Thursday, 22 February 2024

Chapter II, The Metaphysics of Political Economy, 4. Property Or Rent - Part 3 of 8

As Lenin described, it was often the case that poorer peasants, who did not farm their own land, in Russia, but, instead, worked as wage-workers, had higher net incomes than those, even amongst the poorer middle-peasants, who did. The reason was as set out above. Those peasants who farmed their land, but could not do so as efficiently as their richer counterparts, could not make surplus profits, or even average profits, and yet still had to pay rents and redemption payments. After these payments, their net income was lower than that of a wage worker. This acted as a powerful recruiting force of workers into the towns, and continues to do so, today, in China, and more recently, in Africa.

In addition, even small capitalist farmers may not easily be able to move their capital elsewhere, as Marx sets out in Theories of Surplus Value. Indeed, they may be led to invest additional capital on their existing land, even if it produces a lower than average rate of profit, because this rate would still be higher than they could obtain from investing it elsewhere, or using it as interest-bearing capital. Such farmers may see rent bite into their normal profit, and they compensate for this by reducing the wages paid to their workers, below the value of their labour-power. In short, all sorts of land tenure and conditions continue to exist, side by side, so that the vestiges of feudal rent continued to exist. A scientific analysis provides the explanation for these specific forms, such as share-cropping.

Finally, as Marx points out, not all of what was included in rent was actually rent, as scientifically defined. Some of the payment actually represented interest on the fixed capital invested in the land, and leased to the farmer. Things like barns, silos and so on constitute fixed capital investment, and when the farmer leases the land, they get to use this fixed capital. When any capitalist leases fixed capital, such as a machine, what they pay for it comprises an amount for wear and tear, during the lease, plus interest on the capital-value, determined by the market rate of interest. The same applies to the farmer, but this interest is lumped in with the actual rent. As Marx sets out in Capital III, often farmers would invest in fixed capital themselves, to enhance their productivity, and the landlord would appropriate it at the end of the lease, setting the new rents at a higher level accordingly. It was one reason landlords pushed for shorter and shorter leases.

“It may happen, as in Ireland, that rent does not yet exist, although the letting of land has reached an extreme development there. Rent being the excess not only over wages, but also over industrial profit, it cannot exist where the landowner’s revenue is nothing but a mere levy on wages.

Thus, far from converting the exploiter of the land, the farmer, into a simple labourer, and “snatching from the cultivator the surplus of his product, which he cannot help regarding as his own,” rent confronts the landowner, not with the slave, the serf, the payer of tribute, the wage labourer, but with the industrial capitalist.

Once constituted as ground rent, ground property has in its possession only the surplus over production costs, which are determined not only by wages but also by industrial profit.” (p 146-7)

Capitalist rent, therefore, snatches a part of the former income of the landlord, because, previously, they appropriated all of the surplus labour/product. Now, it is the capitalist which does so, and hands to the landlord only that portion of it that represents surplus profit.

This is not something that happens overnight, as a single event, but is a process extending over a long period.

“In Germany, for example, this transformation began only in the last third of the 18th century. It is in England alone that this relation between the industrial capitalist and the landed proprietor has been fully developed.” (p 147)


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