The scientific analysis of rent explains the social relation that develops between labour and capital, and landed property, and the specific forms of property, and their historical development.
“So long as there was only M. Proudhon’s colonus, there was no rent. The moment rent exists, the colonus is no longer the farmer, but the worker, the farmer’s colonus. The abasement of the labourer, reduced to the role of a simple worker, day labourer, wage-earner, working for the industrial capitalist; the invention of the industrial capitalist, exploiting the land like any other factory; the transformation of the landed proprietor from a petty sovereign into a vulgar usurer; these are the different relations expressed by rent.” (p 147)
As Marx also describes, in Capital III, as soon as the capitalist farmer arises, the social function of the landlord disappears. They obtain rent, not for any role in production or society, but only as a monopoly owner of land, just as the usurer obtains interest. That is why bourgeois ideologists argued that, if land were nationalised, the rent would simply go to the state, and would, then, defray its costs, reducing taxes, and so facilitating greater capital accumulation. As Marx and Engels set out, later, in Capital III, and in Anti-Duhring, the same is true in relation to the private capitalist, as soon as socialised capital arises as the dominant form of property. The private capitalist loses any social function, and becomes merely a parasitic money-lender (shareholder/bondholder), living off interest and speculative capital gains.
“Rent, in the Ricardian sense, is patriarchal agriculture transformed into commercial industry, industrial capital applied to land, the town bourgeoisie transplanted into the country. Rent, instead of binding man to nature, has merely bound the exploitation of the land to competition.” (p 147)
This is also another reason that the claims that capitalist production began in agriculture are illogical, and anti-Marxian. Capitalist agriculture not only depends on an already existing large market for agricultural commodities, in the towns, but goes along with capitalist rent, and as Marx shows, capitalist rent (surplus profit), requires, first, the development of an average industrial rate of profit! Now, the rents that landlords could charge depended on the surplus profit, which depended on the level of primary product prices.
Ricardo did not accept the idea of Absolute Rent, but Marx demonstrated that landlords could charge an Absolute Rent, because the average organic composition of capital, in primary production, is lower than that in industrial production – itself, in part, a reflection of the fact that capitalist production begins in industry, not agriculture. That meant the annual rate of profit in the former was higher than in the latter, resulting in overall surplus profits, even for the least fertile land, in primary production, and so the ability to charge an absolute rent equal to it. The lower organic composition of capital was a result of a lower average level of technological development in agriculture – though, as Marx demonstrates, not in all types of agriculture, such as cattle breeding, where capital had been applied earlier – and use of fixed capital, meaning it was more labour intensive. It was one reason landlords had an incentive to deter such technological development, because higher surplus profits meant higher rents. Of course, if cheaper imports threatened that, it would undermine those rents, which is why the landlords demanded import controls to prevent it.
“Once established as rent, landed property itself is the result of competition, since from that time onwards it depends on the market value of agricultural produce. As rent, landed property is mobilized and becomes an article of commerce.” (p 147)
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