If this minimum is altered in consequence of successive in- vestments of capital which are accompanied by improvements, it is done gradually. So long as a certain number of acres, say, of A, do not receive this additional first capital, a rent is created upon the better cultivated portions of A by the un- altered price of production, and the rent of all superior soils, such as B, C, D, is raised. But as soon as the new method of cultivation has become general enough to be the normal one, the price of production falls; the rent of the superior soils declines then, and that portion of the soil A, which does not enjoy the normal running capital, must sell its product below its individual price of production, and therefore below the average profit.
In the case of a falling price of production this happens also, even assuming the productivity of the additional cap- ital to be decreasing, as soon as the required total product is supplied in consequence of increased investments of capital by the superior classes of soil, so that the running capital is withdrawn, say, from A and A does not compete any longer in the production of this one staple, say wheat. The quan- Differential Kent II. Second Case. 825 tity of capital, wliich is now required on an average as an investment upon the new regulating soil, B, is now consid- ered the normal one; and when we speak of the different fer- tility of the soils, it is understood that this new normal quantity of capital is employed per acre.
On the other hand, it is evident that this average invest- ment of capital, for instance 8 pounds sterling per acre in England before 1848, and 12 pounds sterling after that year, will form the standard in the making of leases for land. For any capitalist farmer spending more than that the surplus profit does not assume the form of rent during the time of his contract. Whether this takes place after the expiration of his contract, will depend upon the competition of the cap- italist farmers, who are in a position to make the same extra advance. We are not speaking here of such permanent im- provements of the soil as continue to guarantee an increased product with the same or Avith even a decreasing investment of capital. Such improvements, although products of cap- ital, have the same effect as the natural differences of quality of the land.
We see, then, that an element must be considered in the case of differential rent No. II, which does not appear in dif- ferential rent No. I as such, since this last rent may continue independently of any change in the normal investment of capital per acre. It is on one hand the obliteration of the results of different investments of capital upon the regulating soil A, the product of which now appears simply as a normal average product per acre. It is on the other hand the cliange in the average minimum, or in the average magnitude of in- vested capital per acre, so that this change presents itself as a quality of the soil. It is finally the difference in the man- ner of transforming surplus profit into the form of rent.
Table VI shows furthermore, compared with Tables I and II, that the grain rent has increased more than double as com- pared to I, and by li quarters as compared to II; while the money rent has doubled as compared to I, but has not changed as compared with II. It would have increased considerably, if (other conditions remaining the same) the additional capital Capitalist Production.
had been placed more upon the superior soils, or if the effects of the addition of capital to A had been less appreciable, so that the regulating average price of the quarter from A had stood higher.
If the increase of productivity by means of additional cap- ital should produce different results upon different soils, it would cause a change in their differential rents.
At any rate we have demonstrated, that the rent per acre, for instance with a doubled capital, may not only be doubled, but more than doubled, while the price of production is fall- ing in consequence of an increased rate of productivity of the additional capitals (as soon as the productivity grows at a greater rate than the advance of capital). But it may also fall, if the price of production should fall much lower as a result of a more rapid increase of productivity upon the soil A.
Let us assume that the additional investments of capital, for instance upon B and C, do not increase the productivity as much as they do upon A, so that the proportional differ- ences would decrease for B and C, and the increase of the product did not make up for the fall in price, then, compared to Table II, the rent upon D would rise, and would fall upon B and C: Table VI a.
Soils Acres Capital P.St.
Profit Product per Acre quarters Selling Price P St.
Yield P.St.
Grain Rent Qrs.
Money Rent P.St.
A B C D 1 1 1 1 1 1 1 1 6 12 24 0 'A 4 12 0 18 Totals 4 20 Finally, the money rent would rise, if more additional cap- ital were invested upon the superior soils under the same pro- portional increase of fertility tlian upon A, or if the additional investments of capital upon the superior soils worked with an increasing rate of productivity. In both cases the differ- ences would increase.
