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DOI: 10.1177/0308275X75001004031975 2: 72Critique of Anthropology
Antony CutlerThe Concept of Cround-Rent and Capitalism in Agriculture
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THE CONCEPT OF CROUND-RENTAND CAPITALISM INAGRICULTURE
byAntony Cutler
In the advanced capitalist countries the period of capitalist
industrialisation has been,whatever the specific variants that
this process has taken, one where the position of landovmers as
a specific social class has consistently declined. On the other
hand, in those nation-states subject to the domination of the
advanced capitalist countries landowners flourish, land ownership
is highly concentrated, rack-renting is the order of the day.
Can the concept of gound-rent as it is elaborated in Capital
elaborate the basis for the explanation of this contrast? To
answer thic question it is necessary to approach the andmalies
and ambiguities which haunt 1!,,-trxs own analysis.
The ConceDt of Ground-Rent in CaDitall
The concept of ground-rent is used in relation to two modes
of production in Capital, thc feudal and the capitalist. In
relation to the feudal mode of production ~round-rnt is a relation
of production, i.e., it defines the mode in which the surplus-
product is extracted by the ruling clans and more generally sets
limits to the character of the labour process under the feudal
mode. In contrast, in the capitalist mode pf production the mode
of extraction of surplus-product is surplus-value and rent is a
form of surplus-value.
In the feudal mode of production ground-rent is a relation
between the hicrarchised ruling class, the feudal nobility and the
peasantry whereby the latter owe a portion of their surplus-product
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to the former. This relation is crucially characterised by
an absence of any separation between the direct producers and the
means of production. This is the case whatever form of rent is
in operation for in the cases of rent in kind or in money the
peasant remains the controller and supervisor of production, while
in the case of labour rent the peasant uses his own means of
production on the lords land. An important correlate of this
relation is that rent under feudalism cannot by definition bo
governed by any general mechanism of determination, there is no
reason, for example, why the levels of rent in terms of surplus-
product need be comparable in different areas. Furthermore, rent
cannot be referred to any direct economic mechanism since while
the reproduction of the peasantry would put an abstract limit on
the levels of surplus-product extracted in the form of rent no
economic mechanism could define the precise extent of rent.
The conception of rent in the case of the capitalist mode of
production is necessarily quite distinct. l1arx discusoes two forms
of rent under the capitalist mode of production; form I, the only
form of rent
recognised byclassical
economics,he follows the
classical writers in calling differential rent, the second form
which is specific to Marxs own argument he calls absolute ground-
rent. Differential rent arises in any situation where there is
an unequal product from two equal applications of capital where
the organic composition io constant. Hero Marx explicitly echoes
Ricardos formulation: Ricardo is right in the following observation:
Rent is always the difference between the produce obtained by the
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employment of two equal quantities of capital and labour ..... (I~
Differential rent then io not limited to any particular sphere
of operationbeing applicable
for
exampleto raw
materials,sources
of energy and urban locations as well ag to agriculture. Equally,
differential rent can take a plurality of distinct forms; it can
go directly to a landlord, here the whole of the surplus-profit
derived from conditions which allow for above average* productivity
accrues to the landlord end the tenant is left with the average
profit determined by capitalict competition; it can be directly
appropriated by the owner of land insofar as the owner undertakes
capitalist production, in this case the rent only appears as
separate from profit in the formation of the purchase price of the
land (2); finally the state can appropriate differential rent
through exertinga
monopolyoi
landoi-nier~;hip (3).Under
competitiveconditions only state or private lando~l!1ership have the effect of
eqtialising profit rates and it is the case of private landovrnership
which is assumed in Capital. What is thus clear concerning
differential rent is that it is diametrically opposed to feudal
ground-rent. Differential rent does imply a relation to an average
rate of profit which will allow a consistent rate of rent in
agriculture governed by the differential fertility of the soil and
equally that this differential fertility will fom the basis for
the capitalisation of rent as a form of revenue. In this :ense,
differential ground-rent and the price of land do not fundamentally
differ from the
holdingof
equities (4).Differential rent is for
this reason not a relation of production but depends upon the
formation of capitalist relations of production.
