Capital III, Chapter 47 - Part 16

The landlord extracted surplus value, in the form of rent, as a consequence of the form of property and social relations. This surplus value is not surplus exchange value, because exchange value only arises when value takes the form of a commodity; that is when the value is expressed in the value form, as a relation to a quantity of some other use value. As pure labour service, value exists in its original form, as a quantity of labour-time. As products as opposed to commodities, value again takes the form of labour-time. What the landlord appropriates in rent, as a surplus product is not a surplus exchange value, but only a surplus use value that embodies an amount of value. The landlord may simply consume this product, in exactly the same way the direct producer consumes the necessary product. It is because value assumes this form, rather than exchange value, that, as Marx says in Capital I, commodity fetishism does not arise.

Its only when products become commodities, as a result of trade, that value takes the form of exchange value, that it is expressed not as a quantity of labour-time, but as a quantity of some other use value. And, it is this change in the way value is expressed that brings about commodity fetishism.

The capitalist extracts surplus exchange value in the form of profits. The rent limited the extent of profits, but now the capitalist will only invest if they make profits, and if the rent reduces the profit beneath the average, the capital will move to alternative uses. So, now the profit sets the limit for rent.

“Thus, the nature of rent is also transformed, not merely in fact and by chance, as occurred in part even under earlier forms, but normally, in its recognised and prevailing form. From the normal form of surplus-value and surplus-labour, it descends to a mere excess of this surplus-labour over that portion of it appropriated by the exploiting capitalist in the form of profit; just as the total surplus-labour, profit and excess over profit, is extracted directly by him, collected in the form of the total surplus-product, and turned into cash. It is only the excess portion of this surplus-value which is extracted by him from the agricultural labourer by direct exploitation, by means of his capital, which he turns over to the landlord as rent.” (p 799-800)

How much can be paid as rent depends on the average profit, which is determined not in agriculture, but in the wider economy. It is this average profit, which regulates the prices of production of agricultural products, and thereby determines the extent of surplus profits available to be paid as rent.

“From a normal form of surplus-value and surplus-labour, rent has now become transformed into an excess over that portion of the surplus-labour claimed in advance by capital as its legitimate and normal share, and characteristic of this particular sphere of production, the agricultural sphere of production. Profit, instead of rent, has now become the normal form of surplus-value and rent still exists solely as a form, not of surplus-value in general, but of one of its offshoots, surplus-profit, which assumes an independent form under particular circumstances.” (p 800)

In other words, this transformation of rent goes along with a gradual transformation of the mode of production itself from feudalism to capitalism. On the one hand, a section of the richer peasants are transformed by this process into capitalist tenant farmers, whilst a section of the poorer peasants are transformed into day labourers. On the other, capitalists, who have made their money elsewhere, enter agriculture from the start as capitalist farmers, just as some merchant capitalists, from the start, entered manufacturing as industrial capitalists, whilst some independent producers and workers, like Wedgwood, were transformed into industrial capitalists.

Surplus value is now extracted from the agricultural worker by the capitalist, not the landlord. The landlord only now shares in that surplus value to the extent that the capitalist makes a surplus profit. But, alongside capitalist agriculture, remnants of the past continue. Peasant farmers continue to exist, just as in industry, self employed workers eke out an existence, either on their own, or by also employing a few others.

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