The money rent falls, when the improvement due to addi- Differential Rent II. Second Case. 827 tional investments of capital which reduces the differences all over, or in part, affects A more than B and C. It falls so much the more, the less the productivity of the superior soils increases. It depends upon the proportion of inequality in the effects, whether the grain rent shall rise, fall, or remain stationary.
The money rent rises, and so does the grain rent, assuming the proportional difference in the additional fertility of the different soils to remain unaltered, when more capital is added to the rent paying soils than to the rentless soil A, and more capital placed upon the soils with high than those with low rents, or when the fertility, assuming the same additional capital to be used, increases more upon the better and best soils than upon A, and at that in proportion as this increase in fertility is greater upon the better classes of soil than upon the lesser ones.
But under all circumstances the rent rises relatively, when the increased productive power is a result of an addition of capital, and not merely a result of increased fertility with an unaltered investment of capital. This is the absolute point of view, which shows that here, as in former cases, the rent and the increased rent per acre (as in the case of differential rent I upon the entire cultivated area — the amount of the average rental) are a result of an increased investment of capital in the soil, no matter whether this capital does its work with a constant rate of productivity at constant or decreasing prices, or with a decreasing rate of productivity at constant or falling prices, or with an increasing rate of pro- ductivity at falling prices. For our assumption of a constant price with a constant, falling, or rising rate of productivity of the additional capitals, and of a falling price with a con- stant, falling, or rising rate of productivity, resolves itself into a constant rate of productivity of the additional capital at constant or falling prices, a falling rate of productivity at constant or falling prices, and a rising rate of productiv- ity at constant and falling prices. Although the rent may remain stationary or may fall in all these cases, it would fall more, if the additional investment of capital, other circum- 828 Capitalist Production.
stances remaining the same; were not a prerequisite of an increased fertility. An addition of capital, then, is always the cause of the relative magnitude of this rent, although it may have decreased absolutely.
CHAPTER XLIII.
DIFFEEENTIAL BENT NO. II. THIRD CASE: RISING PRICE OF PRODUCTION.
[A RISING price of production presupposes that the produc- tivity of the least productive quality of land, which pays no rent, decreases. The regulating price of production cannot rise above 3 pounds sterling per quarter, unless the 2^ pounds sterling invested in soil A produce less than one quarter, or the 5 pounds sterling less than two quarters, or unless, even inferior soil than A has to be taken under cultivation.
If the productivity of the second investment of capital should remain the same, this would be possible only in the case that the productivity of the first investment of capital would have decreased. This case occurs often enough. It happens, for instance, when the top soil, exhausted and superficially plowed, produces inferior crops with the old style of cultiva- tion, and when the subsoil, thrown up by deeper plowing, produces better crops than formerly under a more rational treatment. But strictly speaking this special case does not belong here. The falling off in the productivity of the first investment of 2| pounds sterling implies for the superior soils, even when conditions with them should be analogous, a decrease of the differential rent 'No. I; but here we are con- sidering only differential rent 'No. II. Since the present special case cannot occur without the previous existence of differential rent No. II, but represents in fact a reaction of a certain modification of differential rent Xo. I upon Xo. II, we will give an illustration of it.
Differential Rent II. Third Case. TABLE VII.
.sol cd (U k.
0^ A B C D 1 1 1 1 1 1 1 1 6 6 6 6 6 12 18 24 0 IK 5% 0 6 12 18 36 0 T'tl 20 60 lOM Av'rage The money rent, and the yield in money, are the same as in Table II. The increased regulating price of production makes up exactly for what has been lost in the quantity of the product; since both of them vary in an inverse proportion, it is a matter of course that the product of both will remain the same.
In the above case we had assumed that the productive power of the second investment of capital was higher than the origi- nal productivity of the first investment. The matter remains the same, if we assume that the second investment has only the same productivity as that of the first, as shown in the following: TABLE VIII.
Product Qrs.
The third case shows itself in its pure form only when the second investment of capital declines in its productivity while that of the first remains constant, as assumed Qverv- Capitalist Production.
where in the first and second cases. Here differential rent ISTo. I is not touched, the change affects only that part which arises from differential rent ]^o. II. We give below two il- lustrations: In the first we assume that the productivity of the second investment of capital has been reduced by one-half, in the second by three-fourths.
