Wednesday 12 July 2023

3. The Method of Political Economy - Part 6 of 7

Marx sets out why, in analysing any mode of production, and setting out scientifically to explain it, it is not possible to do that in a chronological sequence of the appearance of categories, or how they might appear in the mind. That was a criticism of Proudhon that Marx sets out in The Poverty of Philosophy.

Marx gives the example of rent. In a primitive commune, there is no rent, because the land is communally owned. Rent, as a category, however, emerges early on, because, as soon as land becomes private property, the owner of the land can extract tribute from others, in exchange for its use. But, as Marx sets out, in Capital III, these early forms of rent, as tribute – and the same applies to tithes etc. - have nothing in common with capitalist rent, other than both are a means of landowners appropriating surplus value/product.

Feudal rent is appropriated, as tribute, on the basis of a paternalistic system, in which the landowner is simply entitled, by their rank and status, in society, to demand it, just as the church was entitled to demand a tenth of the harvest as tithes. The limit on the tribute is determined solely on the basis of appropriating the surplus product of the peasant, i.e. the product of their labour, over and above the necessary labour required for their own reproduction. That was true whether it took the form of Labour Rent, Rent in Kind, or Money Rent.

It was, then, rent that was a dominant feature, and coloured all other economic conditions and relations. The more taken in rent, the less the individual producer had as surplus product, so as to improve their condition, accumulate means of production and so on. But, this condition is completely reversed under capitalism, because, now, it is capital and profit that is determinant of these relations. Capitalist rent is merely surplus profit, i.e. profit in excess of average industrial profit. Rent is then dependent upon profit, not vice versa. As the average industrial rate of profit rises, so that surplus product in primary production falls, so rent is reduced.

So, for political economy, which is a science of bourgeois production, it is impossible to begin with the category of rent, despite its appearance, before profit, because, without understanding capital, profit and average profit, its impossible to understand capitalist rent.

“Rent cannot be understood without capital, but capital can be understood without rent. Capital is the economic power that dominates everything in bourgeois society. It must form both the point of departure and the conclusion and it has to be expounded before landed property. After analysing capital and landed property separately, their interconnection must be examined.” (p 213)

Another phenomenon of a category that has played different roles in history is the joint stock company. They were a recent feature of bourgeois society, and only really took off from the 1860's, following the passage of the 1855 Limited Liability Act. As Marx sets out, in Capital III, Chapter 27, along with cooperatives, they constitute socialised capital, as the transitional form of property between capitalism and socialism, because they are the collective capital of the associated producers within them. But, joint stock companies also appeared much earlier in history, “in the form of large privileged commercial companies with rights of monopoly.” (p 213-4)


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