When Marx examines the question of free trade, in general, it is from the perspective of capitalism as a system, and viewed from this perspective, Marx says, free trade is the logical conclusion, the requirement for its most rapid and rational development. Marx notes,
““The repeal of the Corn Laws in England is the greatest triumph of Free Trade in the nineteenth century.” “. . . By the repeal of the Corn Laws, free competition, the present social economy is carried to its extreme point.”” (p 259)
In this, Marx agreed with Sismondi. The difference was that Sismondi saw this development of capitalism as a bad thing, and so something he wanted to hamper, whereas Marx saw it as the most progressive development in human history, and so something whose development was to be encouraged. Speaking of Marx and Engels, Lenin says,
“Hence, the issue presents itself to these authors as a question of whether the further development of capitalism is desirable or should be retarded, whether “different paths” should be sought, and so forth. And we know that their affirmative answer to this question was indeed the solution of the general fundamental problem of the “destiny of capitalism” and not of the specific problem of the Corn Laws in England, for the point of view established here was also applied much later in relation to other countries. The authors held such views in the 1840s in relation to Germany, and in relation to America, and declared that free competition was progressive for that country; with respect to Germany one of them wrote, as late as the sixties, that she suffered not only from capitalism, but also from the insufficient development of capitalism.” (p 260)
And, the same is true in relation to the Brexit debate. The capitalist EU is not the goal that Marxists seek, any more than capitalism is the goal we seek, but like Marx, we understand that the path to the goal of Socialism runs through capitalism, and its development, through the stage of monopoly and multinational capitalism, the creation of a world market, imperialism and the bursting through the fetters imposed by the nation state.
Speaking of Marx, Lenin notes,
“For him it is not the abstract question of which system England should adopt, what path she should choose (as the question is put by Sismondi, who forgets that England has a past and a present, which already determine that path). No, he forthwith presents the question on the basis of the present-day social and economic system; he asks himself: what must be the next step in the development of this system following the repeal of the Corn Laws?” (p 260)
The effects on industry were apparent. It would cheapen raw materials, thereby creating a large release of constant capital, and also raising the rate of profit. It would cheapen food, and so enable a reduction in wages, so increasing surplus value, the rate of surplus value, and rate of profit. The manufacturers, to argue that the measure would benefit the nation, had to also show that it would benefit agriculture. They launched a competition for those who could demonstrate such advantages. It was won by Hope, Morse and Greg, and Marx chooses this latter as best reflecting scientifically the interests of the capitalist farmers, though Greg himself was a large manufacturer. He argued that it would,
“thrust the small farmers out of agriculture and they would turn to industry, but it would benefit the big farmers who would be able to rent land on longer leases, invest more capital in the land, employ more machines and get along with less labour, which was bound to become cheaper with the fall in the price of corn. The landlords, however, would have to be content with a lower rent because land of poorer quality would drop out of cultivation, as it would be unable to withstand the competition of cheap imported grain.” (p 260-1)
This analysis was proved right. As Marx set out in Value, Price and Profit, in fact, as some of the small farms closed down, even this reduction in demand for agricultural labour was not enough to prevent it being in short supply, as the larger farms expanded, because the agricultural labourers became industrial workers, construction workers and so on. It led to rising agricultural wages, but the farmers could not raise prices, and could only respond by further mechanisation to replace labour, which then reduced costs of production, and increased profits. In fact, as Marx and Engels describe, in Capital III, these developments meant that even the foreseen reduction in rents did not occur. Lenin quotes, Marx from Capital I.
“The repeal of the Corn Laws gave a marvellous impulse to English agriculture. . . . A positive decrease of the agricultural population went hand in hand with increase of the area under cultivation, with more intensive cultivation, unheard-of accumulation of the capital incorporated with the soil, and devoted to its working, an augmentation in the products of the soil without parallel in the history of English agriculture, plethoric rent-rolls of landlords, and growing wealth of the capitalist farmers. . . . Greater outlay of capital per acre, and, as a consequence, more rapid concentration of farms, were essential conditions of the new method.” (p 261)
In other words, the repeal not only gave an impetus for the development of industrial capital, but also of agricultural capital. And, Lenin, basing himself on Marx and Engels' analysis of differential rent, says that the reasons the rent did not fall, even as prices fell, is also explained. He quotes from Capital III.
““When the English corn duties were abolished in 1846 the English manufacturers believed that they had thereby turned the landowning aristocracy into paupers. Instead, they became richer than ever. How did this occur? Very simply. In the first place, the farmers were now compelled by contract to invest £12 per acre annually instead of £8. And, secondly, the landlords, being strongly represented in the Lower House too, granted themselves a large government subsidy for drainage projects and other permanent improvements of their land. Since no total displacement of the poorest soil took place, but rather, at worst, it became employed for other purposes—and mostly only temporarily—rents rose in proportion to the increased investment of capital, and the landed aristocracy consequently was better off than ever before” (Das Kapital, III, 2, 259).” (Note *, p 261)
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