TABLE IX.
'o CO < Invested Capital P.St.
Oh a o£0h UOl, Product Qrs.
TABLE X.
is" Grain Rent Qrs.
So; iic re ^ A B C D 1 1 1 1 6 6 6 6 6 12 18 24 0 0 6 12 18 0 T'tl 20 24 60 36 Av'rasje In this table, likewise, the total yield, the money rental, and the rate of rent remain the same as in Tables II, VII and Vril, because the product and the selling price have once more varied in an inverse proportion, while the invested cap- ital has remained the same.
But how do matters stand in the other case, which is pos- sible with a rising price of production, namely in the case that a soil, which so far was too poor to be cultivated, is taken under cultivation?
Differential Rent II. Third Case.
Let us suppose that such a soil, which we will designate by a, is entering into competition. Then the hitherto rentless soil A would yield a rent, and the foregoing Tables VII, VIII and X would assume the following forms; TABLE Vila.
CL, c (JPh Product Qrs.
1 < Capital P.St.
0 Product Qrs.
0 < Capital P.St.
Product Qrs.
Selling Prve P.St.
Yield P.St.
Grain Rent Qrs.
Money Rent CO 0 c a A B C D 5 6 6 6 6 6 5^ 6 6% 20 0 % 0 % 7^ 14 0 % T'ls 30 im 8 By the interpolation of soil a there arises a new differential rent No. I. Upon this new basis differential rent No. II likewise develops in an altered form. The soil a has a differ- ent fertility in every one of the above three Tables. The 832 Capitalist Production.
series of successively increasing productivities begins only with soil A. The series of rising rents corresponds to this. The rent of the least rent producing soil forms a constant magnitude, which is simply added to all higher rents; only after the deduction of this constant magnitude does the series of differences clearly appear among the higher rents, and so does its parallelism with the succession of fertilities of the various kinds of soil. In all Tables, the fertilities from A to D have a proportion of 1: 2: 3: 4, and the rents are cor- respondingly in Vila asl:l + 7:l + 2XT:l + 3XT, in Villa as 11: 11 + 7i: li: 2 X 71: 11 + 3 X 71, and in Xa as f: § + 6t: § + 2 X 6f: § + 3 X 6|. In brief, if the rent of A = n, and the rent of the soil of next higher fer- tility = n + m, then the series is as n: n -f- m ^ n + 2m: n [Since the foregoing third case had not been elaborated in the manuscrijit, only its title being there, the editor had to supplement the work as he did above. It remains now to draw the general conclusions following from the entire fore- going analysis of differential rent in its three principal cases and nine subcases. The illustrations chosen in the manu- script do not suit this purpose very well. In the first place, they compare pieces of land, equal portions of which have yields at the ratio of 1:2:3:4. These are differences, which strongly exaggerate and which lead to utterly forced results in the further development of the assumptions and calculations made upon this basis. In the second place, these proportions create a wrong impression. If degrees of fertility of the proportion 1: 2: 3: 4, etc., produce rents in a series of 0:1:2:3:4, etc., one feels tempted to derive the second series from the first and to explain the duplication, triplica- tion, etc., of the rents out of the duplication, triplication, etc., of the total yields. But this would be wholly incorrect. Tlic rents show proportions like that of 0: 1: 2: 3: 4 even when the degrees of fertility are proportioned as n: n -j- 1 * n + Differential Rent If. Third Case. 833 2: n -f- 3: n -f- 4; the rents are not proportioned as the de- grees of fertility, they are rather proportioned as the differ- ences of fertility, beginning with the rentless soil as a zero point.
The tables of the original had to be given for the illustra- tion of the text. But in order to obtain a suitable basis for the following results of our analysis, I present below a new series of tables, in which the yields are indicated in bushels (I quarter or 36.35 liters) and shillings.
