We need to be clear about where the real difficulty lies when ground-rent is treated from the standpoint of modern economics — the theoretical expression of the capitalist mode of production. A great many newer writers still have not grasped this, as every renewed attempt to explain ground-rent 'anew' proves. Its novelty, here, is almost always a relapse into standpoints long since superseded. The difficulty is not to explain, in general, the surplus product produced by agricultural capital and the surplus-value that answers to it. That question is, rather, solved in the analysis of surplus-value — the surplus-value that all productive capital produces, in whatever sphere it may be invested. The difficulty is to show where, after the equalization of surplus-value among the various capitals into average profit — a share in the total surplus-value produced by social capital in all spheres together, in proportion to their relative sizes — after this equalization, after all the surplus-value there is to distribute has apparently already been distributed, where the excess part of that surplus-value still comes from, the part that capital laid out in the land pays to the landowner in the form of ground-rent. Quite apart from the practical motives that goaded the modern economists into this enquiry — as spokesmen for industrial capital against landed property, motives we shall indicate more closely in the chapter on the history of ground-rent — the question was of decisive interest to them as theorists. To concede that the phenomenon of rent for capital invested in agriculture stems from a special effect of the sphere of investment itself, from properties belonging to the earth's crust as such, would be to renounce the concept of value itself, and with it any possibility of scientific knowledge in this field. Even the plain observation that rent is paid out of the price of the agricultural product — which holds even where rent is paid in kind, if the farmer is to squeeze out his price of production — showed the absurdity of explaining the excess of this price over the ordinary price of production, that is, the relative expensiveness of agricultural products, by agriculture's natural productivity exceeding that of other branches of industry. For the opposite holds: the more productive the labour, the cheaper every aliquot part — every equal share — of its product, because the same quantity of labour — hence the same value — is then represented in a greater mass of use-values.

So the whole difficulty in analysing rent was to explain the excess of agricultural profit over the average profit: not surplus-value as such, but the extra surplus-value peculiar to this sphere of production — and so, too, not the 'net product', but the amount by which it exceeds the net product of the other branches of industry.

The average profit is itself a product: something formed by the social life-process as it runs under quite definite historical relations of production, and something that, as we have seen, presupposes a great deal of mediation. Before one can speak at all of an excess over the average profit, that average must itself have been established as the yardstick and — as it is in the capitalist mode of production — as the regulator of production in general. So in forms of society where it is not yet capital that does the work of compelling all surplus labour and of taking all surplus-value into its own hands in the first instance — where capital has not yet brought society's labour under itself, or has done so only here and there — there can be no talk at all of rent in the modern sense: of rent as an excess over the average profit, that is, over each individual capital's proportionate share of the surplus-value that society's total capital produces.

It shows M. Passy's naivety (more on him below) that he talks of rent even in the primitive state as an excess over profit — over a historically determined social form of surplus-value, which, on M. Passy's account, can therefore exist more or less without any society at all.

The older economists were only just starting to analyse the capitalist mode of production, which in their day was still undeveloped. For them, the analysis of rent either raised no difficulty at all, or raised one of an altogether different kind.

Petty, Cantillon, and writers closer to feudal times generally take ground-rent as the normal form of surplus-value as such. Profit, for them, still blurs into wages; at the very most it looks like a piece of that surplus-value which the capitalist squeezes out of the landowner. So they start from a state of affairs in which two things hold. First, the agricultural population is still by far the greater part of the nation. Second, the landowner still looks like the person who takes the surplus labour of the immediate producers in the first instance, through his monopoly of landed property — so landed property still looks like the chief condition of production. From that standpoint, the opposite question could not yet exist: the question, asked from the standpoint of the capitalist mode of production, of how landed property manages to pull back out of capital a part of the surplus-value that capital has produced (that is, squeezed out of the immediate producers) and already taken in the first instance.

With the Physiocrats the difficulty is already of a different kind. They were in fact the first systematic interpreters of capital, and they try to analyse the nature of surplus-value as such. But for them that analysis comes to the same thing as the analysis of rent — the only form in which surplus-value exists for them. So rent-bearing, or agricultural, capital is for them the only capital that produces surplus-value, and the agricultural labour it sets in motion the only labour that creates surplus-value — and therefore, reasoning quite rightly from the capitalist standpoint, for them the only productive labour. And the production of surplus-value counts for them, quite rightly, as the determining thing. Setting aside other merits that belong in Volume 4, their great merit is this: they go back from commercial capital, which works only in the sphere of circulation, to productive capital. That is against the Mercantile System, which in its crude realism is the real vulgar economics of that time; its practical interests pushed the beginnings of scientific analysis by Petty and his successors entirely into the background. Incidentally, what is at issue here, in the criticism of the Mercantile System, is only its conceptions of capital and surplus-value. It has been remarked earlier that the Monetary System correctly proclaims production for the world market, and the transformation of the product into a commodity, hence into money, as a precondition and a condition of capitalist production. In its continuation as the Mercantile System, what decides is no longer the transformation of commodity value into money but the production of surplus-value — though from the circulation sphere's standpoint, a standpoint without the concept, and in such a way that this surplus-value shows up as surplus money, as a surplus in the balance of trade. But at the same time it is what correctly characterizes the interested merchants and manufacturers of that day, and what fits the period of capitalist development they represent, that the point was a speeded-up development of capital. In the transformation of feudal agricultural societies into industrial ones, and in the matching industrial struggle of nations on the world market, that development was not to be reached by the so-called natural road but by coercive means. It makes an enormous difference whether a nation's capital turns into industrial capital gradually and slowly, or whether that transformation is hurried along — by the tax they lay, through protective duties, mainly on landowners, middle and small peasants and artisans, by the accelerated expropriation of independent immediate producers, by the forcibly accelerated accumulation and concentration of capitals, in short by the accelerated creation of the conditions of the capitalist mode of production. It also makes an enormous difference to how far the nation's natural productive power is exploited capitalistically and industrially. So the national character of the Mercantile System is no mere phrase in the mouths of its spokesmen. Under the pretext of dealing only with the wealth of the nation and the resources of the state, they in fact declare the interests of the capitalist class, and enrichment in general, to be the state's final purpose, and they proclaim bourgeois society against the old supernatural state. Yet at the same time they are aware that the development of the interests of capital and of the capitalist class — of capitalist production — has become the basis of national power and national predominance in modern society.

The Physiocrats are also right about something else: all production of surplus-value, and with it all development of capital, rests — as regards its natural foundation — on the productivity of agricultural labour.

Suppose people were not able at all to produce, in a working day, more means of subsistence — and in the narrowest sense, more agricultural products — than each worker needs to reproduce himself. Suppose the daily spending of a worker's whole labour-power were just enough to make the means of subsistence he cannot do without. Then neither a surplus product nor surplus-value could be spoken of at all.

