We have seen that merchants' capital and interest-bearing capital are the most ancient forms of capital. In the nature of the case, interest-bearing capital assumes in the popular conception tlie form of capital par excellence. In the case of merchants' capital, the activity of a middle man is performed, no matter whether it be rated as cheating, labor, or anything else. But in the case of interest-bearing capital the self-re- producing character of capital, the self-expansion of value, the production of surplus-value, surrounds itself with the qualities of the the occult. This accounts for the fact that even a part of the political economists, particularly in countries in which industrial capital is not yet fully de- veloped, as in France, cling to interest-bearing capital as the fundamental form of capital and regard, for instance, ground rent merely as a modified form of it, because the form of lending predominates also in it. In this way the internal articulation of the capitalist mode of production is completely misunderstood, and the fact is entirely overlooked that land, like capital, is loaned only to capitalists. Of course, natural means of production, such as machines, business buildings, etc., may also be loaned instead of money. But they always represent a certain sum of money, and the fact that not only interest, but also wear and tear has to be paid for them, is due to their use-value, the specific natural form of these elements of capital. The thing which decides in this case is whether they are loaned to the direct producers, which would imply the non-existence of the capitalist mode of production, at least in the sphere in which this takes place, or whether they are loaned to the industrial capitalists, which is the basic assumption under the capitalist mode of production. It is still more improper and meaningless to drag the lending of houses, etc., for individual consumption into this part of 7i6 Capitalist Production.
the discussion. That the working class is swindled to an enormous extent, in this way as well as in others, is an evident fact; but this is done also by the retail dealer, who sells them means of subsistence. It is a secondary exploitation, which runs parallel with the primary one taking place in the process of production itself. The distinction between selling and loaning is quite immaterial in this case and merely formal, and cannot appear as essential to any one, unless he be wholly unfamiliar with the actual condition of the problem.
7/ Both usury and commerce exploit the various modes of pro- ( duction. They do not create it, but attack it from the outside. 1 Usury tries to maintain it directly, in order to be able to \ exploit it ever anew, but it is conservative and makes it only \ more miserable. The less the elements of production enter me process of production as commodities and come out of it as commodities, the more does their descent from money ap- pear as a separate act. The more significant the role played by circulation in the social reproduction, the more does usury flourish.
That moneyed wealth develops as a special kind of wealth means with reference to usurer's capital that it collects all its claims in money. It develops so much more in any country, the more the mass of production limits itself to nadiral services, etc., that is, to use-values.
/ To that extent usury has a double effect. First, it frames /up an independent moneyed wealth by the side of the mer- / chant class. In the second place it appropriates to itself the I prerequisites of labor, that is, it ruins the owners of the old I requisites of production. Thus it becomes a powerful lever Vfor the formation of the requirements of industrial capital.
Interest in the Middle Ages.
Tn the Middle Ages the population was purely agricultural, id there, as under feudal rule, commerce can be but small id consequently profit but slight. Hence the laws against Precapitalist Conditions. 717 usury were justified in the Middle Ages. Moreover, in an agricultural eountrj one has rarely any occasion for borrow- ing money, except when reduced by poverty and misery...Henry VIII limits interest to 10%, Jacob I. to 8%, Charles II, to 6%, Anne to 5%...In those days the money-lenders, if not legally, were at least in fact monop- olists, and therefore it was necessary to place them under re- striction like other monopolists,...In our times the rate of profit regulates the rate of interest; in those times the rate of interest regulated the rate of profit. If the money- lender loaded a heavy rate of interest on the merchant, then the merchant had to add a higher rate of profit to the price of his commodities. Consequently a large sum of money was taken out of the pockets of the buyers in order to put it into the pockets of the money-lenders. (Gilbart, History and Principles of Banking, pp. 164, 165.)