The first of these tables, Table XI, corresponds to the former Table I. It shows the yields and rents for five qual- ities of soil, A to E, with a first investment of a capital of 50 shillings, which makes a profit of 10 shillings, so that the total cost of production per acre is 60 shillings. The yields in grain are placed at low figures, 10, 12, 14, 16, 18 bushels per acre. The resulting regulating price of production is 6 shillings per bushel.
The following 13 tables correspond to the three cases of differential rent ISTo. II, with an additional Investment of a capital of 50 shillings per acre upon the same soil, with a constant, falling and rising price of production. Every one of these cases, again, is represented as it turns out, 1) with a constant, 2) with a falling, 3) with a rising productivity of the second investment of capital as compared to the first. This results furthermore in a few other cases, which are pre- sented separately.
In case I, with a constant price of production, we have: Variant ISTo. 1: The productivity of the second investment of capital remains the same (Table XII.) Variant Xo. 2: The productivity declines. This can take place only when soil A receives no second investment of capital, and it may take place in such a way that a) the soil B likewise produces no rent (Table XIII), or, b) the soil B does not lose all rent (Table XIV). Variant Xo. 3: The productivity Increases. (Table XV.)
This case likewise excludes a second investment of capital upon soil A.
3A 834 Capitalist Production.
In case II, with a falling price of production, we have: Variant Xo. 1: The productivity of the second investment of capital remains the same (Table XVI). Variant 'No. 2: The productivity declines (Table XVII). These two variants are conditioned upon the throw- ing of soil A out of competition, and soil B producing no rent and regulating the price of production. Variant Xo. 3: The productivity increases (Table XVIII). In this case the soil A remains the regulator. In case III, with a rising price of production, two even- tualities are possible; soil A may remain without rent and regulate the price, or, an inferior class of soil than A enters into competition and regulates the price, in which case A pro- duces a rent.
First eventuality: Soil A remains the regulator. Variant Xo. 1: The productivity of the second investment remains the same (Table XIX). This will happen under the conditions assumed by us only when the productivity of the first investment decreases. Variant Xo. 2: The productivity of the second investment decreases (Table XX). This does not exclude the possibility that the first investment may retain the same productivity. Variant Xo. 3: The productivity of the second investment (Table XIX) increases; this, again, presupposes a falling productivity of the first investment. Second eventuality: An inferior quality of soil (designated as a) enters into competition; soil A yields a rent. Variant Xo. 1: The productivity of the second investment remains the same (Table XXII). Variant Xo. 2: The productivity declines (Table XXIII). Variant Xo. 3: The productivity increases (Table XXIV). These three variants appear under the general conditions of the problem and require no further remarks. We herewith produce the Tables.
Diiferential Rent II. Third Case.
Table XL Soils Cost of Product Yield Rent Increase of Production Bushels a Shillings Shillings Rent ^ A 60 10 6 60 0 0 B 60 12 6 72 12 12 C 60 14 6 84 24 D 60 16 6 96 36 E 60 18 6 48 Total When a second investment is placed upon the same soil, we have the following eventualities: First Case: The Price of production remains unaltered. Variant Ko. 1: The productivity of the second investment remains the same.
Table Xri.
Soils Cost of Production Product Bushels Oh c Yield Shillings Rent Shillings Increase of Rent A B C D E 6 6 6 6 6 0 24 48 72 96 0 24 Total Variant No. 2: The productivity of the second investment of capital declines; soil A receives no second invest- ment, a) If soil B ceases to yield a rent.
Table Xin.
Soils Cost of Production Product Bushels Selling Price Shillings Yield Shillings Rent Shillings Increase of Rent A B C D E 60 10 6 6 6 6 6 60 ISO 0 0 20 40 60 0 0 20 Total b) If soil B does not lose all the rent.
Capitalist Productio n. Table XIV.
Soils Cost of Production Product Bushels So Si c be Increase of Rent A B C D E 60 10 6 6 6 6 6 60 0 6 27 48 69 0 6 Total Variant No. 3: The productivity of the second investment of capital increases; no second investment upon soil A.
Table XV.
