If the organic composition of capital for the whole of the agricultural output is 60 c + 40 v, then with a 50% rate of surplus value, the value of this output is 60 + 40 + 20 = 120. If the average rate of profit, in industry, is 10%, a capital of 100 should have a price of production of 110. If the agricultural product sells at its value of 120, it sells at 10 above the price of production, providing the basis for the absolute rent of 10. On the basis described, the composition of the industrial capital is 80 c + 20 v. In other words, agriculture employs relatively more immediate labour, signifying a relatively lower degree of productivity. That doesn't mean that this is true in every case. Some types of agriculture may have a higher organic composition. Marx refers to stock-raising. Similarly, some types of industry might have a lower organic composition than the average in agriculture.
But, Marx says, these particular cases do not determine rents. It is agriculture proper, and in particular the production of the means of subsistence, such as wheat, which determines rent. Capitalist production means that it is vegetable production, and not animal production which forms the largest element of the means of subsistence. In terms of quantity of production, and land usage, that remains true. The consumption of meat has risen significantly, and continues to rise, as more parts of the world industrialise, and living standards rise. However, the animals themselves have to be fed, and fattening animals requires even greater vegetable production than were those vegetables and cereals etc. fed directly to humans. Increased meat consumption, therefore, also requires more rather than less vegetable production. Similarly, growth has meant that the demand for land for residential, commercial and industrial uses has risen significantly. However, in terms of quantity of land use, it remains very minor, compared to agricultural land use.
In Britain, only around 10% of the land area is utilised as urban land; only around 1% is used for residential property (in fact, that is only half the land taken up by golf courses). The higher price of development land, compared to agricultural land, derives from the differential rents obtained on it, compared to agricultural land, which in turn are derived from the high value of the revenues obtainable from commercial and industrial use of the land compared to those of agricultural production.
At certain times, such as those from the 1980's, the blowing up of financial asset price bubbles can also inflate such rents, and development land prices. The creation of such property bubbles is itself facilitated by the concentration of land ownership into a relatively few hands, and by restrictions placed on land use, e.g. the Green Belt, in the UK. In Britain, in the 19th century, a study found that 90% of the land in Britain was owned by just 5% of the population. It is difficult to get hold of comparative data today, despite the existence of more extensive tax and land registry records, and computer systems. However, even after more than a century in the growth of home ownership, it remains the case that 90% of land ownership is in the hands of only 10% of the population, and the large majority of that ownership is concentrated in the hands of just 0.28% of the population, rather like the concentration of the ownership of financial assets. A 2001 article, by Kevin Cahill, in The New Statesman, recorded that whilst the majority of the population are burdened by various property, taxes, rural landowners were receiving a subsidy of around £83 per acre, amounting to a total subsidy of around £5 billion per year. He writes,
“With rare exceptions, ownership dictates how land is used. Those who now "hold" the bulk of the acreage of the UK are extremely hard to identify, almost entirely because of the defects in the land registries. But they are for the most part the descendants - the so-called cousinhood - of the great landowners of 1873. Among them are the current Duke of Buccleuch, with his 240,000 acres, the Duke of Northumberland, with 131,000 acres, the Duke of Westminster, with 129,000 acres, and the Prince of Wales, with 141,000 acres.”
Comparing these huge landed estates running into tens of thousands of acres, the average farm size, by comparison is just 220 acres, which gives some idea of the concentration of land ownership, by the remnants of the old landed aristocracy. Cahill reports that in Scotland, in comparison to the average £23,000 of subsidy received by farmers, the top 50 landowners obtained subsidies averaging around £300,000 per year, and with one receiving a subsidy of £1.2 million in 2009. Cahill also notes that,
“Behind the scare stories is a very simple financial fact: an acre of rural land worth £5,000 becomes an acre of development land worth between £500,000 and £1m once planning permission is obtained.”
Its no wonder, that this landed oligarchy seeks to maintain this monopoly, and to keep land locked up in the Green Belt, and off the market so as to both be able to continue obtaining these state subsidies, and so as to drive up the price of the residential land that is placed on the market. The convergence of interest between this landed oligarchy, which benefits from these high land and property prices, and the financial oligarchy that benefits from high financial asset prices, is then pretty obvious. Similarly, today around £9 billion a year is paid in subsidies to landlords, as Housing Benefits, as a direct result of the high price of housing, and low wages, a combination that Marx, 150 years ago pointed out always goes hand in hand. Cahill says of this coalition of interest,
“Most land in the UK held monopolistically by large landowners or estates follows the rules of what the American social economist Mancur Olson called "hidden coalitions". How these work in the UK and their impact on the housing market is very simply explained.
First, no one knows just how much land is available for development or from whom it is available. The result is that UK homes are both the smallest in Europe and the most expensive, with the land or site costing a vast proportion of the value of the dwelling. From the perspective of the 31 million people, or half the UK population, who pay direct taxes, what we are doing is in effect paying an inefficient business - the 325,000 "farmer" holders, or 0.5 per cent of the population - to keep hold of building land, further falsifying an already rigged market. The finer figures are worse. Only two-thirds of UK farms are owned; the other one-third is rented, mostly from the owners of the other two-thirds. In effect, the agriculture subsidy goes to the 0.36 per cent of the population that owns 70 per cent of the country.
If the 65,000 "farms" of under two acres are subtracted as economically meaningless, what you have is 50 per cent of the population, the taxpayers, paying 0.28 per cent of the population to hold the bulk of the country's landed assets and to make those plentiful assets scarce. The result is that the cost of a building site is two or three times what it should be for 70 per cent of the population. This is Britain's great property swindle.”
No comments:
Post a Comment