2 qrs. 4 qrs. 6 qrs.
0 Totals 8 Let us assume two other cases, and let the first be one, in which production expands on the two inferior classes of soil, in the following manner: Table I h.
Class of Acres Cost of Product Product Rent in Grain Soil Per Acre Total Money A B C D 4 4 2 2 4 qrs.
8 qrs. 6 qrs. 8 qrs.
0 Totals 12 Finally let us assume an unequal expansion of production and of the cultivated area on all four classes, in the following manner: Table I c.
Class of Acres Cost of Product Product Rent in Grain Soil Per Acre Total Money A B C D 1 2 5 4 3p St.
Iqr. 4 qrs.
0 2 qrs.
0 Totals 12 In the first place, the rent per acre remains the same in all these four cases 1, la, lb and I c. For in fact the result of the same investment of capital per acre of the same class of soil has remained unchanged. Nothing more has been assumed than a fact which may be observed in any country at any given moment, namely that the various classes of soil participate in certain definite proportions in the entire cul- 7/6 Capitalist Production.
tivated area. And furthermore, a fact which may be ob- served in any two countries that are compared, or in the same country at different periods of time, namely that the propor- tion varies in which the cultivated area is distributed among these classes.
If we compare la with I, then we see, if the cultivation of the soils of all four classes grows in the same proportion, that a doubling of the cultivated acres doubles the total pro- duction, and at the same time doubles the rent in grain and money.
If we compare lb and Ic successively with I, we see that in both cases a triplication of the area subject to cultivation takes place. It rises in both cases from 4 acres to 12, but in lb it is the classes A and B which get the greatest share of the increase, although A pays no rent, and B yields the small- est differential rent. But of 8 newly cultivated acres A and B get 3 each, or 6 between the two of them, whereas C and D get only 1 acre each, or together 2 acres. In other words, three-quarters of the increase go to A and B, and only one- quarter to C and D. According to this assumption and com- paring lb with I, the trebled area of cultivation does not re- sult in a trebled product, for the product does not increase from 10 to 30, but only to 26. On the other hand, seeing that a considerable portion of the increase takes place on A, which does not yield any rent, and since the principal por- tion of the remaining increase takes place on B, the rent in grain rises only from 6 quarters to 14, and the rent in money from 18 pounds sterling to 42.
But if we compare Ic with I, where the soil yielding no rent does not increase in area, and the soil yielding a mini- mum rent increases but slightly, while the principal portion of the increase takes place on C and D, we find that the treb- led area results in an increase of production from 10 quar- ters to 36, more than three times the quantity. The rent in grain has risen from 6 quarters to 24, or quadrupled; and so has the money rent from 18 pounds sterling to 72.
In all these cases the price of the agricultural product naturally remains stationary. The total rental increases in First Form of Differential Rent. yyy all cases with the extension of cultivation, unless it takes place exclusively on the worst soil, which does not pay any rent. But the growth is unequal. In proportion as the ex- tension of cultivation takes place upon the superior classes of soil and consequently the quantity of the products grows not merely at the ratio of expansion of the area, but even faster, the rent in grain and money increases. In proportion as the worst soil and the class next above it share principally in the expansion of the area (provided that the worst soil represents a constant class), the total rental does not rise in proportion to the extension of cultivation. If there are two countries, in which the class A, that yields no rent, is of the same nature, the rental stands in the reverse ratio to the ali- quot part represented by the worst soil and the lesser classes next above it in the total area of the cultivated soil, and there- fore in the reverse ratio to the quantity of the products of equal investments of capital on the same total areas of land. The proportion between the quantity of the worst cultivated soil and that of the better soil, within the total cultivated area of a certain countr)^, thus has the opposite effect upon the total rental than the proportion between the quality of the worst cultivated soil and that of the better soil has upon the rent per acre and, other circumstances remaining tlie same, upon the total rental. The confounding these two things has given rise to many mistaken objections to differential rent.
The total rental, then, increases by the mere extension of the cultivation, and by the consequent greater investment of capital and labor in the soil.
But the most important point is tliis: Although it is our assumption that the proportion of the rents upon the various classes of soil remains the same, calculated per acre, and therefore also the rate of rent considered with reference to the capital invested in each acre, yet we must observe the fol- lowing: If we compare la with I, the case in which the number of cultivated acres and the capital invested in them have been proportionately increased, we find that just as the total production has increased proportionately to the expanded agricultural area, that is just as both' of them have been 'jy'^ Capitalist Production.
doubled, so has the reiitaL It has risen from 18 pounds ster- ling to 36, just as the number of acres has risen from 4 to 8.