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The Classical economists had limited the concept of rent to
differential rent but Marx introduces the concept of absolute
ground-rent. Absolute ground rent is seen to derive from two
heterogeneous sources, private land ol!1ers!p establishes a
monopoly which enables an additional rent to be charged over and
above differential rent which represents a monopoly price for
agricultural commodities. The monopoly price, however, iR not subject
simply to an extra-economic determination since it is equally
based on the conditions of production in agriculture. Here Marx
argues that the organic composition of capital is lower in
agriculture than in the average of the other capitalist sectors
of production. This means that the value of agricultural commodities
exceeds their price of production. Under conditions of capitalist
competition the above average profit generated in agriculture bythis low organic composition should be wiped out but as there is a
monopoly in l:u1o !1ership the lanc~ov:~ner if able to retain this
surplus-profit. The difference. between the value of agricultural
commodities and their price of production is thus absolute ground-
rent.
In this analysis Marx seeks to outline a theory of monopoly
pricing in the sphere of,a~riculture. However, the precise mode
of application of this concept must be regarded as fallacious. The
central problem in LSarxs argument concerns the determination of the
limits of the monopoly price, i.e. why it should be set at the
value of agricultural commodities. By being a monopoly in the sense
in which Marx implies the term agriculture is not subject to constraints
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of economic competition. For this reason it is difficult to see
why for example, agricultural commodities cannot be sold above
their value. 14arx argues that the limit to absolute ground-rent
must be found in the constraint exerted by foreign co.^~petition:
But it may be asked: If landed property gives the poi:er to nell
the product above its cost price, at its value, why does it not
equally well xive the power to sell the product above its value,
at an ::~bitrary monopoly price? On a small island, ,....hr~re there
is no foreign trade in corn, the corn, food like every other
product,could unquestionably be sold at a monopoly price, that is,
at a price only limited by the state of demand, i.e., of demand,
bac!~re~ by ability to pr,v, and according to the price level of the
product supplied the magnitude and extent of this effective demand
can very creatly.1 (5). The recourse to foreii7n competition, .
hoi:ever, solves nothing; if there is to be free import of foreign
agricultural commodities the result of competition will always be
to set tht, market price of agricultural commodities at their value.
Paradoxically the only way in which this argument could follow would
be if import of foreiy agricultural commodities were limited to
set the market price at the value of agricultural commodities in the
home country. This, however, would push the determinant from the
economic to the exercise bf state-power. (6)
Croz.^.::-^e-a ar.~1 the Ca-~ital is To~_e of Production..
The crucial distinction between nround-rent under the f eudal
and capitalist modes of producticn is, therefore, that ground-rent
is displaced from a relation of production to a form of surplus-
value. The implications of this are that as ground-rent is a
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revenue it is necessarily subject to the regulation of state power.
This situation, however, must be qualified with reference to the
conditions of agricultural production prevailing within the advanced
capitalist countries.
The formation of a world market for agricultural commodities
is a progressive effect of the penetration of capitalism in
agriculture. National markets are protected by an element of
differential rent applying on a worldscale,
the location of land.
Transport costs, therefore, clearly enter into the retarding effects
on the formation of a world market. However, the development of
a world market has the effect of increasing competition and lowering
the price of agricultural commodities. This means that he retention
of a monopoly price for agricultural commodities can only be effected
by artificially maintaining a price above the world market price
foragricultural commodities. Clearly, this does have various
deleterious effects on the development of the capitalist mode of
production in nation states.cadoPtin~ policies favouring landowners.
The major effect will be that if agricultural commodities are sold
at a price in excess of the competitive price the effect will be a
rise in wages. As labourpower is reproduced with referenco to a
set of commodities of which certain agricultural commodities are a
key component (7) any increased price must be treated as a deduction
from profits. Equally, the protection of the agricultural sphere
involves the retention of a higher proportion of the work-force
in agriculture which equally has the effect of tending to raise wages.
