Monday, 4 July 2016

Capital III, Chapter 39 - Part 3

The bringing in of additional land for cultivation, does not depend on rising prices, and consequently rising rates of profit, any more than does the accumulation of capital, and expansion of output in any other sphere. Capitalist farmers seek to expand for the same reason as do capitalist manufacturers. Even if the rate of profit remains constant, production on a larger scale means the production of a greater mass of profit, and so potential for additional accumulation. That can apply whether market prices, and rates of profit, are rising or falling.

Moreover, what the productive-capitalist is concerned with is not the rate of profit itself, but the rate of profit of enterprise, because it is the profit of enterprise that is the revenue from which capital accumulation is funded. But, profit of enterprise is affected by whether the rate of rent, and the rate of interest is rising or falling, not just by what is happening to the rate of profit. The mass of rent will rise as the quantity of rent producing land in cultivation expands, but the proportion by which it expands will depend upon the relative proportion in which the expansion of cultivation involves the highest rent producing land or the lowest.

Considering the basis of higher returns from some land compared to others.

“The two general causes of these unequal results — quite independent of capital — are: 1) Fertility. (With reference to this first point, it will be necessary to discuss what is meant by natural fertility of land and what factors are involved.) 2) The location of the land. This is a decisive factor in the case of colonies and in general determines the sequence in which plots of land can be cultivated.” (p 650)

These two causes may work to reinforce each other, or act in opposite directions. For example, a piece of land may be very fertile, but remote from centres of production and markets, or vice versa. This is why it is just as possible that it may be that the worst land that is brought into cultivation first, and the better land brought into cultivation later, rather than vice versa.

As social production develops, this evens out differences arising from location, because local markets develop, and the improvement in transport and communications enables produce to be brought from further afield. But, this same process causes the division between town and country to be intensified, as production is concentrated in large towns, whilst agricultural areas become more isolated.

Looking just at fertility, this has a number of bases, and each responds differently, as development occurs. Setting aside the effect of the climate in different areas, the fertility depends on the chemical composition of the top-soil, and its ability to absorb nourishment, be it from natural or artificial fertilisers.

“Hence, it will depend partly upon chemical and partly upon mechanical developments in agriculture to what extent the same natural fertility may be made available on plots of land of similar natural fertility. Fertility, although an objective property of the soil, always implies an economic relation, a relation to the existing chemical and mechanical level of development in agriculture, and, therefore, changes with this level of development.” (p 651)

So, for example, this will depend on the development of different types of chemical treatment, for different types of soil, as well as the development of ploughs, able to more easily turn over heavy soil and thereby expose the sub-soil. Similarly, the only thing which may have caused one soil or piece of land to be less fertile than another, may have been inadequate drainage, as development proceeds, not only does the cost of introducing such measures fall, but, as more land is brought into cultivation, this cost may be spread over a larger area, so that the average cost is reduced.

The consequence again may be that the less fertile soils are cultivated first where they do not require such drainage work to be undertaken, and that it is only later, when cultivation is undertaken on a much larger scale, and where this investment in drainage becomes worthwhile, that more fertile soils are brought into use.

Different agricultural methods may also have these kinds of effects. For example, where more animals begin to be kept, this may result in a greater quantity of manure being applied to the land, raising its fertility. The planting of different types of crops may act to fix nitrogen in the soil, and as stated above, the use of different types of plough may expose deeper layers of sub-soil etc. whose composition may be different.

“All these influences upon the differential fertility of various plots of land are such that from the standpoint of economic fertility, the level of labour productivity, in this case the capacity of agriculture to make the natural soil fertility immediately exploitable — a capacity which differs in various periods of development — is as much a factor in so-called natural soil fertility as its chemical composition and other natural properties.” (p 651-2)

At any given level of development, therefore, there will be a variety of soil types in cultivation, and the different productivity arising from them will produce surplus profit and ground-rent. This will be the case whether to arrive at this position the process has involved a movement from the more fertile to the less fertile soils or vice versa.

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