If we take the total area of 4 acres, we find that the total rental amounted to 18 pounds sterling, or the average rent, in- cluding the soil which does not pay any rent, 4^ pounds ster- ling. This calculation might be made, say, by a landlord owning all 4 acres. And in this way the average rent is statistically calculated upon a whole country. The total rental of 18 pounds sterling is secured by the investment of a capital of 10 pounds sterling. We call the ratio of these two figures the rate of rent; in the present case it is 180%.
The same rate of rent follows in la, where 8 instead of 4 acres are cultivated, but all classes of land have shared in the same proportion in the increase. The total rental of 36 pounds sterling gives for 8 acres and an invested capital of 20 pounds sterling an average rent of 4^ pounds sterling per acre and a rate of rent of 180%.
But if we consider lb, in which the increase has taken place mainly upon tlie two inferior classes of soil, we find there a rent of 42 pounds sterling upon 12 acres, or an average rent of 3^ pounds sterling per acre. The invested total capital is 30 pounds sterling, and the rate of rent 140%. The aver- age rent per acre has decreased by one pound sterling, and the rate of rent has fallen from 180 to 140%. Here then we have an increase of the total rental from 18 pounds sterling to 42, and yet a fall of the average rent, calculated both per acre and per capital, while production grows also, but not proportionately. This takes place, although the rent upon all classes of soil, both per acre and per capital, remains the same. It does so, because three-quarters of the increase go to the class A, which does not pay any rent, and upon class B, which pays only the minimum rent.
If the total extension in the case lb had taken place only upon the soil A, then we should have 9 acres upon A, 1 acre upon B, 1 acre upon C and 1 acre upon D. The total rental would be 18 pounds sterling, the same as before, the average rent upon the 12 acres would be 1^ p. st. per acre; and a rent of 18 pounds sterling on an invested capital of 30 pounds First Form of Differential Rent. 779 sterling would give a rate of rent of 60%. The average rent, both per acre and per invested capital, would have decreased, and the total rental would not have increased.
Finally, let us compare Ic with I and lb. Compared to I, the area has been trebled, also the invested capital. The total rental is 72 pounds sterling upon 12 acres, or 6 pounds sterling per acre against 4^ pounds sterling in case I. The rate of rent upon the invested capital (72: 30 pounds ster- ling) is 240% instead of 180%. The total product has risen from 10 quarters to 36.
Compared to lb, where the total area of the cultivated acres, the invested capital, and the difference between the cultivated classes are the same, but the distribution different, the product is 36 quarters instead of 26, the average rent per acre is 6 pounds sterling instead of 3^, and the rate of rent with reference to the same invested total capital is 240% instead of 140%.
Xo matter whether we regard the various conditions in Tables la, lb and Ic as existing side bj side in different countries, or as existing successively in the same country, we come to the following conclusions: so long as we have the conditions mentioned hereafter, that is, so long as the price of cereals remains unchanged, because the worst rentless soil has the same product; so long as the differences in the pro- ductivity of the different cultivated soils remain the same: so long as the respective products of the same invested cap- itals are the same for aliquot parts (acres) of the areas cul- tivated in every class of soil; so long as the ratio between the rents per acre of each class of soils and with the same rate of rent upon the capital invested in each portion of the same kind of soil is constant: 1) the rental always increases with the extension of the cultivated area and with the consequent in- creased investment of capital, with the exception of the case in which the entire increase falls on the rentless soil. 2) Both the average rent per acre (total rental divided by the total nimiber of acres) and the average rate of rent (total rental divided by the invested total capital) may vary very considerably; both of them in the same direction, bat in dif- /So Capitalist Production.
ferent proportions compared to one another. If we leave out of consideration the case, in which the increase takes place upon the rentless soil, we find that the average rent per acre and the average rate of rent upon the capital in- vested in agriculture depend upon the proportional shares, which the various classes of soil claim in the cultivated area; or, what amounts to the same, upon the distribution of the employed total capital among the classes of soil of different fertility. Whether much or little land is cultivated, and whether the total rental is therefore larger or smaller (with the exception of the case, in which the increase is confined to A) the average rent per acre, or the average rent per in- vested capital, remains the same so long as the proportions of the participation of the various classes of soil in the total cultivated area remain unchanged. In spite of the rise, even of a very considerable one, in the total rental with the ex- tension of cultivation and the expansion of the invested cap- ital, the average rent per acre and the average rent per cap- ital fall whenever the extension of the rentless lands, or of the lands of inferior fertility, increases more than that of the superior rent paying ones. On the other hand the average rent per acre and the average rent per capital increase in proportion as the better lands constitute a greater part of the total area and employ a relatively greater share of the in- vested capital.
