so on; or the landed property may be no more than an accidental accompaniment of the property that certain people have in the persons of the immediate producers, as under slavery or serfdom; or it may be the pure private property of non-producers in nature, a bare ownership title to land; or finally it may be a relation to the land which, as with colonists and small peasant proprietors, seems directly contained in the fact that the immediate producers take and produce the products of particular pieces of land, given that their labour is isolated and not socially developed.
This common feature of the different forms of rent — that they are the economic realization of landed property, the legal fiction by which different individuals have exclusive possession of particular parts of the globe — is exactly what lets the differences between them be overlooked.
Second, every bit of ground-rent is surplus-value, the outcome of surplus labour. In its less developed shape, rent in kind, it remains directly a surplus product. That is why people slip into an error about the rent that goes with capitalist production — rent that always sits above profit, above a piece of commodity value that is itself made of surplus-value, and so of surplus labour. They think that once they have set out the general conditions for surplus-value and profit to exist at all, they have also accounted for this separate, specific piece of surplus-value. Those general conditions come in two sides. On the subjective side, the immediate producers must work past the time needed to reproduce their own labour-power, that is, themselves. They must do surplus labour of some kind. On the objective side, they must also be able to do it: natural conditions have to be such that one part of their available labour-time is enough to reproduce them and keep them going as producers, so that making their necessary means of subsistence does not use up their whole labour-power. Here the fertility of nature marks a boundary, a point of departure, a basis. On the other side, the growth of the social productive power of their labour marks the other one. Looked at more closely, since food production is the first condition of their life and of all production whatsoever, the labour used there — agricultural labour in the widest economic sense — has to be fruitful enough that the whole available labour-time is not swallowed by food production for the immediate producers. Only then is agricultural surplus labour possible, and with it an agricultural surplus product. Pushed further, the whole agricultural labour of one part of society — necessary and surplus together — must suffice to produce the necessary food for society as a whole, and so for the non-agricultural workers too. That makes possible the great split between farmers and industrial workers, and likewise the split between those farmers who produce food and those who produce raw materials. True, the labour of the direct food producers divides, for them, into necessary and surplus labour. Yet seen in relation to society, it stands for the necessary labour needed simply to produce food. The same thing, by the way, happens with every division of labour inside society as a whole, as opposed to the division of labour inside a single workshop. It is the labour needed to make particular articles, to meet a particular social need for particular articles. If this distribution is in due proportion, the products of the different groups sell at their values — at a later stage of development, at their prices of production — or else at prices that are modifications of those values, or of those prices of production, as fixed by general laws. Here, in fact, the law of value makes itself felt not for single commodities or articles but for the total products of each particular sphere of social production that the division of labour has set up as independent. So not only does each single commodity get no more labour-time than is necessary; out of society's total labour-time, only the proportional quantity that is needed goes to the different groups. Use-value remains the condition. For a single commodity, its use-value depends on its satisfying a need by and for itself. For society's mass of products, it depends on that mass matching the quantitatively determined social need for each particular kind of product, and thus on labour being spread among the different spheres of production in proportion to those social needs, which are quantitatively bounded. (This point is to be brought in when the distribution of capital among the different spheres of production is treated.) Social need — that is, use-value raised to a social scale — here appears as what decides the quota of society's total labour-time that falls to the various particular spheres of production. But this is only the same law already on show in the single commodity: its use-value is the precondition of its exchange-value, and so of its value.
That point bears on necessary and surplus labour only in this way. If the proportion is broken, the value of the commodity — and therefore the surplus-value inside it — cannot be realized. Suppose, for example, that too much cotton cloth has been made in proportion, even though only the labour-time necessary under the given conditions is realized in this total product of cloth. Too much social labour has been spent on this one branch altogether, meaning that part of the product is useless. The whole lot therefore sells only as though it had been made in the necessary proportion. This quantitative barrier on the shares of social labour-time that can be used in the various particular spheres of production is just a further developed expression of the law of value in general. Necessary labour-time does, it is true, carry a different meaning here: only so much of it is needed to satisfy the social need. The restriction comes in through the use-value. Under the given conditions of production, society can put only so much of its total labour-time into this one kind of product. But the particular form, whether it be profit or rent, has nothing to do with the subjective and objective conditions of surplus labour and surplus-value in general. They hold for surplus-value as such, no matter what particular form it takes. So they do not explain ground-rent.
The third of the three main errors. Precisely where landed property is turned to economic account — where ground-rent develops — one thing stands out as especially peculiar: the amount of rent is not determined at all by anything the person who receives it does. It is determined instead by a development of social labour that goes on independently of him and in which he has no part. That is why something easily gets taken as a peculiar property of rent (and of the product of agriculture in general) which is in fact common to every branch of production and to all its products, on the basis of commodity production — and more precisely of capitalist production, which is commodity production through and through.