A productivity of agricultural labour that goes beyond the worker's individual needs is the basis of all society, and above all the basis of capitalist production. Capitalist production detaches an ever-growing part of society from producing its immediate means of subsistence and turns those people, as Steuart says, into free hands — available for exploitation in other spheres.

But what is one to say of more recent economic writers like Daire, Passy and the rest? At the twilight of classical economics, indeed at its deathbed, they repeat the most primitive ideas about the natural conditions of surplus labour, and hence of surplus-value as such, and believe they are bringing out something new and striking about ground-rent — long after that ground-rent has been developed as a particular form and a specific part of surplus-value.

This is exactly what marks out vulgar economics: at a time when it is flat, stale and false, it repeats what was new, original, profound and justified at a particular stage of development that has since been outlived. In doing so it admits that it has not even an inkling of the problems that occupied classical economics. It confuses those problems with questions that could be posed only from a lower standpoint of the development of bourgeois society.

The same goes for its restless, self-satisfied chewing over of the Physiocratic propositions about free trade. Those propositions lost every last bit of theoretical interest long ago, however much they may still interest this or that state in practice.

In a true natural economy, none of the agricultural product enters circulation, or only a very small part of it — and even of the part that makes up the landowner's revenue, only a relatively small piece does. That was so on many of the large Roman estates, on Charlemagne's villas, and more or less throughout the Middle Ages (see one history of labour). The product and the surplus product of such great estates are by no means only the products of agricultural work. They take in the products of industrial work as well. Domestic handicraft and manufacture, carried on alongside farming and resting on it, is the very condition of the way of producing that this natural economy rests on — in European antiquity and the Middle Ages, and still today in the Indian village community, where its traditional organization has not yet been destroyed. The capitalist mode of production does away with this connection completely — a process you can study on a large scale in England, especially in the last third of the eighteenth century. People who had grown up in more or less semi-feudal societies, Herrenschwand for instance, still at the end of the eighteenth century took this separation of farming from manufacture for a foolhardy social gamble, an existence risked beyond all understanding. And even in the ancient agricultural economies that come closest to capitalist farming — Carthage and Rome — the resemblance is greater with the plantation economy than with the form that really corresponds to capitalist exploitation. A formal analogy — which, to anyone who has grasped the capitalist mode of production and does not, like Herr Mommsen, discover capitalist production in every money economy, shows itself in all its essential points to be a thorough deception — is not to be found at all in ancient mainland Italy, but only perhaps in Sicily, because Sicily existed as Rome's agricultural tributary, so that its farming was essentially aimed at export. There you find farmers in the modern sense.

A wrong idea of what rent is rests on a fact: rent in kind has dragged itself out of the medieval natural economy into modern times, in complete contradiction to the conditions of the capitalist mode of production — partly in the church's tithes, partly as a curiosity kept alive by old contracts. And so it comes to appear that rent springs not from the price of the agricultural product but from its sheer mass, not from social relations but from the earth.

We showed earlier that although surplus-value is represented in a surplus product, the reverse does not hold: a surplus product, in the sense of a mere increase in the mass of the product, does not represent surplus-value. It can represent a minus of value. Otherwise the cotton industry in 1860 would have had to represent an enormous surplus-value as against 1840 — when in fact the price of yarn had fallen. Rent can grow enormously after a run of bad harvests, because the price of corn rises, even though this surplus-value is represented in an absolutely shrinking mass of dearer wheat. And the other way round: after a run of good years rent can fall, because the price falls, even though the lower rent is represented in a larger mass of cheaper wheat.

Now about rent in kind, two things. First: it is a mere tradition dragged over from a mode of production that has outlived its day, keeping itself alive as a ruin; and its contradiction with the capitalist mode of production shows in the fact that it disappeared from private contracts by itself, and that where legislation could step in, as with the church tithes in England, it was violently thrown off as an incongruity. Second: where it did persist on the basis of the capitalist mode of production, it was nothing and could be nothing other than money rent dressed in medieval clothes.

Take a quarter of wheat at 40s. Some of it has to be sold to replace the wages it contains, so that they can be laid out again; some more has to be sold to pay the share of the taxes that falls on it. Seed and part of the fertilizer, where the capitalist mode of production and with it the division of social labour are developed, enter reproduction as commodities and must therefore be bought back — so another part of the quarter must be sold to supply that money. Insofar as they do not actually have to be bought as commodities but are taken in kind out of the product itself, to go back into its reproduction as conditions of production — as happens not only in farming but in many branches that produce constant capital — they still enter the account as money of account and are deducted as components of the cost price. Whatever machinery, and fixed capital in general, wears out has to be made good in money. Finally there is the profit, reckoned on the sum of these costs, whether in real money or in money of account. That profit shows up as a definite share of the gross product, a share its price fixes. And the part that is then left over forms the rent.

If the contractual rent in kind is greater than this residue, which is determined by price, then it is not rent but a deduction from profit. Because this is possible at all — because rent in kind does not follow the product's price and so can come to more or less than the real rent, and can therefore form a deduction not only from profit but also from the parts needed to replace the capital — it is an outdated form. In fact, insofar as it is rent in substance and not only in name, it is determined exclusively by the excess of the product's price over its production costs. It merely treats this variable magnitude as a constant.

And yet it is such a homely picture: the product in kind first suffices to feed the workers, then leaves the capitalist farmer more food than he needs, and the surplus over and above that forms the natural rent. Just as if a calico manufacturer made 200,000 yards. Those yards not only clothe his workers and more than clothe his wife, all his offspring and himself; they leave him calico to sell, and finally calico to pay a hefty rent with. It is all so simple! Deduct the production costs from the 200,000 yards and a surplus of calico must remain over as rent. To deduct the production costs of £10,000 from 200,000 yards of calico, without knowing the sale price of the calico — to deduct money from calico, an exchange-value from a use-value, and then determine the surplus of yards of calico over pounds sterling — is in fact a naive idea. It is worse than squaring the circle, which at least rests on the notion of the limits in which straight line and curve merge. But it is M. Passy's recipe. Deduct money from calico before the calico has been turned into money, in thought or in reality! The surplus is the rent, and it is to be grasped 'naturally' (see, for instance, one writer of the period), not by 'sophistical' trickery! This whole restoration of natural rent comes down to that folly: deducting the production price from so many bushels of wheat, subtracting a sum of money from a cubic measure.

Take ground-rent in its simplest form — labour rent. The direct producer spends part of the week working land that is in fact his, with tools that are his in fact or in law, and the other days of the week working on the landlord's estate, for the landlord, unpaid. Here the matter is still completely clear: rent and surplus-value are identical. Rent, not profit, is the form in which the unpaid surplus labour is expressed here.

