As Marx sets out in Theories of Surplus Value, Chapter 21, as industrial production increased in the towns and cities, as capital expanded, the lack of a similar capitalist development in agriculture meant that agricultural output lagged behind. Exceptions were in relation to sheep farming, which expanded on an extensive rather than intensive basis, and cattle breeding. The consequence was that as supply lagged demand, agricultural prices rose. Existing peasant producers sought to expand output by increasingly destroying the longer-term fertility of the land.
“It is in the nature of capitalist production that it develops industry more rapidly than agriculture. This is not due to the nature of the land, but to the fact that, in order to be exploited really in accordance with its nature, land requires different social relations. Capitalist production turns towards the land only after its influence has exhausted it and after it has devastated its natural qualities.”
The labour-intensive nature of agricultural production meant that it produced large amounts of surplus value, in relation to the capital advanced. It had a higher than average rate of profit, meaning it produced surplus profit/rent. It is only on that basis that capital begins to invade agricultural production, and to put it on a rational, scientific basis, which, also, begins to undo some of the damage done by the earlier over farming and destruction of the soil.
“Here, therefore, we have the three classes of bourgeois society and the form of income peculiar to each: the landlord, drawing ground-rent; the capitalist, drawing profit; and the labourer, drawing wages. It has never occurred to any English economist to regard the farmer’s earnings as a kind of wages, as seems to Herr Dühring to be the case; even less could it be hazardous for such an economist to assert that the farmer’s profit is what it indisputably, obviously and tangibly is, namely, profit on capital. It is perfectly ridiculous to say that the question of what the farmer’s earnings actually are has never been raised in this definite form. In England there has been no need so much as to raise this question; both question and answer have long been present in the facts themselves, and since Adam Smith there has never been any doubt about them.” (p 286-7)
In Germany, the landowners did, often, still cultivate their own lands, employing managers to undertake the work on their behalf. But, as Marx had already set out in Capital, this does not change the fundamental position, once capital has invaded this agricultural production. The fact that, once capitalist production in industry grew to a size that the individual capitalist could not carry out the role of functioning capitalist, and had to employ professional managers paid a wage, had not changed the basic social relation that capital employed wage-labour, and produced surplus value, which assumed the form of profit. Similarly, if a landowner, also, produces on a capitalist basis, employing wage-labour, which produces surplus-value/profit, this profit is a different revenue from rent or interest, whether the landowner recognises it as such or not.
It is only the surplus profit that forms rent, which is one reason that, where no such surplus profit exists, landlords were led to operate it themselves accepting only profit.
“If the landowner also provides the capital and has the farm run for his own account, he pockets the profit on capital in addition to the ground-rent, which is self-evident and cannot be otherwise with the existing mode of production. If Herr Dühring asserts that up to now no one has found it necessary to conceive the rent (he should say revenue) resulting from owner-cultivation as divided into parts, this is simply untrue, and at best only proves his own ignorance once again.” (p 287)
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