" I have been told that 10 gulden are now taken annually on every Leipsic fair, that is 30 on each hundred; some add the Neuenburg fair and make it 40 per hundred; whether that is so, I don't know. For shame, where the devil is that going to end?...Whoever has now 100 florins at Leipsic, takes 40 annually, which is the same as devouring one peasant or burgher each year. If one has 1,000 florins, he takes 400 annually, which means devouring a knight or a rich noble per year. If one has 10,000 florins, he takes 4,000 per year, which means devouring a rich count each year. If one has 100,000 florins, as the great merchants must have, he takes 40,000 annually, which means devouring one great rich prince each year. If one has 1,000,000 florins, he takes 400,000 annually, which means devouring one great king each year. And he does not run any risks, either in his person or his wares, does not work, sits near his fireplace and roasts apples; so might a petty robber be sitting at home and devour a whole world in ten years." (Bilcher vom Kaufhandel und Wucher, 1524. Luther's Works, Witten- berg, 1589, Part VI.)
" Fifteen years ago I wrote against usury, when it had spread so alarmingly, that I did not hope for any improve- 7iS Capitalist Production.
raent. Since then it has become so proud, that it does not, care to be classed as a vice, sin, or shame, but gets itself praised as a pure virtue and honor, just as though it Avere doing people a great favor and Christian service. What are we going to do now that shame has become honor and vice virtue? (Martin Luther, An die Pfarherm wider den Wucher zu predigen. Wittenberg,! 540.)
Jews, Lombards, usurers and bloodsuckers Avere our first bankers, our original bank sharks, their character being such as to be called almost infamous...Thej were joined by the London goldsmiths. On the whole...our original bankers...were a veiy bad crowd, they were greedy usurers, stony-hearted vampires. (J, Hardcastle, Banks and Bankers. Second edition, London, 1843, pages 19 and 20.)
The example given by Venice (in the matter of establishing a bank) Avas quickly imitated; all sea tOAA'ns, and in general all towns which had made a name for themselves by their independence and their commerce, founded their first banks. The return of their ships, Avhich often took a long time, led inevitably to the custom of giving credit, Avhich was further intensified by the discovery of America and the commerce Avith it. (This is one of the main points.) The freighting of ships made the taking of heavy loans necessary, a thing already occuring in ancient Athens and Greece. In 1380 the Hansa toAvn of Bruges had an insurance company. (M. Au- To Avhat extent the making of loans to land OAvners, and to wealth consumers in general, still prevailed in the last third of the 17th century, CA'en in England, before the de- velopment of the modern credit system, may be seen in the Avorks of Sir Dudley JSTorth, among others. He was not only <^e of the first English merchants, but also one of the most prominent theoretical economists of his time. And he says: The money loaned among our people at interest is not even |j{ to a tenth part given to business people for carrying on their ' affairs; it is loaned for the gi'eater part for articles of luxury, Precapitalist Conditions. 719 and for the expenditures of people, who, although great real estate owners, nevertheless spend money faster than is made by their real estate; and since they hate to sell their estates, prefer to mortgage them. {Discourses upon Tirade. Lon- Poland in the 18th century: "Warsaw did a great busi- ness in exchange, which, however had for its principal basis and aim the usury of its bankers. In order to secure money, which they might lend to spendthrift nobles at 8% and more, they sought and obtained abroad an exchange credit in blank, that is, it had no commerce with commodities at all for a foundation, but the foreign endorser of the bill stood it patiently, so long as the returns from swindling with bills of exchange did not fail. However, they paid heavily for this by the bankruptcies of men like Tapper and other highly re- spected Warsaw bankers." (J. G. Biisch, Theoretisch-praJc- tische Darstellung der Handlung, etc., third edition, Ham- burg, 1808, volume II, pages 232 and 233.) Advantage of the Prohihition of Interest for the Church.
" The taking of interest had been forbidden by the church. But the sale of property for the purpose of getting out of a tight place had not been forbidden. It had not even been forbidden to transfer property for a certain period to the money lender as a security, until such time as the debtor should repay his loan, so that the money lender might have the use of the property as a reward for the absence of his money...The church itself and the various corpora- tions and communes belonging to it derived mucli profit from this practice, particularly during the period of the crusades. This brought a very large portion of the national wealth into the possession of the so-called ' dead hand,' all the more so be- cause the Jews were barred from engaging in such usury, the possession of such fixed liens not being concealable. . W^ithout the ban on interest the churches and clois- ters would never have become so rich." (L. c, p. 55.)
PART VI.