Hence, if we consider the average rent per acre, or hectare, of the total cultivated soil, in the way that is generally done in statistical works, by comparing either different countries at different epochs, or different epochs in the same country, we find that the average level of the rent per acre, and con- sequently the total rental, corresponds in certain proportions (although by no means equal ones, but rather more rapidly moving ones) to the absolute, not to the relative, productivity of agriculture in a certain country, that is, to the mass of products brought forth by it on an average upon the same area. For the larger the share taken by the superior soils in the total cultivated area, the greater is the mass of products brought forth by equal investments of capital upon equally II First Form of Differential Rent. 781 large areas of land. And the higher is the average rent per acre. In the opposite case the reverse takes place. In this way the rent does not seem to be determined by the ratios of differential fertility, but of absolute fertility, and the law of differential rent seems thereby abolished. For this rea- son certain phenomena are disputed, or perhaps they are ex- plained by non-existing differences in the average prices of cereals and in the differential fertility of the cultivated lands, whereas such phenomena are merely due to the fact that the ratio of the total rental, either to the total area of the culti- vated soil, or to the total capital invested in this soil, so long as the fertility of the rentless soil remains the same and with it the price of production, and so long as the differences of the various classes of soil remain unchanged, is determined not merely by the rent per acre or the rate of rent per cap- ital, but quite as much by the proportional number of acres of each class of soil in the total number of cultivated acres; or, what amounts to the same, by the distribution of the in- vested total capital among the various classes of land. Curi- ously enough this fact has been completely overlooked so far.
At any rate we see (and this is important for the progress of our analysis), that the relative level of the average rent per acre, and the average rate of rent (or the ratio of the total rental to the total capital invested in the soil), may rise or fall, through the mere extensive expansion of cultivation, while prices remain the same, the differential fertilities of the various soils remain unaltered, and the rent per acre is constant, or while the rate of rent for the capital invested per acre in every actual rent paying class of soil, or for every rent paying capital, remains unchanged.
We have to make the following additional remarks with reference to the form I of the differential rent, which also apply partly to form II: 1) We have seen that the average rent per acre, or the average rate of rent per capital, may rise with an extension of cultivation, with stationary prices, and unaltered differ- 782 Capitalist Production.
ential fertilities of the cultivated lands. As soon as all the land in a certain country has been appropriated, while the investment of capital in land, the cultivation of the soil, and the population, have reached a certain level — all of which conditions are matters of fact as soon as the capitalist mode of production becomes the prevailing one and invades also agriculture — the price of the uncultivated soil of various classes (assuming differential rent to exist) is determined by the price of the cultivated lands of the same quality and equivalent location. The price is the same — ' after deduct- ing the cost of breaking the ground — although this soil does not carry any rent. The price of the land is, indeed, nothing but the capitalised rent. But even in the case of cultivated lands their price pays only future rents, as for instance, when the regulating rate of interest is 5% and the rent for twenty years is paid in advance at one time. When land is sold, it is sold as a rent paying land, and the prospective character of the rent (which is here considered as a fruit of the soil, which it is only seemingly) does not distinguish the unculti- vated from the cultivated soil. The price of the uncultivated lands, like their rent, which it represents as though it were its contracted formula, is quite illusory, so long as the land is not actually used. But it is thus determined beforehand and realised as soon as a purchaser is found. Hence, Avhile the actual average rent of a certain land is determined by its real average rental per year and by its proportion to the en- tire cultivated area, the price of the uncultivated portions of land is determined by that of the cultivated land, and is therefore but a reflex of the capital invested in cultivated land and of the results obtained by such investments. Since all lands with the exception of the worst carry rent (and this rent, as we shall see under the head of differential rent IT, rises with the mass of the capital and the corresponding in- tensity of cultivation), the nominal price of the uncultivated portions of the soil is thus formed, and thus they become com- modities, a source of wealth for their owners. This explains at the same time, why the price of laud increases in the whole region, even in the uncultivated part (Opdyke). The spec- First Form of Differential Rent. 783 ulation in land, for instance in the United States, rests merely upon this reflex, which capital and labor throw on the uncultivated land.
2) The advance in the extension of the cultivated soil in general takes place either toward inferior soil, or upon the various existing soils in different proportions according to the way in which they present themselves. The step toward inferior soil naturally is never made voluntarily, but cannot he due to atiy thing but to rising prices (assuming the cap- italist mode of production to be a fact), and under any mode of production it will be a result of necessity. However, this is not absolutely so. An inferior soil is preferred to a rela- tively better soil on account of its location, which decides the point during all extension of cultivation in new coun- tries; furthermore for the reason that, while the formation of the soil in a certain region may belong to the superior ones, the better will nevertheless be relieved here and there by inferior soil, so that the inferior soil must be cultivated along with the superior on account of its location. If in- ferior soil is surrounded by superior soil, then the better soil gives to the poorer soil the advantage of location as against other and more fertile soil, which is not connected with the already cultivated soil, or with soil about to be cultivated.