How far the worker here (a self-sustaining serf) can win a surplus over his indispensable means of subsistence — over what we would call wages in the capitalist mode of production — depends, other things being equal, on how his working time is split between labour-time for himself and the statute-labour he owes the landlord. This surplus over the most necessary means of subsistence, the seed of what appears as profit in the capitalist mode of production, is therefore wholly determined by the level of ground-rent. And here that rent is not only directly unpaid surplus labour: it also appears as such — unpaid surplus labour for the 'proprietor' of the conditions of production, which here coincide with the land, and in so far as they are distinct from it count only as its accessory.

That the serf's product must here be enough to replace his conditions of labour as well as his subsistence is a circumstance that stays the same in every mode of production. It is no result of this specific form; it is a natural condition of all continuing, reproductive labour in general — of any production that goes on, which is always also reproduction, and so reproduction of its own conditions of operation.

It is also clear that in every form in which the direct worker remains the 'possessor' of the means of production and conditions of labour needed to produce his own means of subsistence, the property relation must appear at the same time as a direct relation of domination and servitude, and the direct producer as unfree — an unfreedom that can weaken from serfdom with statute-labour down to a mere obligation to pay tribute.

The direct producer here is, by presupposition, in possession of his own means of production — the objective conditions of labour he needs to realize his labour and produce his own means of subsistence. He runs his farming, and the rural-domestic industry tied to it, independently. That independence is not cancelled if, as in India for instance, these small peasants form among themselves a more or less natural community of production; what is at issue here is only independence from the nominal landlord. In these conditions surplus labour can be wrung out of them for the nominal landowner only by extra-economic compulsion, whatever form that compulsion takes.

This is what sets these small peasants apart from slave or plantation economy: the slave works with conditions of production that are not his own, and does not work independently. So relations of personal dependence are needed — personal unfreedom, to whatever degree — and being chained to the land as its accessory: bondage in the true sense.

If it is not private landowners but, as in Asia, the state that faces them directly, as landowner and sovereign at once, then rent and tax are the same thing — or rather, there is then no tax apart from this form of ground-rent. In that case the dependence need be no harsher, politically or economically, than what every subject of that state shares. Here the state is the supreme landlord, and sovereignty is landed property gathered together on a national scale. But then, on the other hand, there is no private landed property either — although the land is possessed, and its use and fruits held by right, both privately and in common.

What determines the relation of domination and servitude is the specific economic form in which unpaid surplus labour is pumped out of the direct producers. That relation grows straight out of production itself and, in its turn, acts back on production as a determining force. On it rests the whole make-up of the economic community that grows out of the relations of production themselves, and with that the community's specific political shape.

In every case, the innermost secret — the hidden basis of the whole social edifice, and so also of the political form of sovereignty and dependence, in short of the particular form of state — is found in the direct relation between those who own the conditions of production and the direct producers. The form this relation takes at any time always naturally matches a definite stage in the development of the way labour is done, and so of labour's social productive power.

None of this prevents the same economic basis — the same as far as its main conditions go — from showing endless variations and gradations in how it appears, through countless different empirical circumstances, natural conditions, what Marx calls 'racial relations', historical influences from outside and so on. Those variations and gradations can be grasped only by analysing the empirically given circumstances.

Take labour rent, the simplest and earliest form of rent. Here rent is the original form of surplus-value, and the two are one and the same. And this identity of surplus-value with other people's unpaid labour needs no working out here, because it is still there in its visible, tangible form: the direct producer's work for himself is still separated in space and time from his work for the landowner, and that second work shows up directly, in the brute form of forced labour for a third party.

In the same way, the "property" the land has of yielding a rent comes down here to an open secret anyone can see. The nature that supplies the rent includes the human labour-power chained to the soil, and the property relation that forces its possessor to strain and use that labour-power beyond the measure that would be needed to satisfy his own indispensable needs. The rent consists directly in the landowner's appropriation of this extra expenditure of labour-power; beyond that, the direct producer pays him no rent at all.

Here, where not only are surplus-value and rent identical, but the surplus-value still palpably has the form of surplus labour, the natural conditions or limits of rent lie right on the surface — because they are the limits of surplus labour in general. The direct producer must (1) have enough labour-power, and (2) the natural conditions of his labour, in the first instance the soil he works, must be fruitful enough; in a word, the natural productivity of his labour must be great enough to leave him the possibility of surplus labour beyond the labour needed to satisfy his own indispensable needs. That possibility does not create the rent; only compulsion turns the possibility into a reality. But the possibility itself is tied to subjective and objective natural conditions. There is nothing at all mysterious in this either. If labour-power is meagre and the natural conditions of labour poor, surplus labour is small — but so too are the producers' needs, and the relative number of exploiters of that surplus labour, and finally the surplus product in which this surplus labour of small yield is realized for that smaller number of exploiting owners.

Finally, with labour rent it follows of itself that, assuming every other circumstance stays the same, it depends entirely on the relative scale of the surplus labour or forced labour how far the direct producer will be able to improve his own situation, to enrich himself, to produce a surplus over his indispensable means of subsistence — or, if we want to anticipate the capitalist way of putting it, whether and how far he can produce some kind of profit for himself, that is, a surplus over the wage he himself produces. Rent is here the normal, all-absorbing, so to speak legitimate form of surplus labour; and far from being an excess over profit — meaning here over any other surplus over wages — it is the case that, other circumstances being equal, not only the size of such a profit but its very existence depends on the size of the rent, that is, on the surplus labour that has to be performed for the owner under compulsion.

Some historians have said they are amazed that, since the direct producer is not an owner but only a possessor, and indeed by law all his surplus labour belongs to the landowner, an independent development of means and, relatively speaking, of wealth can go on among serfs or villeins at all. But it is clear that where this social relation of production, and the mode of production that goes with it, rest on naturally grown, undeveloped conditions, tradition must play an overwhelming part. It is also clear that here, as always, it is in the interest of the ruling part of society to sanctify what exists as law and to fix the limits that custom and tradition have set as legal limits. Quite apart from anything else, this comes about by itself once the constant reproduction of the basis of the existing state of things — the relation underlying it — takes on a regular and ordered form in the course of time. And this regularity and order is itself an indispensable moment of any mode of production that is to gain social solidity and independence from mere accident or caprice. It is exactly the shape in which that mode gains a firm social footing, and so the shape of its relative emancipation from mere caprice and mere accident. In stagnant conditions, both of the production process and of the social relations corresponding to it, it reaches this form through the mere repeated reproduction of itself. Once that has gone on for a time, it settles as custom and tradition, and is finally sanctified as explicit law. Now, since this form of surplus labour — statute-labour — rests on the undeveloped state of all the social productive powers of labour, on the crudeness of the mode of labour itself, it must naturally take a far smaller aliquot part of the direct producers' total labour than in developed modes of production, and in capitalist production in particular. Suppose, for example, that the statute-labour for the landowner was originally two days a week. Those two weekly days of statute-labour are thereby fixed, a constant quantity, regulated by customary or written law. But the productivity of the remaining days of the week, which the direct producer himself has at his disposal, is a variable quantity, and it must develop as his experience grows — just as the new needs he becomes acquainted with, the expansion of the market for his product, and the growing security with which he has that part of his labour-power at his disposal will spur him on to exert it more. And it should not be forgotten that the use of this labour-power is by no means confined to agriculture; it also includes rural domestic industry. So the possibility of a certain economic development is given here — dependent, of course, on favourable circumstances, on what Marx calls 'innate racial character' and the like.