TRANSFOKMATION OF SUKPLUS PROFIT INTO GROUND-RENT.
CHAPTER XXXVII.
PRELIMINARIES.
The analysis of landed property in its various historical forms belongs outside of the limits of this work. We shall occupy ourselves with it in this place only to the extent that a portion of the suqjlus-value produced by the industrial capital falls into the hands of the land owner. We assume, then, that agriculture is dominated by the capitalist mode of production, just as manufacture is, in other words, that agri- culture is carried on by capitalists, who differ primarily from the other capitalists only through the element, in which their capital and the wage-labor set in motion by this capital are invested. So far as we are concerned, the capitalist farmer produces wheat, etc., in the same way that the manufacturer produces yarn or machines. The assumption that the capi- talist mode of production has seized agriculture implies that it rules all spheres of production and bourgeois society, so that its prerequisites, such as free competition among cap- itals, the possibility of transferring them from one sphere of production to another, a uniform level of the average rate of profit, etc., are fully matured. The form of landed prop- erty which we consider here is a specifically historical one, a form altered through the influence of capital and of the capitalist mode of production, and evolved either out of feudal land ownership, or out of small peasants' agriculture carried Preliminaries. 721 on for a living, in which the possession of land constitutes one of the prerequisites of production for the direct producer, and in which his ownership of land appears as the most advanta- geous condition for the prosperity of his mode of production. Just as capitalist production is conditioned in a general way on the expropriation of the laborers from their requirements of production, so capitalist agriculture demands the expropria- tion of the rural laborers from the land and their subordina- tion to a capitalist, who carries on agriculture for the sake of profit. For the results of our analysis the objection, that other forms of landed property and of agriculture have ex- isted or still exist, is quite irrelevant. Such an objection cannot apply to any one else but to those economists, who treat of the capitalist mode of production in agriculture, and of the form of landed property corresponding to it, as though it were not a historical but an eternal category.
For our purposes it is necessary to study the modern form of landed property, because it is our business to consider the typical conditions of production and commerce, which arise from the investment of capital in agriculture. Without this our analysis of capital would not be complete. We therefore confine ourselves exclusively to the investment of capital in agriculture strictly so-called, that is, capital invested in the production of the principal plant crop, on which a certain population lives. We may say wheat, because it is the prin- cipal article of food among the modern capitalistically devel- oped nations (or mining instead of agriculture, because the laws of both are the same).
It is one of the gTeat merits of Adam Smith to have shown that the ground rent for capital invested in the production of such crops as flax, dye stuffs, independent cattle raising, etc., is determined by the ground rent obtained from capital in- vested in the production of the principal article of subsist- ence. In fact no progress has been made in this since his time. What we might add in the way of exception or sup- plement belongs in a separate study of landed property, not here. Hence we shall not speak of landed property outside 2T 722 Capitalist Production.
of the land destined for the production of wheat in the man- ner of exports, but shall merely refer to it occasionally by way of illustration.
For the sake of completeness we shall remark, that we in- clude also water, etc., in the term land, so far as it has an owner and belongs as an accessory to the soil.