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It is clear, of course, that advanced capitalist countries have
protected home agricultural production but this has not been accomp-
anied by the protection of landowners. It has derived from attempts
by the ruling class to cement anti-proletarian class alliances. (8).
The dominance of industrial and latterly finance capital have
thus made it impossible to retain the position of lando~~er3hip
which characterised earlier phases of capitalist development.
The L.oour-Froc^s^ in Capitalist A~-riculture
A key aspect of the argument advanced by ~~arx on the question
of absolute ground-rent concerns the consistent technical backward-
ness w!1ch characterizes agricultural production,. However, if any
meaningful ccntrast between the conditions of agriculture in the
advanced capitalist countries and there dominated by imperialism
is to be effected it i3 necessary to demonstrate the mode in which
the development of capitalism in agriculture has led to certain
crucial transformations in the labour process.
The ccncepts analysing the labour process are developed by
Varx in Part IV of Volume I of Capital. Here Marx counterposes
in the sphere of industrial production the artisan labour process
to that of capitalist industry. The labour processes differ crucially
in that in the artisan labour process the constant position of the
artisan results in the fact that transformations in the means of
production are limited to those which reproduce the position of
the artisan. For example, improvements in tools are compatible
with the artisan labour process, the displacement of artisan labour
by machinery combined with unskilled labour is not (9). The break
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with the artisan labour process has two crucial effects, the possibility
is established of continuous entry of the fruits of scientific and
technical research into production and equally the mechanisation of
the labour process enables the labour to become continuous.
This transformation is led by the induRtrial rphere since
agriculture presents much greater intrinsic problems for the develop-
ment of a capitalist labour process. The major problem is that
certain key aspects of agricultural production remain given. For
example, the character of the soil and weather conditions are
obvious inescapable constraints. However, capitalist production in
agriculture continuously tends to minimise this givenness, the
giveneBB of the soil and weather being attacked by fertilizers, crop
sprays and irrigation, tendencies towards the establishment of a
continuous process being represented by the development of factory
farming.
From this point of view the artisan labour process remains totally
dominant inthe Third World countries with the effect that agricultural
yields remain far behind those prevalent in the advanced capitalist
countries, the major contribution to greater yields being preciselyby those elements which transform the giveneso of the soil, irrigation
and chcnical fertilizers. (10)
The Peasantry within a Capitalist Mode of Production.
If artisan production remains dominant within the agricultural
sector of Third 3.!orld cou.!1tries they are equally characterized byan absence of complete separation between the direct producers
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and the means of production, in a broad sense the peasantry remains
a crucial social class. The absence of this separation has the
effect of limiting thesource
of labouron
the peasant farms to
members of the family. Certain key effects follow from this
situation.
As the family is the source of labour, production is based not
on the reproduction of labour-povser but on the reproduction of the
labour of the unit of production.This,
in
particular,has a
crucial effect on the level of ground-rent. In the case of capitalist
agriculture wage-labour has to be remunerated at the current rate of
reproduction of labour-potier, therefore if it is employed for any
period beyond the normal working day the expenditure of capital
must necessarily augment itself incrementally. Peasant production,
on the other hand, because it utilises family labour and because
its object is the reproduction of the labour of this unit makes
no separation between necessary and surplus-labour. For this reason
it is generally the case that the effective rate of remuneration
of peasant labour is substantially beloa that of labour-power
under comparable conditions. The family labour basis, therefore,
is technically regressive since if the rate of remuneration is
based on the fact that family labour costs nothing then the
peasant producer must necessarily fall behind the capitalist farmer
for whom rises in the rate of remuneration of labour-power constitute
an incentive to displace labour-power with means of production.