Soils Cost of Production Product Bushels Selling Price Shillings ill Rent Increase of Rent A B C D E 60 10 6 6 6 6 6 60 0 42 69 96 0 42 Total Second Case: The price of production declines. Variant No. 1: The productivity of the second investment of capital remains the same. Soil A is thrown out of competition, soil B loses its rent.
Table XVI.
Soils Cost of Production Shillings Product Bushels Selling Price Yield Shillings Rent Shillings Increase of Rent B C D E 5 5 5 5 0 20 40 60 0 20 Total Variant No. 2: The productivity of the second investment of capital declines; soil A is thrown out of competi- tion, soil B loses its rent.
Differential Rent II. Third Case. Table XVII.
Soils Cost of Production Shillings Product Bushels Selling Price Yield Shillings Rent Shillings Increase of Rent B C D E 0 20 40 60 0 20 Total Variant No. 3: The productivity of the second investment of capital increases; soil A remains in the competi- tion. Soil B produces rent.
Table XVIII.
Soils Cost of Production Shillings Product Bushels Selling Price Shillings Yield Shillings Rent Shillings Increase of Rent A B C D E 0 24 48 72 96 0 24 Total Third Case: The price of production rises.
A) If soil A remains without rent and continues to reg- ulate the price. Variant No. 1: The productivity of the second investment of capital remains the same; this implies a decreasing productivity of the first investment of capital.
Table XIX.
Soils Cost of Production Shillings Product Bushels Selling Price Yield Shillings Rent Shillings Increase of Rent A B C D E 0 24 48 72 96 0 24 Total Variant No. 2: The productivity of the second investment of capital decreases; this does not exclude a constant productivity of the first investment.
Capitalist Production. Table XX.
Soils Cost of Production Shillings Product Bushels Selling Price Shillings Yield Shillings Rent Shillings Increase of Rent A B C D E 8 8 8 8 8 0 24 48 72 96 0 24 Total Variant i^o. 3: The productivity of the second investment of capital rises, which implies, under the assumed con- ditions, a declining productivity of the first invest- ment.
Table XXI.
Soils Cost of Production Shillings Product Bushels Selling Price Yield- Shillings Rent Shillings Increase of Rent A B C D E 0 24 48 72 96 0 24 Total B) If an inferior soil (designated as a) becomes the regulator of prices and soil A produces a rent. This admits of a constant productivity of the second invest- ment in the case of all variants. Variant ISTo. 1: The productivity of the second investment of capital remains the same.
Tahle XXII.
Soils Cost of Production Shillings Product Bushels Selling Price Yield Shillings Rent Shillings Increase of Rent a A B C D E 16 7^ 7^ 7K 0 30 60 90 0 30 Total Variant Xo. 2: The productivity of the second investment of capital declines.
Differential Rent II. Third Case. Table XXIII.
Soils Cost of Production Shillings Product Bushels Selling Price Yield Shillings Rent Shillings Increase of Rent a A B C D E 15 8 8 8 8 8 8 0 20 48 76 0 20 Total Variant No. 3: The productivity of the second investment increases.
Tahle XXIV.
Soils Cost of Production Shillings Product Bushels Selling Price Yield Shillings Rent Shillings Increase of Rent a A B C D E 16 1% 0 0 Total These Tables lead to the following conclusions: In the first place they show that the series of rents main- tains the same proportions as the series of degrees of fertility, taking the rentless regulating soil as the zero point. Not the absolute yields, but only the differences in yield are the determining elements of rent. Whether the different kinds of soil produce 1, 2, 3, 4, 5 bushels, or whether they produce 11, 12, 13, 14, 15 bushels of yield per acre, the rents are in both cases seriatim 0, 1, 2, 3, 4, bushels, or money to that amount.
But the result of our analysis is far more important with respect to the total yields of rent with a repeated investment of capital upon the same soil.
In five cases out of the analysed thirteen the total amount of the rents is doubled with the duplication of the investment of capital; instead of 10 times 12 shillings it becomes 10 times 24 shillings, or 240 shillings. These cases are: 840 Capitalist Production.