Turning labour rent into rent in kind changes nothing in the essence of ground-rent — economically speaking. In the forms we look at here, this essence is that rent is the single dominant and normal form of surplus-value or of surplus labour. Which also says: rent is the only surplus labour or surplus product that the direct producer has to render to the owner of the land, the one condition of labour that at this stage covers everything else. And this producer is himself in possession of the conditions of labour that his own reproduction requires. On the other hand, it is the land alone that comes before him as someone else's property, as a condition of labour that has become independent of him and is personified in the landowner. Insofar as rent in kind is the dominant and most developed form of ground-rent, remnants of the earlier form — rent to be paid off directly in labour, statute-labour — still always go along with it to a greater or lesser degree, and this equally whether the landlord is a private person or the state. Rent in kind presupposes a higher cultural level on the producer's part, a higher stage of development of his labour and of society altogether. Rent in kind also differs from the preceding form in this way: the surplus labour no longer has to be done in its own natural form, and so no longer with the landlord or his agents directly supervising and compelling it. Instead the producer is driven by the force of circumstances rather than by direct compulsion, and by legal stipulation rather than by the whip, and has to perform it on his own responsibility. Surplus production — production beyond his indispensable needs — has here already become the self-evident rule, and it now takes place on a field of production that is in fact his, the land he himself works, instead of on the lord's estate beside and outside his own. In this relation the producer more or less controls the use of his whole labour-time, although as before one part of that labour-time, originally pretty much the whole surplus part of it, still belongs to the landowner for nothing; only the landowner no longer receives it straight off in its own natural form, but in the natural form of the product in which it is realized. The burdensome interruption caused by work for the landowner, cutting in more or less disruptively depending on how the statute-labour is regulated, falls away where rent in kind is pure, or is at least reduced to a few short intervals in the year where certain statute-labours continue alongside rent in kind. What the producer does for himself and what he does for the landowner are no longer tangibly split apart in time and place. Rent in kind in its purity, though in fragments it can drag on into more developed modes and relations of production, still presupposes a natural economy — that the economic conditions are produced wholly, or at least in the main, by the economic unit itself, and are directly replaced and reproduced out of its gross product. It further presupposes the union of rural domestic industry with agriculture; the surplus product that forms rent is the product of this combined agricultural and industrial family labour, whether the rent in kind contains more or less industrial products, as often happened in the Middle Ages, or is paid only in the shape of agricultural produce proper. In this form of rent, the rent in kind in which surplus labour is expressed need by no means exhaust the whole excess labour of the rural family. Rather, compared with labour rent, more room is given to the producer to win time for excess labour whose product belongs to him, just as the product of the labour that satisfies his most indispensable needs does. Greater differences in the economic condition of individual producers will likewise appear with this form. At least the possibility of this is there — and the possibility that such a producer has acquired the means to exploit other people's labour directly in his turn. But none of this concerns us here, where we are dealing with the pure form of rent in kind; just as we cannot go at all into the endlessly varied combinations in which the different forms of rent can join, falsify and tangle with one another. Through the form of rent in kind, tied to a particular kind of product and of production itself, through the union of agriculture and domestic industry that is indispensable to it, through the almost complete self-sufficiency the peasant family thereby obtains, through its independence from the market and from the movement of production and history of the part of society outside it — in short, through the character of natural economy in general — this form is quite suited to serve as the basis of stationary social conditions, as we see for example in Asia. Here, as in the earlier form of labour rent, ground-rent is the normal form of surplus-value and therefore of surplus labour: that is, of all the surplus labour that the direct producer has to hand over for nothing to the owner of his most essential condition of labour, the land. He hands it over for nothing, and so in fact under compulsion — though the compulsion no longer meets him in its old brutal form. Profit — if we give that name, wrongly anticipating, to the fraction of the excess of his labour over necessary labour that he appropriates for himself — determines rent in kind so little that it rather grows up behind rent's back and has its natural limit in the extent of rent in kind. The latter can reach an extent that seriously endangers the reproduction of the conditions of labour, of the means of production themselves, makes any expansion of production more or less impossible, and presses the direct producers down to the physical minimum of means of subsistence. This happens in particular where a conquering trading nation, as for example the British in India, finds this form and exploits it.

Here, money rent means something different from the ground-rent that rests on the capitalist mode of production — whether industrial or commercial ground-rent. That kind is only an excess over the average profit. Money rent, by contrast, is the ground-rent that comes out of a mere change of form: rent in kind turned into money, just as rent in kind was itself only labour rent in a changed form.

Now the direct producer no longer hands over the product itself. He has to pay his landowner its price — and that landowner may be the state or a private person. So a surplus product in its natural form is no longer enough; it has to be turned out of that natural form into the money form. Although he still goes on producing at least the greater part of what he lives on himself, a part of his product must now be turned into a commodity and produced as a commodity. So the character of the whole mode of production changes, more or less. It loses its independence, its being detached from any wider social connection. What becomes decisive is the make-up of the costs of production — which now include more or less spending in money; in any case, what becomes decisive is the excess of the part of the gross product that has to be turned into money over the part that must serve, on the one hand, again as means of reproduction and, on the other, as his immediate means of subsistence.

But the basis of this kind of rent stays the same as in rent in kind, which is where it starts — even though it is moving towards its dissolution. The direct producer is still the hereditary or otherwise traditional possessor of the land, and he has to render the landowner — who owns this, his most essential condition of production — surplus labour under compulsion: unpaid labour, given with no equivalent, in the form of surplus product turned into money. Property in the conditions of labour that are not the land itself — farm tools and other movables — is already turning into the direct producers' property in the earlier forms: first in fact, then in law as well. For the form of money rent this is presupposed still more. Turning rent in kind into money rent — at first here and there, then on a more or less national scale — presupposes trade, town industry, commodity production generally and hence money circulation already considerably developed. It further presupposes that the products have a market price and get sold more or less close to their value. Under the earlier forms that need by no means be the case at all. In eastern Europe we can still partly watch this change going on.

How little it can be carried through without a certain development of the social productive power of labour is shown by various attempts under the Roman Empire that failed, and by the fallings-back into rent in kind — which came after people had wanted at least to turn the part of this rent that existed as a state tax generally into money rent. The same difficulty of transition shows itself, for instance, before the Revolution in France, in the way money rent there was tangled up with, and falsified by, leftovers of its earlier forms.