However, it is important to stress that peasant farming does
not constitute a mode of production nor that it is intrinsically
inimical to capitalism. In this respect, for example, authors
following Chavanovs theory of pe:>..Ga.nt economv ~_1) have tended to
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see peasant farming as characterised by a cyclical differentiation
rather than the differentiation between capitalist farmer and
proletarian. (12) This is because following Chayanovs argument,
the subsistence level and the amount of land cultivated is seen to
depend on the ratio of working adults and children to dependent
adults and children within the family. The position of a peasant
unit of production would thus-depend upon a demographic cycle which
would peak at the maximum ratio of dependents to non-dependents.
However, in itself this arguments cannot be sufficient for an analysis
of the peascntry. Chayanov correctly argues that the means of
calculation are distinct in the case of the peasant unit so that
for example, given that the labour of workers on the unit is the
primary free resource, crops will be selected on the basis pf
labour-intensity and particularly from the point of view of spreading
labour over the whole year. (13) ChaSanovs object, however, is
the analysis of the labour process in peasant agriculture. The
retention of non-capitalist calculation precisely depends upon whether
the object of reproduction of subsistence can be achieved without
reference i,o the domination of the capitalist sector. The increasing
entrance into the capitalist market has the effect that the peasants
beoome dependent not on peasant calculation and the conditions of
production on the peasant unit but rather on the relative prices
of subsistence to cash crops. If it is impossible for the peasants
to meet their own subsidence by labour devoted to tho production
of subsistence crops then cultivation of cash crops is the necessary
alternative, the higher the relative price of the subsistence crop
the greater proportion of peasant labour has to be expended on the
cash crop. In this context the demographic cycle can work to
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facilitato internal means of differentiation within tho peasantry
since the development of capitalist competition with the peasant units
will tend to provide conditions for the peasant unit at the pe!~kof the demo,,-raphic cycle to acquire more land and equally to exhaust
the possibilities of peasant production thus combining peasant
production with the hiring of ;.:ape-labour as a tr:msitional
capitalist form. For this reason the internal analysis of the
peasant labcur process is insufficient to draw any conclusion on the
speed and character of differentiation of the peasantry.
However, where peas;nt production survives the effect of the
~-plu8-1abcl~tiDe expended above that appropriate to capitalist
conditions i7 to push up levels of rent. Of course, as Chayanov
points out this statement must be qualified with reference to the
relative scarcity of land; In areas where there is a vast amount
of land, where net labour payment on peasant farms is no lower than
i.tp.!,-r-s and where farms operate at optimal intensity, the peasant farm
will, if it has to pay rent~ pay no more than capitalist farms, and
more probably will take land only at lower amounts. In overpopulated
arc:.s, however,in order to establish its internal equilibrium the
peasant farm is obliged to force up intensification far above the
opt i.rmlr.1, where payment in the peasant farms usual sectors is lower
than the capitalist farms wages, the peasant farm will consider it
worth,ihile to pay a much higher rent than the capitalist rent .....
~1C~ The excess rent derives from the capitalisation of the surplus-
labour of the peasant over and above average capitalist conditions.
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It is clear that in the majority of Third World countries
conditions of excess labour and of over-population do prevail,
the
problemremains as to
whythe road taken
bythe advance
capitalist countries has not been taken. One crucial area here
is the formation of the world market in industrial commodities.
This has led to the transfer of the organic composition of capital
prevailing in the advanced capitalist countries to the countries
of the Third rlorld and consequently a tendency to raise the minimum
levels of capital required to carry on capitalist production in
various key industrial sectors. This statement must, horrever, be
qualified in the sense that the industrial sector is not based upon
a neo-classical search for optimal alternatives but is carried on
on the basio of an advantage to individual units of the hieh rates
of urban and rural an and
~1de:--e~pl(lYL1ent. (Capitalistindustrial-
isation ic necessarily carried on by enterprises, therefore, there
is no guarantee that the conditions of reproduction of the enter-
prise will in any sense be equivalent to the conditions of expanded
reproduction of industrial capital at the level of the total social
capital where the limitation on the home market io clearly an
obstacle.) (15) For this reason the conditions of relative over-
populaion are sustained in the rural areas and these are precisely
the conditions which tend to force sp rents.