Ground-rent's level rises, and the value of land rises along with it, as society develops; both come out of society's total labour. This happens on two fronts. The market grows, and demand for what the soil yields grows with it. Demand for the soil itself also grows directly, because every possible line of business, non-agricultural ones included, competes for soil as a condition of production. More precisely — if we speak only of agricultural rent proper — rent, and therefore the value of land, moves with the market for the soil's product, and so with the growth of the non-agricultural population, with their needs and their demand, partly for food and partly for raw materials. It belongs to the nature of the capitalist mode of production that it continually shrinks the agricultural population in relation to the non-agricultural. In industry in the narrower sense, the growth of constant capital relative to variable capital is tied to an absolute growth of variable capital, even though that capital declines relatively. In agriculture, by contrast, the variable capital required to exploit a particular piece of soil falls absolutely, so it can grow only in so far as new soil is cultivated; and this in turn presupposes a still greater growth of the non-agricultural population.
In fact, what we have here is not a phenomenon peculiar to agriculture and its products. Rather, once commodity production is the basis — and its absolute form, capitalist production — the same holds for every other branch of production and every other product.
These products are commodities, use-values that possess an exchange-value — and one that can be realized, turned into money — only to the extent that other commodities form an equivalent for them, that other products confront them as commodities and as values; that is, only to the extent that they are not produced as direct means of subsistence for their own producers, but as commodities, as products that become use-values only by being converted into exchange-value (money), by being alienated. The market for these commodities develops through the social division of labour; the separation of productive labours turns their respective products reciprocally into commodities, into equivalents for one another, and makes them serve one another reciprocally as markets. There is nothing at all peculiar to agricultural products in this.
Rent can develop as money-rent only on the basis of commodity production, and more precisely of capitalist production, and it develops in the same measure that agricultural production becomes commodity production — that is, in the same measure that non-agricultural production develops independently over against it. For in that measure the product of agriculture becomes a commodity, an exchange-value and a value. In the same measure that commodity production, and therefore the production of value, develops with capitalist production, the production of surplus-value and surplus product develops too.
But in the same measure that the latter develops, there develops in landed property the ability — by way of its monopoly of the earth — to intercept a growing part of this surplus-value, and so to raise the value of its rent and the price of the land itself. The capitalist is still an active functionary in the development of this surplus-value and surplus product. The landowner has only to intercept the share in surplus product and surplus-value that grows in this way without any doing of his own.
This is what is peculiar about his position — not the fact that the value of the products of the land, and therefore of the land, keeps growing in the measure that the market for them expands, demand increases, and with it the world of commodities that confronts the product of the land, in other words the mass of non-agricultural commodity producers and the scale of non-agricultural commodity production. But since this happens without his doing, it appears to him as something specific that the mass of value, the mass of surplus-value, and the transformation of a part of this surplus-value into ground-rent should depend on the social process of production, on the development of commodity production in general. That is why Dove, for instance, wants to develop rent out of this. He says that rent does not depend on the mass of the agricultural product but on its value; and this value depends on the mass and the productivity of the non-agricultural population. But this holds of every other product as well — that it develops as a commodity only partly with the mass, partly with the variety of the series of other commodities that form equivalents for it. This was already shown in the general presentation of value. On the one hand, the exchangeability of a product depends altogether on the multiplicity of the commodities that exist outside it. On the other hand, the mass in which it can itself be produced as a commodity depends in particular on that.
No producer taken in isolation produces a value or a commodity — the industrialist no more than the farmer. His product becomes a value and a commodity only in a determinate social context. First, in so far as it appears as an expression of social labour, and so his own labour-time appears as a part of social labour-time in general; second, in so far as this social character of his labour appears as a social character stamped on his product, in its money character and in its general exchangeability as determined by its price.
So, on one hand, what gets explained is not rent itself but surplus-value — or, in an even more narrow-minded version, surplus product in general. On the other hand, a blunder follows: a character that belongs to every product as a commodity and as a value is pinned on farm products alone. The whole thing becomes flatter still if the move is from value's general determination down to how some particular commodity value is realized. No commodity can realize its value outside the circulation process, and whether it does so, and how far, turns on the market conditions of the moment.
Ground-rent's own peculiarity, then, does not lie in the fact that farm produce comes to be values and functions as values. It does not lie in this either: that such produce, as commodities, faces other commodities, while non-agricultural products face it as commodities; or that they emerge as specific expressions of social labour. The peculiarity lies elsewhere: as the conditions take shape under which farm produce becomes values (commodities), and as the conditions take shape under which those values are realized, the power of landed property grows too. That power lets it take an increasing part of these values, which were created without any contribution from landed property; and an increasing part of surplus-value changes into ground-rent.