Money rent is rent in kind turned into another form, and set against it, it is the last form and at the same time the form of dissolution of the kind of ground-rent we have been looking at so far — ground-rent as the normal form of surplus-value and of the unpaid surplus labour owed to the owner of the conditions of production. In its pure form this rent, like labour rent and rent in kind, is no excess over profit. It absorbs profit in concept. Where a profit does in fact arise beside it, as a particular part of the surplus labour, money rent — like rent in its earlier forms — is still the normal limit of that embryonic profit, and that profit can only develop in proportion to the possibility of exploiting surplus labour, whether one's own or other people's, that is left over once the surplus labour expressed in money rent has been rendered. If a profit really does arise beside this rent, then it is not profit that limits rent; it is the other way round — rent limits profit. But as already said, money rent is at the same time the form in which the ground-rent considered so far dissolves — the ground-rent that at first sight coincides with surplus-value and surplus labour, ground-rent as the normal and dominant form of surplus-value.

As money rent develops further, it must lead — leaving aside every intermediate form, the small peasant farmer's among them — to one of two ends: either the land turns into free peasant property, or rent takes the form that belongs to the capitalist mode of production, the rent a capitalist farmer pays.

With money rent, the old relation fixed by custom between the landowner and the dependant who possesses and works part of the land is necessarily turned into a contractual one — a purely money relation, set out in firm legal rules. In substance, the possessor who works the land becomes a mere tenant.

That change works in two directions. Where the general relations of production are otherwise suitable, it serves to expropriate the old peasant possessors bit by bit and put a capitalist farmer in their place. In the other direction, it lets the former possessor buy his way out of his rent obligation and become an independent peasant, owning outright the land he tills.

The transformation of rent in kind into money rent is not only necessarily accompanied by the formation of a class of propertyless day-labourers who hire themselves out for money — it is anticipated by it. While that class is still only sporadic, the better-off rent-paying peasants necessarily develop the habit of exploiting rural wage-labourers on their own account, just as in feudal times the wealthier serf peasants kept serfs of their own. So the possibility gradually grows among them of piling up a certain wealth and becoming capitalists themselves. And among the old self-working possessors of the land themselves there thus grows a seed-bed of capitalist farmers — its development conditioned by the general development of capitalist production outside the countryside, and shooting up especially fast when favourable circumstances help, as in sixteenth-century England, where the progressive devaluation of money enriched them at the landowners' expense, given the customary long leases.

Further: once rent becomes money rent, so that the relation between the rent-paying peasant and the landowner is contractual — a change possible at all only once the world market, trade and manufacture have reached a certain relative level — land is necessarily leased out to capitalists as well, who until then stood outside the bounds of the countryside. They bring capital earned in the towns, and with it the capitalist mode of operation already developed there — the product made as a mere commodity and a mere means of appropriating surplus-value — onto the land and into agriculture. This form can become the general rule only in countries that dominate the world market during the transition from feudal to capitalist production. Once the capitalist farmer steps in between the landowner and the actual working tiller, every relation that grew out of the old rural way of producing is torn apart. The farmer now really commands these agricultural workers and really exploits their surplus labour; the landowner's only direct relation is to this capitalist farmer, and it is a relation of money and contract, nothing more. So the nature of rent changes too — not just in fact and by accident, as it had already partly done under the earlier forms, but normally, in its acknowledged and ruling form. From the normal form of surplus-value and surplus labour it sinks to being the excess of that surplus labour over the part of it the exploiting capitalist takes for himself in the form of profit. The whole surplus labour — profit and the excess over profit — is now extracted directly by the farmer, taken in the form of the total surplus product, and turned into money. What he hands over to the landowner as rent is only a surplus part of this surplus-value — the surplus-value he extracts, by virtue of his capital, by directly exploiting the agricultural labourers. How much or how little he hands over is determined, on average and as a limit, by the average profit capital yields in the non-agricultural spheres of production, and by the non-agricultural prices of production that profit governs. So rent has now turned from the normal form of surplus-value and surplus labour into an excess over the part of the surplus labour that capital claims as belonging to it in advance and as normal — an excess peculiar to this one sphere of production, agriculture. Instead of rent, profit is now the normal form of surplus-value; and rent counts only as a form made independent under special circumstances — not of surplus-value in general, but of a particular offshoot of it, surplus profit. There is no need to go further into how this change matches a gradual change in the mode of production itself. It follows already from this: it is now the normal thing for this capitalist farmer to produce the agricultural product as a commodity; and while previously only the excess over his means of subsistence turned into commodities, now only a relatively vanishing part of these commodities turns directly into means of subsistence for him. It is no longer the land but capital that has now brought even agricultural labour directly under itself and its productivity.

Average profit, and the price of production it governs, form outside rural relations — in the orbit of urban trade and manufacture. The rent-paying peasant's profit does not go into that equalization, because his relation to the landowner is not a capitalist one. Insofar as he makes a profit — realizes an excess over his necessary means of subsistence, whether by his own labour or by exploiting the labour of others — it happens behind the back of the normal relation; and, other things being equal, the level of this profit is not what determines the rent — the rent determines it, as its limit.

The high rate of profit in the Middle Ages is owed not only to the low composition of capital, in which the variable element, laid out on wages, predominates. It is owed to the fleecing of the countryside, to the appropriation of part of the landowner's rent and of his dependants' income.

If the countryside exploited the town politically in the Middle Ages — wherever feudalism was not broken by an exceptional development of towns, as in Italy — the town exploits the countryside economically everywhere and without exception, through its monopoly prices, its tax system, its guilds, its direct commercial trickery and its usury.

One might imagine that the mere arrival of the capitalist farmer in agricultural production proves something: that the price of agricultural products, which had always paid a rent in one form or another, must — at least at the time he arrived — have stood above the production prices of manufacture, either because it had reached the level of a monopoly price or because it had risen to the value of those products, a value that really did stand above the price of production governed by the average profit. For otherwise, on this view, the farmer could not possibly, at the prices he found, first get the average profit out of them and then pay a further excess over that profit, out of the same price, as rent. One might go on to conclude that the general rate of profit that guides the farmer in his contract with the landowner was formed without counting rent in, and that, once it comes to govern rural production, it finds this excess already there and pays it over to the landowner.

This is the traditional way in which Mr Rodbertus, for example, explains the matter. But:

Firstly. Capital's entry into farming as an independent, leading power does not happen everywhere all at once; it happens gradually, and in particular branches. Nor does it start with farming proper. It starts with branches like stock-raising, and especially sheep-farming, whose main product, wool, at first brings, as industry rises, a market price that stays above its price of production — an excess that only evens out later. That was the case in England in the sixteenth century.

Secondly. Since this capitalist production only enters sporadically at first, there is nothing whatever to be said against the assumption that it first takes hold only of those blocks of land which, because of their specific fertility or their especially favourable location, can pay a differential rent as a whole.