Landed property is conditioned on the monopolisation of certain portions of the globe by private persons, for the pur- pose of making these portions the exclusive spheres of their private will and keeping all others away from it.^^^ With this in mind, the problem is to ascertain the economic value, that is, the employment of this monopoly on the basis of cap- italist production. With the legal power of these persons to use or misuse certain portions of the globe nothing is settled. The use of this power depends wholly upon economic condi- ^^^ Nothing could be more comical than Hegel's development of private property in land. According to him, man as an individual must give reality to his will as the soul of external nature, and to this end he must take possession of nature and make her his private property. If this were the destiny of " the individual," of man as an individual, it would follow that every human being must be a land- owner, in order to materialise as an individual. Free private property in land, a very recent product, is not a definite social relation, according to Hegel, but a relation of man as an individual to " nature, an absolute right of man to ap- propriate all things." (Hegel, Philosophy of Law, Berlin, 1840, p. 79.) So much at least, is evident, that the individual cannot maintain himself as a landowner by his mere " will " against the will of another individual, who likewise wants to materialise himself in the same piece of land. It requires a good many other things besides the good will. Furthermore, it is absolutely beyond any one's ken to decide, where " the individual " should draw the line for the realisation of his will, whether the presence of his will should materialise in one whole country, or whether it should require a whole bunch of countries by whose appropriation I might " manifest the supremacy of my will over the thing." Here Hegel breaks down. "The appropriation is of a very individual kind; I do not take possession of more than I touch with my body, but the second point is at the same time that external things have a greater extension than I can grasp. While I thus have possession of a thing, something else is likewise in touch with it. I exercise my appropriation by my hand, but its scope may be extended." (P. 90.) But this other thing is again in touch with still another, and so the boundary disappears, within which I might pour my will as the soul of the soil. " If I own anything, my reason at once passes on to the idea that not only this prop- erty, but also the thing it touches is mine. Here positive right must fix its boundaries, for nothing more can be deduced from the conception." (P. 91.) This is an extraordinarily naive confession of the " conception," and it proves that this conception, which makes at the outset the mistake of regarding a very definite legal conception of landed property belonging to bourgeois society as an absolute one, does not understand anything of the actual articulations of this property. This implies at the same time the confession, that the " positive " law may, and must, alter its decisions in proportion as the requirements of social, i.e. economic development, change.
Preliminaries. 722, tions, which are independent of their will. The legal con- ception itself signifies nothing else bnt that the land owner mav do with the soil what the owner of commodities may do* with them. And this conception, this legal conception of free property in land, arises in the ancient world only with the dissolution of the organic order of society, and in the modern world only with the development of capitalist pro- duction. Into Asia it has been imported by Europeans in bnt a few places. In that Part of our work, which deals with primitive accumulation (Volume I, chapter XXVI), we have seen that this mode of production presupposes on the one hand the separation of the direct producers from their position as mere attachments to the soil (in their capacity of bondsmen, serfs, slaves, etc.), on the other hand the expropriation of the mass of the people from the land. To this extent the mo- nopoly of landed property is a historical premise, and remains the basis, of the capitalist mode of production, just as it does of all other modes of production, which rests on the exploita- tion of the masses in one form or another. But that form of landed property, which the capitalist mode of production meets in its first stages, does not suit its requirements. It creates for itself that form of property in land, which is adapted to its requirements, by subordinating agriculture to the dominion of capital. It transforms feudal landed prop- erty, tribal property, small peasants' property in mark com- munes, whatever may be their legal form, into the economic form corresponding to the requirements of capitalism. It is one of the great outcomes of the capitalist mode of produc- tion, that it transforms agriculture from a merely empirical and mechanically perpetuated process of the least developed part of society into a consciously scientific application of ag- ronomics, so far as this is at all feasible under the conditions going with private property;^^^ that it detaches property in ^" \'ery conservative agricultural chemists, for instance Johnston, admit that a really rational agriculture meets everywhere insurmountable barriers through the existence of private property. So do writers, who are confessedly advocates of the monopoly of private property on the globe, for instance Charles Comte in his work of two volumes, which has for its special aim the defense of private property. " A nation," says he, " cannot attain to the degree of prosperity and power com- patible with its nature, unless every portion of the soil nourishing it is assigned 724 Capitalist Production.
land on the one side from the relations between master and servant, and on the other hand totally separates land as an 'instrument of production from property in land and land owners, for whom it represents merely a certain tribute of money, which he collects by force of his monopoly from the industrial capitalist, the capitalist farmer. It dissolves all these connections so thoroughly, that the o-^^ner of the land may spend his whole life in Constantinople, while his estates are in Scotland. Private property in land thus receives its purely economic form by discarding all its former political and social trappings and implications, in brief all those tra- ditional accessories, which are denounced as a useless and absurd attachment by the industrial capitalists and their the- oretical spokesmen in the heat of their struggle with landed property, as we shall see later. The rationalising of agricul- ture on the one hand and thus rendering it capable of opera- tion on a social scale, and the reduction ad dbsurdum of pri- vate property in land on the other hand, these are the great merits of the capitalist mode of production. Like all its other historical advances it bought these also by first com- pletely pauperizing the direct producers.