FO&dquo;l!!3 of Tc:~:we .
The dominant forms of tenure emphasise the limitations on
the separation between the direct producers and the means of
production. On one hand, the existence of large estates is combined
with the retention of peasant plots in particular used as a
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mechanism to keep sources of labour on the soil. Again the effect
of peasant agriculture is to depress wages below the level of that
necessary for the reproduction of labour-power andequally
as
peasant production is based on the reproduction of labour, engenders
mnano of payment in kind which both increase levels of exploitation
and limit the development of the home market.
Share cropping, or what Marx calls metayage, exhibits another
form of partial separation which 11?x:< treats as a transitional form
of capitalist agriculture. ns a transitory form from the original
form of rent to capitalist rent we may consider the metayer system,
or share―cropping, uneer which the manager (farmer) furnishes
labour (his ov;n or anot?1er! s), and also a portion of working capital
and the landlord furnishes, aside from land, another portion of
working capital (e.g. cattle), and the product is divided between
tenant and landlord in definite proportions which vary from country
to country. On the one hand, the share here appropriated by the
landlord does not bear the pure form of rent. It may actually
include interest on the capital advanced by him and an excess rent.
It may also absorb practically the entire eurplus-labour of the
farmer, or leave him a greater or smaller portion of this surplus-
labour. But, essentially, rent no longer appears here as the normal
form of surplus-value in general. On the one hand, the sharecropper
whether he employs his oim or anothers labour 13 to lay a claim
to a portion of the product not in his capacity as labourer, but
as possessor of part of the instruments of labour, as hisown
capitalist. On the other hand, the landlord claims his share not
exclusively on the basis of his landownership, but also as lender
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of capital. (16) ,
Althouch !(arx treats metayace as a transitional form this is
in part because of his assumption that the tenant isa
proto-
capitalist tenant on the English lines. However, where metaya~e is
the form of tenure and peasant production and calculation survives
the result is an increase in the levels of rent for the reasons
stated above and equally a form of tenure which encourages maximum
exploitation. Under these conditions of metayage the landlord is
able both to extract a surplus-product which could not be obtained
under capitalict conditions of production with equal employment
of capital and is equally able to extract the maximum price for
subsistence products under conditions of surplus-population.
Under these conditions then, metayage would tend to repraduce
itsclf.
Conclusion
It is now possible to return to the question por-ed at the
beyi;=in3 and. surest a tentative solution. The concept of absolute
ground-rent was deployed in capital to analyse the conditions
under which agricultural commodities could be exoluded from the
formation of an average rate of profit under conditions of comp-
etitive capitalism and how this surplus was appropriated by the
landlords,. It iias demonstrated that the economic argument
adduced by Marx were untenable for the General reason that the result
of competitive conditions on a world scale would have to produce
the same result continuously: viz~the sale of agricultural commodities
at their value which was equally assumed to be consistently in
excess of the price of production. The development of agriculture
in the advanced capitalist countries is accompanied by a progressive
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weakening of the position of landlords (at least in the sphere of
agriculture),and continuous increases of productivity of labour
in agriculture.
In advanced capitalist countries although tho pace and extent
differed from one natiorr-Gtate to another the eradication of the
peasantry was effected. In contrast the Third World* countries
exhioit a quite distinct picture. Although separation from the
meanr; of production remains incomplete, feudalism is also essentially
eradicated. In respect of the nroblem of cround―rent, therefore,
we C&dquo;L1!10~ be said to be dealing with feudal rent, for the conditions
of tenure in general preclude a rir;ht to surplus-product of a
1~~~1 kind other than that defined by capitalist contractual relations.
On the other hand, it ic clear that peasant production is distinct
from capitalist conditions of production both in term,; of the
labour-process and the conditions of calculation. It is this
distinction which forms the basis for an ecuivalent to Tiarxs
absolute ground-rent thc landlord who rents land to a peasant is
able to appropriate the sur;lus-labour-time that a peasant is willing
to work for the same remuneration in use-values as a wa~e―labourer.
