3) It is a peculiarity of ground-rent that its amount is determined completely separately from any action by the landed proprietor. Ground-rent and with it the price of land, rises as a result of the rise in social productivity. This development of social productivity causes a growth in the mass of profit, and thereby the mass of capital, which means an expansion of the market. This means an increased demand for the products of the soil, in which is included not just food, but raw materials, including oil and minerals.
This means the demand for land itself must rise. That includes a demand for land for non-agricultural or extractive purposes too.
“More exactly — if one considers only the actual agricultural rent — rent, and thereby the value of the land, develops with the market for the products of the soil, and thus with the increase in the non-agricultural population, with its need and demand for means of subsistence and raw materials.” (p 637)
Kautsky saw in this a basis for colonialism. (See: Kautsky and Colonialism).
Capitalism reduces the agricultural population, relative to the industrial population because although a rising technical composition of capital means a relatively smaller quantity of variable capital, this also must involve an absolute expansion of variable capital, because the mass of capital itself expands at a faster rate.
But, in agriculture, this same process must result in continually fewer workers, being employed on any given area of land. The absolute number of agricultural workers could then only increase if more and more land was brought into cultivation. However, Marx points out that although this sets agriculture, as a whole, apart from industrial production, as a whole, considered at the level of individual commodity production there is no difference between agricultural production and any other kind of commodity production.
“In fact, we are not dealing here with a characteristic peculiarity of agriculture and its products. On the contrary, the same applies to all other branches of production and products where the basis is commodity-production and its absolute form, capitalist production.” (p 537)
In other words, this is the point Marx makes in the Grundrisse, in discussing the “Civilising Mission of Capital”. The expansion of capital is not an expansion of capital in each type of commodity per se. If productivity in coal-mining rises, for example, more labour, absolutely, at any mine can only be employed if new coal seams are opened up. In a car factory, it would require that additional assembly lines or even factories are opened. But, there comes a point where the demand for coal or cars does not justify any such further expansion. To do so would be to lead to the kind of disproportion between supply and demand, Marx previously alluded to, creating a crisis of overproduction.
Consequently, the additional capital gets invested in some new or alternative line of production, so that the required proportion can be maintained, and in this way, the additional labour is employed.
“These products are commodities, or use-values, which have an exchange-value that is to be realised, to be converted into money, only in so far as other commodities form an equivalent for them, that is, other products confront them as commodities and values; thus, in so far as they are not produced as immediate means of subsistence for the producers themselves, but as commodities, as products which become use-values only by their transformation into exchange-values (money), by their alienation. The market for these commodities develops through the social division of labour; the division of productive labours mutually transforms their respective products into commodities, into equivalents for each other, making them mutually serve as markets. This is in no way peculiar to agricultural products.” (p 637)
This can most clearly be seen also in respect of the way that employment in manufacturing industry has fallen in a similar fashion to the fall in agriculture described by Marx. Yet, just as that fall in agricultural employment led to no crisis, so too with the fall in employment in manufacturing industry. Instead, just as capital and labour moved from agricultural production to manufacturing production, so it has moved from manufacturing to service industry. This is simply a confirmation of the laws that Marx set out here and in the Grundrisse, and indeed of The Law of Value, acting via the market to redistribute capital and labour to meet social needs and maintain the required proportions of their production.
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