Thirdly. Suppose even that the prices of agricultural products did stand above their price of production when this mode of production entered — a mode of production that in fact presupposes the growing weight of urban demand — as, for example, they undoubtedly did in England in the last third of the seventeenth century. Even then, once this mode of production has to some extent worked itself out of the mere subsumption of agriculture under capital, and once the improvement in agriculture and the lowering of production costs that are necessarily bound up with its development have set in, this will even itself out through a reaction, a fall in the price of agricultural products — as happened in England in the first half of the eighteenth century.

So on this traditional path, rent as an excess over the average profit cannot be explained. Whatever historically given circumstances it may first arise under: once it has struck root, rent can occur only under the modern conditions developed earlier.

Finally, one more note on the transformation of rent in kind into money rent. With money rent, capitalized rent — the price of land, and with it the fact that land can be sold and actually is sold — becomes an essential moment. And with it not only can the former rent-payer turn himself into an independent peasant proprietor, but urban and other holders of money also buy plots of land, lease them either to peasants or to capitalists, and enjoy the rent as a form of interest on the capital they have laid out that way. So this circumstance too helps to promote the transformation of the earlier mode of exploitation, of the relation between owner and actual tiller, and of rent itself.

Here we have reached the end of our series of stages in the development of ground-rent.

Every one of these forms of ground-rent — labour rent, rent in kind, money rent (as a mere changed form of rent in kind) — always presupposes that the one who pays the rent is the person who actually works and possesses the land, and whose unpaid surplus labour goes straight to the landowner. Even in the last of them, money rent, so far as it is pure — a mere changed form of rent in kind — this is not only possible but actually the case.

Share-cropping can be regarded as a transitional form between the original form of rent and capitalist rent. The tenant farmer provides, besides his labour (his own or other people's), part of the operating capital; the landowner provides, besides the land, another part of that capital (livestock, for instance); and the product is split between the share-cropper and the landowner in set proportions that vary from country to country. On the one hand, the tenant here lacks sufficient capital for full capitalist cultivation. On the other, the share the landowner draws does not have the pure form of rent. It may in fact include interest on the capital he has advanced, and a surplus rent as well. It may also in fact absorb the tenant's whole surplus labour, or leave him a larger or smaller part of that surplus labour. What is essential, though, is that rent here no longer appears as the normal form of surplus-value at all. On one side, the share-cropper — whether he puts in only his own labour or other people's too — is to have a claim to part of the product, not in his capacity as a worker but as possessor of part of the tools of labour, as his own capitalist. On the other side, the landowner claims his share not solely because he owns the land but also as a lender of capital.

A remnant of the old common property in land, which had survived after the transition to an independent peasant economy — in Poland and Romania, for example — served there as a pretext for bringing about the transition to the lower forms of ground-rent. Some of the land belongs to the individual peasants, who work it on their own. Another part is worked in common and yields a surplus product that goes partly to meet the community's expenses and partly into a reserve against bad harvests and the like. These last two parts of the surplus product, and finally the whole surplus product together with the land it grew on, are gradually usurped by state officials and private persons, and the originally free peasant proprietors — whose obligation to take part in the common tilling of that land is kept in place — are thereby turned into statute-labourers or payers of rent in kind, while those who usurped the common land make themselves the landed proprietors not only of that land but of the peasant holdings themselves.

We do not need to go any closer here into slave economy proper — which runs through a whole scale, from patriarchal slavery working mainly for home use to the plantation system working for the world market — or into estate economy, where the landowner farms for his own account, possesses all the instruments of production, and exploits the labour of hired men, whether unfree or free, paid in kind or in money. Here landowner and owner of the instruments of production coincide, and therefore so does the direct exploiter of the workers who count among these elements of production. Rent and profit coincide in the same way: there is no separation of the various forms of surplus-value. The workers' whole surplus labour, which shows up here as surplus product, is extracted from them directly by the owner of all the instruments of production — and the land counts among them, and in the original form of slavery the direct producers themselves do too. Where the capitalist conception prevails, as on the American plantations, this whole surplus-value is conceived as profit; where the capitalist mode of production itself does not exist, and the conception that goes with it has not been carried over from capitalist countries, it appears as rent. In any case, this form offers no difficulty. The landowner's income — whatever name one may give it — the available surplus product he appropriates, is here the normal and dominant form in which the whole unpaid surplus labour is directly appropriated, and landed property is the basis of that appropriation.

Small-scale peasant ownership. Here the peasant is at once the free owner of his land, and that land appears as his main instrument of production — the field of employment his labour and his capital cannot do without. In this form no lease-price is paid. So rent does not appear as a separate form of surplus-value — although in countries where the capitalist mode of production is otherwise developed, it does present itself as surplus profit, measured against other branches of production: as a surplus profit that falls to the peasant, as indeed the whole product of his labour does.

This form of landownership presupposes the same thing the older forms of it did: that the rural population has a great numerical preponderance over the urban one — and so that, even where the capitalist mode of production otherwise rules, it is only relatively little developed, and hence in the other branches of production too the concentration of capitals is confined within narrow limits, with the fragmentation of capital predominating. By the nature of the case, a predominant part of the rural product has to be consumed by its producers, the peasants, as their direct means of subsistence, and only the excess above that goes into trade with the towns as a commodity.

However the average market price of the farm product is governed here, differential rent — an excess part of the price of the commodities, for the better or better-located lands — must evidently exist here too, just as it does under the capitalist mode of production. Even if this form turns up in social conditions where no general market price has developed at all, this differential rent exists; it then appears in the excess surplus product. Only it flows into the pocket of the peasant, whose labour is realized under more favourable natural conditions.

And it is precisely in this form — where the price of land enters as an element in the peasant's factual production costs, because as the form develops further either the land is taken over at a certain money value when inheritances are divided, or, as the whole property or its pieces keep changing hands, the land is bought by the peasant himself, largely by raising money on mortgage — where therefore the price of land, which is nothing but capitalized rent, is an element assumed in advance, so that rent seems to exist independently of any differentiation in the fertility and location of the land: precisely here, taking the average, we are to assume that no absolute rent exists, and so the worst soil pays no rent. For absolute rent presupposes either an excess of the product's value over its price of production that is actually realized, or a monopoly price above the value of the product. But since farming here is largely arable farming for immediate subsistence, and the land is an indispensable field of employment for the labour and capital of the majority of the population, the product's governing market price will reach its value only under extraordinary circumstances; and this value will as a rule stand above the price of production, because the element of living labour predominates — though this excess of value over the price of production is in turn limited by the low composition of non-agricultural capital too, in countries where a smallholding economy prevails.