This rurplus can be capitaliseci in the case of iiagc labour and
expressed as a differential rent in the classical sense. For example,
if the landlord under a metayage system provides capital to a peasant,
the capitalisable surplus-labour could be compared vrith the return
he could get from employinc labour-power using the sane capital:
the la.1dlor. share of the crop would purchase a certain amount of
labour-power. If, as we have argued, the product of this labour is
below the price of the surplus product it constitutes a rent
provided by the combination of the private ownership of land
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and partial separation of the direct producers from the means
of production. The source of a rent distinct from that deriving
from the differential fertility of the soil derives from the
combination of capitalist relations of production dominating the
reproduction of the mode of production with the limitation of the
separation of the direct producers from the means of production.
This tabsolutel rent thus derives from the comparison of the two .
note of conditions.
The domination of capitalist relations of production derive
from the conditions imposed on the Third World* nations by the
development of a capitalist world market in industrial and
c.^ical tL~xal co^.r.~od_ tics, The conditions of surplus population
created by this structure continually force up the prices of.
arJricultural commodities and ecrually push up the surplus rent we
have discussed, for the more the peasants enter into exchange with
the landlords the more the surplus-labour time conditioned by the
peasant node of organisation of the labour process can be appropriated.
This obstacle to the development of a capitalist labour process is
not in this sense distinct from the conditions under which peasant
agriculture foujht a rearward action in the advanced capitalist
countries,. The distinction lies in the fact that the conditions
of capitalist production on a ,,;orld scale have accelerated the
uneven development between the advanced capitalist nation-states
and the subordinate bourgeois remimes of the Third ilorld. It
is this uneven development which paradoxically counterposes the
organic composition of capital of the advanced capitalist countries
to pre-capitalist labour processes as means of extracting the bounty
of peasant surplus-labour.
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Notes
1. Karl Marx; Capital
,
Vol. III ( Foreign Languages Publishing
Houre: Moscow 1962) P. 634.
2. In this case profits are not equalised, an example of this is
the operation of land grants in 19th centuryAmerica.
3. On this point see V.I Lenin TheAgrarian Programme of Social
Democracy in the First Russian Revolution
1905-1907.Collected Works Vol. 13 and B. Hindess Lenin and theAgrarian
Question in the First Russian Revolution Theoretical Practice
No. 6 May 1972.
4. The price of land will be equal to theAnnual Rent 100 Rate ofInterest
5. Karl Marx: Tneories of Surplus-Value Part Two (Lawrence andWishart: London 1969) P. 332.
6. See on these points the critique of absolute rent presented
byA. Emmanuel in Unequal Exchange (New Left Books London 1972)
Ps218-9.
7. Clearly only those commodities which figure in the reproduction
of labour-power are relevant here, i.e. luxury commodities
are excluded.
8. The clearest examples are France and Japan.
9. It is for this reason that distinctions between skilled and
unskilled labour are necessarily ideological under the
capitalist mode of production.
10. Yields inAmerican agriculture for food grain crops (wheat and
rice) are approximately six times the level attained in India,
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Notes
see R. Revelle Food and Population ScientificAmerican Sept 1974,
the authors estimate of the contribution to yield of differing
elements appears on P. 165 of the article, irrigation gives
the greatest contribution and chemical fertilisers come second.
11. A.V. Chayanov: On the Theory of Peasant Economy (Edited by
D. Thorner, B. Kerblay and R.E.F. Smith, R.D. Irwin Homewood
Illinois 1966)
12. For an attempt to apply Chayanovs theory in a Narodnik fashion
see T. Shanin TheAwkward Class (Oxford University Press, 1972),
13. Chayanov P. 40
14. Ibid P. 235
15. On this point see G. Kay Development and Underdevelopment
(Maemillan London 1975) P. 130.
16. Capital,
Vol. III, P. 783.