Case I, constant price, Variant No. 1, the increase of pro- ductivity remaining the same (Table XII).
Case II, falling price, Variant Xo. Ill: increasing exj^an- sion of production (Table XVIII).
Case III, increasing price, first eventuality, where soil A remains the regulator, in all three Variants (Tables XIX, XX, and XXI).
In four cases the rent increases by more than double, namely: Case I, Variant Xo, III, constant price, increasing expan- sion of production (Table XV). The amount of the rent rises to 330 shillings.
Case III, second eventuality, where soil A produces a rent, in all three variants (Table XXII, rent 15 times 30 = 450 shillings; Table XXIII, rent 5 times 20 plus 10 times 28 = 380 shillings; Table XXIV, rent 5 times 15 plus 15 times 33^ = 581i shillings).
In one case the rent rises, but not to double the amount of the rent produced by the first investment of capital: Case I, constant price. Variant II: falling productivity of the second investment, under conditions, in which B does not wholly lose its rent (Table XIV, rent 4 times 6 plus 6 times Finally, it is only in three cases that the total rent, with a second investment upon all kinds of soil, remains at the same level as with the first investment (Table XI); these are the cases, in which the soil A is thrown out of competition and soil B becomes the regulator and pays no rent. In this case the rent of B is not only lost, but is also deducted from every succeeding link of the rent series. This is the basis of the above result. We mean the following cases: Case I, Variant II, when the conditions are such that soil A is eliminated (Table XIII). The sum of the rent is six times twenty, or 10 X 12 = 120, as in Table XI.
Case II, Variants I and II. Here soil A is necessarily eliminated, according to the assumption (Tables XVI and XVII) and the sum of the rent is again 6 X 20 = 10 X 12 = 120 shillings.
Differential Rent 11. Third Case. 841 This is to say: In the great majority of all possible cases the rent rises, both per acre of the rent paying soils and for the total amount, as a result of an increased investment of capital upon the land. Only in three cases out of the thirteen analysed cases the total amount of the rent remains unaltered. These are the cases, in which the lowest quality of soil, which hitherto paid no rent, drops out of competition and the next higher one takes its place and loses its rent. But even in these cases do the rents upon the superior soils rise in com- parison to the rents due to the first investment. When the rent of C falls from 24 to 20, then that of D and E rises from 36 and 48 respectively to 40 and 60 shillings.
A fall of the total rents below the level of the first invest- ment of capital (Table XI) would be possible only in the case that soil B as well as soil A would drop out of competi- tion and soil C become regulating and rentless.
The more capital is applied to a certain soil, and the higher the development of agriculture and of civilization in general is in a certain country, the more do the rents rise per acre and per total amount of rental, and the more immense be- comes the tribute paid by society to the great land owners in the form of surplus profits — so long as the different soils taken under cultivation remain capable of competition.
This law explains the wonderful vitality of the class of great landlords. No social class lives so sumptuously, no other claims like it a right to a traditional luxury in keeping with its " estate," regardless of where the money for that purpose may come from, no other class piles debt upon debt as lightheartedly as it. And yet it always lands on its feet — thanks to the capital invested by other people in the soil, whereby the landlord collects a rent, which stand in no pro- portion to the profits to be drawn out of the soil by the capi- talist.
However, the same law also explains, why the vitality of the great landlord is gradually exhausted.
When the English corn taxes were abolished in 1846, the English manufacturers believed that they had transformed the landowning aristocracy into paupers. Instead of that they 842 Capitalist Production.
became richer than ever. How did that happen? Very sim- ple. In the first place, the renting capitalists were now com- pelled bv contract to invest 12 pounds sterling annually in- stead of 8 ponnds, as heretofore. And in the second place, the landlords, being strongly represented also in the Lower House, granted to themselves a heavy subsidy for the drainage and other permanent improvements of their lands. Since no total displacement of the worst soil took place, but at the worst a temporary employment of such soil for other pur- poses, the rents rose in proportion to the increased investment of capital, and the landed aristocracy were better off than ever before.