For the smallholding peasant, the average profit on capital does not appear as the limit on his exploitation, insofar as he is a small capitalist; nor does the need for a rent, insofar as he is a landowner. As an absolute barrier for him as a small capitalist there appears nothing but the wage he pays himself, after deducting the actual costs. As long as the price of the product covers this for him, he will cultivate his land — often down to a physical minimum of the wage. As for his position as a landowner, the property barrier drops away for him: it can only make itself felt against a capital (labour included) separated from it, by throwing an obstacle in the way of its being invested. True, the interest on the price of land is a barrier — and it usually has to be paid to a third person as well, to the mortgage creditor. But that interest can be paid out of exactly the part of the surplus labour that would be profit under capitalist conditions.

So the rent anticipated in the price of land and in the interest paid for it can be nothing but a part of the peasant's capitalized surplus labour, beyond the labour indispensable to his subsistence — without that surplus labour being realized in a portion of the commodity's value equal to the whole average profit, and still less in an excess over the surplus labour realized in the average profit, in a surplus profit. Rent can be a deduction taken from the average profit, or even the only piece of that profit which is realized.

So for the smallholding peasant to cultivate his land, or to buy land to cultivate, it is not necessary, as it is under the normal capitalist mode of production, for the market price of the farm product to rise high enough to yield him the average profit — and still less an excess over this average profit that is fixed in the form of rent. So the market price does not have to climb either to the value of his product or to its price of production. This is one of the causes why the price of corn in countries where small-scale ownership prevails is lower than in countries of the capitalist mode of production. A part of the surplus labour of the peasants who work under the least favourable conditions is given to society for nothing and does not enter at all into the governing of prices of production or into the formation of value. So this lower price comes from the producers' poverty, and in no way from how productive their labour is.

As the dominant, normal form, the free smallholding ownership of peasants who farm their own land is, on one side, the economic basis of society in the best times of classical antiquity; on the other, we meet it among modern peoples as one of the forms thrown up by the break-up of feudal landed property. So it is with the yeomanry in England, the peasant estate in Sweden, and the peasants of France and western Germany. The colonies are left aside here, because there the independent peasant develops under different conditions.

The free property of the peasant who works his own land is evidently the most normal form of landed property for small-scale cultivation. That is: for a way of producing in which possessing the land is a condition for the worker owning the product of his own labour, and in which the tiller — whether he is a free owner or a dependent holder — always has to produce his means of subsistence himself, independently, as an isolated worker with his family. Owning the land is as necessary for this mode of farming to develop fully as owning the instrument is for the free development of handicraft work. Here it is the basis for the growth of personal independence. For the development of agriculture itself it is a necessary point of passage. The causes it goes under show its limit. They are: rural domestic industry, which is its normal complement, destroyed by the growth of large-scale industry; the soil under this cultivation gradually impoverished and drained; the communal property usurped by large landowners — communal property forming everywhere the second complement of smallholding, and the only thing that makes it possible for the peasant to keep livestock; and competition from large-scale farming, whether it is run as plantations or capitalistically. Improvements in agriculture, which on one side bring falling prices for agricultural products and on the other demand bigger outlays and richer objective conditions of production, also play a part — as in England in the first half of the eighteenth century.

The agricultural smallholding, by its very nature, rules out: the development of the social productive powers of labour; social forms of labour; the social concentration of capitals; livestock-raising on a large scale; and the progressive application of science.

Usury and taxation must everywhere impoverish the smallholding. Capital laid out in the price of land is capital withdrawn from agriculture. The means of production endlessly split apart, and the producers themselves isolated. A tremendous waste of human power. The conditions of production getting steadily worse and the means of production getting dearer — a necessary law of small-scale landowning. Fertile seasons are a misfortune for this way of producing.

One of the particular ills of small farming, when it comes together with free ownership of the land, grows out of this: the person who works the soil lays out capital buying the land. The same holds for the transitional case, where the big estate owner lays out capital first to buy land and then again to farm it himself as his own farmer. Here land takes on the shifting character of a plain commodity, so changes of possession multiply, and with every new generation, with every division of an inheritance, it enters again for the peasant as an outlay of capital — that is, as land he has bought. Here the price of land forms a predominant element of the individual producer's false costs of production, or of the cost price of his product.

The price of land is nothing but capitalized rent, and therefore rent anticipated. Suppose agriculture is run capitalistically, so that the landowner simply receives the rent and the farmer pays nothing for the land besides that yearly rent. Then it is plain to see that the capital the landowner himself puts into buying the land is, for him, an interest-bearing investment, but has nothing at all to do with the capital put into agriculture itself. It is neither part of the fixed capital at work here nor part of the circulating capital. Rather, it gives the buyer only a title to receive the yearly rent — and it has absolutely nothing to do with producing that rent. The buyer pays that capital away, straight to the person selling the land, and the seller gives up his property in the land in exchange. So this capital no longer exists as the buyer's capital; he no longer has it; it is not part of any capital he can put into the land itself in any way. Whether he bought the land dear or cheap, or got it for nothing, changes nothing in the capital the farmer lays out in working the farm and nothing in the rent; it changes only this: whether the rent appears to him as interest or as no interest, or as high interest or low.

Take the slave economy as an example. The price paid here for the slave is nothing but the surplus-value or profit that is to be squeezed out of him, anticipated and capitalized. But the capital paid out to buy the slave is not part of the capital by which profit, surplus labour, is extracted from him. The opposite. It is capital the slaveowner has parted with, a deduction from the capital he has at his disposal in actual production. It has stopped existing for him, just as capital laid out to buy land has stopped existing for agriculture. The best proof is that it comes back into existence for the slaveowner or the landowner only once he sells the slave or the land again. But then the same relation sets in for the buyer. The fact that he has bought the slave does not yet, by that fact alone, enable him to exploit the slave. He is enabled to do that only by further capital, which he puts into the slave economy itself.

The same capital does not exist twice, once in the seller's hands and once in the buyer's. It goes out of the buyer's hands into the seller's, and there the matter ends. The buyer now has no capital; he has a piece of land in its place. The rent got from actually investing capital in this land is now reckoned by the new landowner as interest on capital that he did not put into the land but gave away in order to acquire it. That changes nothing whatsoever in the economic nature of land as a factor — any more than someone's paying £1,000 for 3 per cent Consols has anything whatever to do with the capital out of whose revenue the interest on the national debt is paid.

In fact, money spent to buy land — exactly like money spent to buy government bonds — is capital only in itself; just as any sum of value is capital in itself, potential capital, on the basis of the capitalist mode of production. What was paid for the land, as for government stock, as for any other commodity that is bought, is a sum of money. It is capital in itself because it can be turned into capital. Whether the money the seller receives really turns into capital depends on what use the seller makes of it. For the buyer, it can never again function as capital, any more than any other money he has definitively spent. In his reckoning it figures for him as interest-bearing capital, because he counts the income he gets as rent from the land, or as interest on the debt from the state, as interest on the money that buying the title to that income cost him. Only by reselling it can he realize it as capital. But then someone else, the new buyer, steps into the same relation the previous one was in, and no change of hands can turn money spent this way into real capital for the person who spent it.

