Theories of Surplus Value Part I, Chapter 2 - Part 7

In examining the practical consequences of the Physiocratic system, Marx compares it with the way philosophy first arises within theology and religion, but then becomes its negation.

The Physiocrats venerated landed property, and they see only agricultural labour as productive, only agricultural production as creating surplus value. But, on this basis, any taxation must fall on landed property and rent.

“On the one hand, all taxes are put on rent, or in other words, landed property is in part confiscated, which is what the legislation of the French Revolution sought to carry through and which is the final conclusion of the fully developed Ricardian modern political economy.” (p 52)

A tax placed on any other form of property or revenue must ultimately fall on landed property, because, in the end, all real taxes can only be secured out of the surplus. However, because such taxes would only fall on landed property by a circuitous route, they would be inefficient.

“... and therefore in an economically harmful way, that hinders production — taxation and along with it all forms of State intervention, are removed from industry itself, and the latter is thus freed from all intervention by the State.” (p 52)

The consequent policy of laissez-faire, in relation to industry is ostensibly for the benefit of landed property, because it is intended to make taxation more efficient and less burdensome to landed property, and to facilitate the transformation of the products of agriculture by industry, and so to reduce their prices, again for the benefit of landed property, which must buy those products. But, in fact, what it does is to facilitate the growth of industry at the expense of agriculture, the growth of the town at the expense of the countryside.

“At the same time it is understandable how the feudal semblance of this system, in the same way as the aristocratic tone of the Enlightenment, was bound to win a number of feudal lords as enthusiastic supporters and propagandists of a system which, in its essence, proclaimed the rise of the bourgeois system of production on the ruins of the feudal.” (p 53)

I think this should be read as a literary flourish by Marx, rather than literally. Its quite clear that feudalism did not collapse in ruins, as a condition of capitalism rising up like a phoenix out of the ashes. Capitalism did not arise on the ruins of feudalism, but was able to develop within feudalism, and its further development. Feudalism is ruined as a result of reaching its own limits, and being superseded, therefore, by capitalism, which is able to go beyond those limits.

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