Before we pass on to the problem itself, we must make a few more preliminary remarks in order to forestall misun- derstanding.
The premises for a capitalist production in agriculture are these: The actual tillers of the soil are wage-laborers, emto that purpose which agrees best with the general interest. In order to give to its wealth a strong development, one sole and highly enlightened will should, if possible, take it upon himself to assign to each piece of his domain its task and make every piece contribute to the prosperity of all others. But the existence of such a will...would be incompatible with the division of the land into private plots...and with the ability of each owner to dispose of his property in an almost absolute manner, according to constitutional guarantees." — Johnston, Comte, and others, have in mind only the necessity of tilling the land of a certain country as a whole, when they speak of an antagonism of private property to a rational system of agronomics. But the dependence of the cultivation of par- ticular products of the soil upon the fluctuations of market prices, and the con- tinual changes of this cultivation with these fluctuations of prices, the whole spirit of capitalist production, which is directed toward the immediate gain of money, contradicts agriculture, which has to minister to the entire range of permanent necessities of life required by a network of human generations. A striking illus- tration of this is furnished by the forests, which are occasionally managed in a way befitting the interests of society as a whole, when they are not private property, but subject to the control of the state.
Preliminaries. 725 ployed by a capitalist, the capitalist farmer, who carries on agriculture merely as a special field of exploitation for his capital, an investment of his capital in a special sphere of production. This renting capitalist pays to the land owner, the owner of the soil exploited by him, a sum of money at definite periods fixed by contract, for instance annually (just as the borrower of money-capital pays a fixed interest), for the permission to invest his capital in this particular sphere of production. This sum of money is called ground-rent, no matter whether it is paid for agriculture soil, building lots, mines, fishing grounds, forests, etc. It is paid for the en- tire time, during which the land owner has rented his land to the capitalist by contract. Ground-rent, therefore, is that form, in which property in land realizes itself economically, that is, produces value. Here, then, Ave have all three classes together, which constitute the frame work of modern society, and they have divergent interests — wage-laborers, industrial capitalists, land owners.
Capital may be fixed in the soil, may be incorporated in it, either in a transient manner, as it is by improvements of a chemical nature, fertilization, etc., or more permanently, as in drainage canals, irrigation works, leveling, farm buildings, etc. In another place I have called the capital thus incor- porated in the soil land-capital}'^^ It belongs in the cate- gories of fixed capital. The interest on the capital thus in- corporated in the soil and the improvements thus made in it as an instrument of production may form a part of the rent paid by the capitalist farmer to the land owner,^-^ but it does not constitute that ground-rent, strictly speaking, which is paid for the use of the soil as such, whether it be in a natural state or cultivated. In a systematic treatment of private property in land, which is not included in our plan, this part '™ The Poverty of Philosophy, p. 148. There I have made a distinction between land-capital and material land. " By merely applying additional capital to land already transformed into means of production land-capital may be augmented without adding anything to the material land, that is to say, to the extent of the land...As capital, land is not more eternal than any other capital. Land-capital is fixed capital, but fixed capital is used up as well as circulating capital."
^^ I say " may," because under certain circumstances this interest is regulated by the law of ground-rent and may disappear, for instance, in the case of compe- tition between lands of great natural fertility.
726 Capitalist Production.
of the revenue of the land owner would have to be discussed at length. But a few words about it will suffice here. The more transient investments of capital which go wi'th the ordi- nary processes of production in agriculture, are made with- out exception by the capitalist farmer. These investments, like cultivation proper, improve the soil,^^^ if cultivation is carried on in a moderately rational manner and does not re- duce itself to a brutal spoliation of the soil, such as used to be in vogue among the former slave holders in the United States, a thing against which the land owTiers may provide by con- tract. In this way material land is transformed into land- capital. A cultivated field is worth more than an unculti- vated one of the same natural quality. Likewise the more permanent fixed capitals, which are incorporated in the soil and worn out in longer time, are largely, and in some spheres often exclusively, invested by the capitalist farmer. But as soon as the time stipulated by contract has expired — and this is one of the reasons why the land owners seek to shorten the time of contract as much as possible when cap- italist production develops — the improvements embodied