“The high rate of profit in the Middle Ages is not entirely due to the low composition of capital, in which the variable component invested in wages predominates. It is due to swindling on the land, the appropriation of a portion of the landlord’s rent and of the income of his vassals. If the country-side exploits the town politically in the Middle Ages, wherever feudalism has not been broken down by exceptional urban development — as in Italy, the town, on the other hand, exploits the land economically everywhere and without exception, through its monopoly prices, its system of taxation, its guild organisation, its direct commercial fraudulence and its usury.” (p 800-801)
It might be thought that the appearance of capitalist farmers is proof that the price of agricultural products is higher than the price of manufactured products, reflecting the fact that either agricultural prices reflect a monopoly price due to the monopolisation of land ownership, or else that the value of agricultural products is higher than their price of production, determined by the average rate of profit.
“One might imagine that the mere appearance of the capitalist farmer in agricultural production would prove that the price of agricultural products, which from time immemorial have paid rent in one form or another, must be higher, at least at the time of this appearance, than the prices of production of manufacture whether it be because the price of such agricultural products has reached a monopoly price level, or has risen as high as the value of the agricultural products, and their value actually is above the price of production regulated by the average profit. For were this not so, the capitalist farmer could not at all realise, at the existing prices of agricultural produce, first the average profit out of the price of these products, and then pay out of the same price an excess above this profit in the form of rent. One might conclude from this that the general rate of profit, which guides the capitalist farmer in his contract with the landlord, has been formed without including rent, and, therefore, as soon as it assumes a regulating role in agricultural production, it finds this excess at hand and pays it to the landlord. It is in this traditional manner that, for instance, Herr Rodbertus explains the matter. [J. Rodbertus, Sociale Briefe an von Kirchmann, Dritter Brief: Widerlegung der Ricardo’schen Lehre von der Grundrente und Begründung einer neuen Rententheorie. See also K. Marx, Theorien über den Mehrwert. 2. Teil, 1957, pp. 3-106, 142-54. — Ed.]” (p 801)
Marx's more detailed critique of Rodbertus' argument on this point is set out in “Theories of Surplus Value, Part 2".
However, Marx makes the following remarks here. Firstly, capitalist production does not emerge fully formed overnight and everywhere. It emerges both gradually and sporadically, just as new worker owned co-operatives emerge gradually and sporadically as an alternative to capitalist production. Both go through periods of advance and decline; both types of production see success and failure at an individual, as well as at a more general level.
Capitalist production, as it emerges in agriculture, does so in specific areas, rather than across the industry as a whole.
“It encompasses at first, not agriculture proper, but such branches of production as cattle-breeding, especially sheep-raising, whose principal product, wool, offers at the early stages a constant excess of market-price over price of production during the rise of industry, and this does not level out until later. Thus in England during the 16th century.” (p 801)
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