With the peasant smallholding the illusion settles in even more firmly that the land itself has value, and therefore enters the price of production of the product as capital, just like a machine or a raw material. But we have seen that rent — and so capitalized rent, the price of land — can enter the price of the agricultural product as a determining factor in only two cases. Firstly, when the value of the agricultural product, because of the composition of agricultural capital — a capital that has nothing in common with the capital laid out to buy the land — stands above its price of production, and market conditions enable the landowner to make that difference count. Secondly, when a monopoly price prevails. And both of these are least the case with the smallholding and petty landownership, because it is precisely there that production to a very large extent meets the producers' own needs and goes on independently of regulation by the general rate of profit. Even where smallholding economy is pursued on leased land, the lease-price takes in a part of the profit, and even a deduction from wages, to a far greater extent than under any other conditions; it is then rent in name only, not rent as a category in its own right set against wages and profit.

So money capital spent on buying land is no investment of agricultural capital. To that extent it cuts down the capital the small peasants themselves can dispose of in their own sphere of production. To that extent it cuts down the scale of their means of production, and so narrows the economic basis of reproduction. It hands the small peasant over to usury, since in this sphere there is less proper credit to begin with. It holds agriculture back, even where this purchase happens on large estates. It does in fact contradict the capitalist mode of production, to which the landowner's indebtedness — whether he inherited his estate or bought it — is on the whole a matter of indifference. Whether he pockets the rent himself or has to pay it away again to mortgage creditors makes no difference in itself to the working of the leased estate.

We have seen that, once the ground-rent is given, the rate of interest governs the price of land. Low interest means a high price for land, and high interest a low price. So normally a high price of land and a low rate of interest ought to go together: a peasant who paid a lot for land because interest was low should, at that same low rate, get the operating capital he borrows on favourable terms. In reality things are different where smallholding predominates. First, the general laws of credit do not fit the peasant, since they assume the producer is a capitalist. Second, where smallholding predominates — colonies are not in question here — and the smallholding peasant is the backbone of the nation, capital formation, which means social reproduction, is relatively weak, and weaker still is the formation of money capital available for loan in the sense worked out earlier; that presupposes concentration and a class of rich idle capitalists (one writer on interest). Third, here, where landownership is a condition of life for the great majority of producers and an indispensable field for their capital, the price of land is driven up by demand for landed property outweighing supply — independently of the rate of interest and often in the inverse relation to it. And sold off in parcelled lots, land fetches a far higher price than when it is sold in large blocks, because small buyers are many and big buyers few (the French speculators who bought up estates to sell them in lots; two writers of the day). For all these reasons the price of land rises here even when the rate of interest is relatively high. The relatively low interest the peasant draws from the capital he lays out buying land (one French writer) is matched on the other side by the high usurious rate he himself has to pay his mortgage creditors. The Irish system shows the same thing, only in another form.

The price of land is something foreign to production as such. So here it can climb to a level at which it makes production impossible. (As one writer on agriculture put it.)

That the price of land plays such a role, that land is bought and sold, that it circulates as a commodity on this scale — in practice this follows from the development of the capitalist mode of production, insofar as the commodity here becomes the general form of every product and of every instrument of production. But this development takes place only where the capitalist mode of production is itself only limitedly developed and has not unfolded all its characteristics. For it rests precisely on agriculture being subjected no longer, or not yet, to the capitalist mode of production, but instead to a mode of production inherited from forms of society that have gone under.

So the disadvantages of the capitalist mode of production, with the producer's dependence on the money price of his product, come together here with the disadvantages that grow out of the incomplete development of the capitalist mode of production. The peasant becomes a merchant and an industrialist without the conditions under which he can produce his product as a commodity.

The price of land counts for the producer as part of his cost price, but it is a non-element of the product's price of production. And even when rent really does determine the price of the agricultural product, the capitalized rent — the money advanced for twenty years or more — never determines it.

That conflict is only one of the forms in which the contradiction of private property in land with a rational agriculture, with a normal social use of the land, shows itself at all. On the other side, though, private property in land — hence the expropriation of the direct producers from the land, the private ownership of some that includes the non-ownership of others in the land — is the basis of the capitalist mode of production.

Here, under small-scale agriculture, the price of land — the form and result of private property in land — appears as a barrier to production itself. And under large agriculture, with large landed property resting on capitalist operation, property appears as a barrier just the same, because it limits the farmer's productive investment of capital, which in the last instance benefits not him but the landowner.

In both forms, what takes the place of a conscious, rational treatment of the land — the land as the common, eternal property of the chain of human generations, the inalienable condition of their existence and reproduction — is the exploitation and squandering of the soil's powers. (Quite apart from the fact that exploitation is made to depend not on the level social development has reached, but on the accidental, unequal circumstances of the individual producers.) Small property does this for lack of the means and the science to apply the social productive power of labour. Large property does it by exploiting those means to enrich farmer and landowner as fast as possible. Both do it through dependence on the market price.

Every criticism of small-scale landownership resolves, in the last instance, into criticism of private property as a barrier and an obstacle to agriculture. And so does every counter-criticism of large landed property. Political side considerations are, of course, left out of account here in both cases.

This barrier and obstacle — everything that private property in land puts in the way of agricultural production and of the rational treatment, preservation and improvement of the land itself — develops on one side and the other only in different forms. And in the quarrel over these particular forms of the evil, its ultimate root is forgotten.

Small-scale landownership presupposes that by far the greater majority of the population is rural, and that isolated labour predominates, not social labour. And it presupposes that under such circumstances wealth and the development of reproduction — its material conditions and its intellectual ones alike — are ruled out, and with them the conditions of a rational agriculture. Large landed property, on the other side, reduces the agricultural population to an ever-falling minimum and sets against it an ever-growing industrial population crammed together in large towns. In doing so it produces conditions that bring about an irreparable rift in the interconnection of the social and naturally prescribed metabolism — prescribed, that is, by the natural laws of life. As a result, the soil's power is squandered, and trade carries that squandering far beyond the borders of the country's own land. (Liebig.)

If small-scale landownership creates what Marx calls a class of 'barbarians', standing half outside society — one that joins all the crudeness of primitive social forms to all the torments and all the misery of civilized countries — then large landed property undermines labour-power in the last region where its natural energy takes refuge, and where it is stored up as a reserve fund for renewing the vital power of nations: the countryside itself. Large industry and large agriculture, run on industrial lines, work together. Originally they are distinguished in this way: the first lays waste and ruins more the labour-power, and hence the natural power of man; the second more directly the natural power of the soil. Later, as things go on, the two join hands — the industrial system in the countryside also weakens the workers, and industry and trade for their part give agriculture the means of exhausting the soil.