Saturday, 25 June 2016

Capital III, Chapter 37 - Part 9

Between 1849 and 1859, farm wages rose because of special factors: Irish emigration reduced the flow from Ireland to England; the industrial boom absorbed more agricultural workers into the industrial proletariat; there was increased demand for soldiers during the Crimean War; and a larger than usual emigration to the US and Australia fuelled by the gold rushes.

During this period, grain prices also fell by an average of 16%. The capitalist farmers demanded a reduction in rent, but other than in a few instances, failed to get it. Marx refers to this situation in “Value, Price and Profit”, in his debate with Weston, to demonstrate that in the end, wages are determined by the demand and supply for labour-power. Faced with these rising wages, and falling prices, the capitalist farmers did what capital always does – it sought ways of reducing its demand for labour-power, and bringing about a relative increase in the supply.

It does this by technological improvement to raise productivity.

“They had recourse to a reduction of production costs, among other things by the mass production of steam-engines and new machinery, which to some extent replaced horses and pushed them out of the economy, but also brought about, in part, an artificial over-population by throwing agricultural day-labourers out of work, and thereby caused a new drop in wages. And this took place in spite of the overall relative decrease in agricultural population during that decade as compared with the growth of total population, and in spite of an absolute decrease in agricultural population in some purely agricultural districts.” (p 628)

Marx quotes Henry Fawcett, Professor of Political Economy at Cambridge.

"The labourers were beginning to emigrate, and the farmers were already beginning to complain that they would not be able to pay such high rents as they have been accustomed to pay, because labour was becoming dearer in consequence of emigration." (p 629)

High ground rent was then here directly linked with low wages, and because the price of land is determined by the level of rent, we have then here a direct connection, Marx says, “... a rise in the value of land is identical with a depreciation of labour, the high price of land is identical with the low price of labour.” (p 629)

It is a direct connection, which once again has been witnessed in the 1980's, with soaring land and property prices, alongside stagnant and falling wages.

Marx quotes from Du Mécanisime de la Société en France et en Angleterre, by M. Rubichon, 2nd ed., Paris, 1837, p. 101, who relates how rental prices in France had risen along with the prices of bread, wine, meat vegetables and fruit, whilst wages over the previous one hundred years had remained unchanged.

Marx also quotes John Lockart Morton, “The Resources of Estates”, 1858, who describes how there is necessarily more competition to obtain the smaller estates than the larger estates, which only the large capitalist farmers could afford. The consequence is that the smaller farmers, who had less alternatives for their own employment, and employment of their capital, paid larger rents than were paid on the larger estates. 

Morton illustrates ground rent ate into the subsistence of the small tenant and their labourers.

“This takes place in the case of leaseholds with less than 70 to 80 acres (30-34 ha.) where a two-horse plough cannot be maintained. 

"Unless the tenant works with his own hands as laboriously as any labourer, his farm will not keep him. If he entrusts the performance of his work to workmen while he continues merely to observe them, the chances are, that at no distant period, he will find he is unable to pay his rent" (1. c., p. 148). Morton concludes, therefore, that unless the tenants of a certain locality are very poor, the leaseholds should not be smaller than 70 acres, so that the tenants may keep two or three horses.” (p 629-30)

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