Capital III, Chapter 47 - Part 20

Where, in the US, for example, a capitalist mentality was transplanted from Europe, by the colonists, and where production is geared to commodities sold on the world market, the surplus value, in the form of surplus labour extracted from slaves is considered as profit. But, as described elsewhere slaves do not produce surplus value, in the capitalist sense of a surplus exchange value. They produce a surplus product, over and above what is required for their own reproduction – something which is also true for a peasant producer, a pack animal and a machine – but the value of their product is not greater than the value of their own labour-power, as is the case with free labour. Slaves are no different, objectively, than pack animals or machines, in the production process. They are like fixed constant capital, that only transfers its own value gradually, rather than creating new value.

The only reason that the surplus product of slaves assumes the form of a surplus value, is that the product is sold as commodities, into a market, where market prices are determined by the expenditure of free labour. It is only because the capitalist mentality sees all such surpluses as profit that it is considered to be such in these conditions. Objectively, it is not profit.

Where the capitalist mentality and the capitalist mode of production are both absent, any such surpluses are considered rent, because this is the form that all surplus value assumes in pre-capitalist formations.

“At any rate, this form presents no difficulties. The income of the landlord, whatever it may be called, the available surplus-product appropriated by him, is here the normal and prevailing form, whereby the entire unpaid surplus-labour is directly appropriated, and landed property forms the basis of such appropriation.” (p 804)

Another form is where the peasant producer owns their land, as a free citizen, such as the English Yeomanry, or the small farmers in the US. Here, there is no payment of lease money, nor any appropriation of surplus value by the landlord. The small peasant farmer continues to produce primarily for their own direct consumption, which is only possible in conditions where the agricultural population is overwhelmingly larger than the town population.

Capitalist production in the towns may then prevail over guild or artisanal and handicraft production, but it remains limited without any large-scale concentration and centralisation of capital. Under such conditions, differential rent exists because of differences in fertility between one piece of land and another, but this differential rent appears as a larger surplus product, available for direct consumption, or to be sold on the market.

“This differential rent exists, even where this form appears under social conditions, under which no general market-price has as yet been developed; it appears then in the excess surplus-product. Only then it flows into the pockets of the peasant whose labour is realised under more favourable natural conditions.” (p 805)

Under such conditions, its assumed no absolute rent exists, because commodity prices would not be high enough to permit it. The land itself here appears to the producer as a cost of production. The land must be bought as a commodity. It may be part of an inheritance, and its money value determined. In the case of colonists, the British Government set high prices on land as an attempt to prevent wage labourers, who had emigrated, turning themselves back into peasant producers.

Given that, in these conditions, the majority of production is for direct consumption, rather than to be sold, in the market, the condition of demand and supply will be such that market prices will rarely reach the value of the product, especially given the low organic composition of capital, in this production.

“For the peasant owning a parcel, the limit of exploitation is not set by the average profit of capital, in so far as he is a small capitalist; nor, on the other hand, by the necessity of rent, in so far as he is a landowner. The absolute limit for him as a small capitalist is no more than the wages he pays to himself, after deducting his actual costs. So long as the price of the product covers these wages, he will cultivate his land, and often at wages down to a physical minimum. As for his capacity as land proprietor, the barrier of ownership is eliminated for him, since it can make itself felt only vis-à-vis a capital (including labour) separated from land-ownership, by erecting an obstacle to the investment of capital.” (p 805-6)

If the land is bought, using borrowed money, on a mortgage, interest must be paid. But, so long as some surplus value is produced, this interest can be paid out of it. Unlike differential rent, therefore, all that is required to cover this interest is the existence of a sufficient amount of profit, not a surplus profit.

“It is not necessary, therefore, that the market-price rise, either up to the value or the price of production of his product.” (p 806)

Under such systems, ownership of the land, by the small producer, is as necessary as ownership of tools for handicraft production.

“Here is the basis for the development of personal independence. It is a necessary transitional stage for the development of agriculture itself.” (p 807)

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