In this way the state of Michigan was one of the first to export corn. Yet its soil is on the whole poor. But its vicinity to the state of I^ew York and its water routes by lakes and by the Erie Canal gave to it the advantage before the naturally more fertile states which were farther west. The example of this state, as compared to the state of 'New York, shows us also the transition from superior to inferior soil. The soil of the state of ISTew York, particularly the western portion of it, is far more fertile, particularly in the raising of wheat. This fertile soil was made sterile by rob- bing it, and now the soil of Michigan appeared as the more fertile.
"In 1836 wheat flour was shipped from Buffalo to the West, principally from the wheat belt of ISTew York and Canada. At present, only 12 years later, enormous supplies 784 Capitalist Production.
of wheat and flour are brought from the West, by "way of Lake Erie, and shipped East upon the Erie Canal, in Buffalo and the neighboring port of Blackrock. The export of wheat and flour was particularly stimulated by the European fam- ine in 1847. The \yheat in western New York thus became cheaper, and the raising of wheat less profitable; this caused the New York farmers to throw themselves more upon cattle raising and dairying, fruit growing, etc., lines in which the Northwest, in their opinion, will be unable to compete with them directly." (J. W. Johnston, Notes on North America, 3) It is a mistaken assumption that the land in colonies, and in new countries generally, which can export cereals at cheaper prices, must for that reason be necessarily of a greater natural fertility. The cereals are not only sold below their value in such cases, but below their price of production, namely below the price of production determined by the rate of profit in the older countries.
The fact that we, as Johnston says (p. 223) '•' are accus- tomed to connect with these new states, which ship annually such large supplies of wheat to Buffalo, the idea of great natural fertility and endless stretches of rich soil," depends primarily upon economic conditions. The entire population of such a country, for instance of Michigan, is at first almost exclusively engaged in agriculture, and particularly in produc- ing agricultural goods in large masses, which they can alone exchange for products of industry and tropical goods. The whole surplus product of this population appears, therefore, in the shape of cereals. This distinguishes from the outset the colonial states founded on the basis of the modern world market from those of former, particularly of antique, times. They receive from the world market finished products, which they would have to make themselves under different circum- stances, such as clothing, tools, etc. Only on such a basis were the southern states of the Union enabled to make of cot- ton their staple product The division of labor upon the world market permitted this. Hence, if they seem to pro- duce a large surplus product in spite of their youth and small First Form of Differential Rent. 785 relative population, it is not due to the fertility of their soil, nor to the productivity of their labor, but to the onesided form of their labor, and therefore of the surplus product, in which this labor is incorporated.
Furthermore, a relatively inferior soil, which is newly cul- tivated and was never touched by civilisation before, has ac- cumulated much easily soluble plant food, at least in its up- per layers, provided the climatic conditions are not ex- tremely hard, so that it will yield crops without any manure for a long time, even with very superficial cultivation. The western prairies have the additional advantage of requiring hardly any expenses for clearing, since nature has cleared them herself. ^^'^ In less fertile districts of this kind a sur- plus is produced, not through the great fertility of the soil or the yield per acre, but through the large number of acres, which may be superficially cultivated, because this soil costs the cultivator little or nothing compared with older coun- tries. For instance, where share farming exists, as it does in certain parts of New York, Michigan, Canada, etc., there this condition is found. A family cultivates superficially, say, 100 acres, and although the product per acre is not large, the product of 100 acres yields a considerable surplus for sale. In addition to this cattle may be kept on natural pas- tures for almost nothing, without any artificial grass mead- ows. It is the quantity, not the quality of the soil, which decides the point here. The possibility of this superficial cultivation is naturally more or less rapidly exhausted, in a reverse ratio to the fertility of the new soil, and in a direct ratio to the export of its products. " And yet such a coun- try will yield excellent harvests, even of wheat; whoever skims the first cream off the soil, will be able to ship an ^^ [It is precisely the rapidly growing cultivation of such prairie or steppe dis- tricts which of late turns the renowned statement of Malthus, that the population " presses upon the means of subsistence," into ridicule, and has created the reverse of it in the complaints of the agrarians, who wail that agriculture and with it Germany will be ruined, unless the means of subsistence which are pressing upon the population are kept out by force. The cultivation of these steppes, prairies, pampas, llanos, etc., is only in its beginnings; its revolutionising effect on Euro- pean agriculture will, therefore, make itself felt later on even more than hitherta 2X 786 Capitalist Production.
abundant surplus of wheat to the market" (L. c, p. 224). In countries of older civilisation the property relations, the determination of the price of the uncultivated soil by that of the cultivated, etc., make such an extensive economy impos- sible.