the other hand, the landlord claims his share not exclusively in his capacity as the owner of the land, but also as a lender of capital. ^^^ A remainder of the old community in land, which had been preser\'ed after the transition to independent peasant economy, for instance in Poland and Roumania, served there as a subterfuge for accomplishing a transition to the lower forms of ground-rent. A portion of the land belongs to the individual farmers and is tilled independently by them. An- other portion is tilled collectively and creates a surplus prod- uct, which serves either for the payment of community ex- penses, or as a reserve in ease of crop failures, etc. These last two parts of the surplus product, and finally the whole surplus product together with the land, upon which it has been gro^\nQ, are gradually usurped by state officials and pri- vate individuals, and by this means the originally free peas- *'' Compare Buret, Tocqueville, Sismondi.
934 Capitalist Production.
ant proprietors, whose obligation to till this land collectively is maintained, are transformed into vassals, who are compelled to perform forced labor or pay rent in kind, while the usurp- ers are transformed into owners, not only of the stolen com- munity lands, but of the lands of the peasants themselves. /We need not dwell upon actual slave economy (which like- /Wise passes through a development from the patriarchal sys- tem, working pre-eminently for home use, to the plantation I system, working for the world market) nor upon that man- lagement of estates, under which the landlords carry on agri- culture for their own account, own all the instruments of production, and exploit the labor of free or unfree servants, who are paid in kind or in money. In this case, the land- lord and the owner of the instruments of production, and thus the direct exploiter of the laborers counted among these instruments of production, are one and the same person. Rent and profit likewise coincide then, there being no sepa- ration of the different forms of surplus-value. The entire surplus labor of the workers, which is here represented by the surplus product, is extracted from them directly by the owner of all the instruments of production, to which the land and, under the original form of slavery, the producers them- selves, belong. Where capitalist conceptions predominate^as they did upon the American plantations, this entire surplus- value is regarded as profit. In places where the capitalist mode' "of production does not exist, nor the conceptions cor- ■ responding to it have been transferred from capitalist coun- ' tries, it appears as rent. At any rate, this form does not present any difficulties. The income of the landlord, what- ever may be the name given to it, the available surplus prod- uct appropriated by him, is here the normal and predomi- nating form, under which the entire unpaid labor is directly appropriated, and the property in land forms the basis of this appropriation.
There is, furthermore, the small peasants' property. Here the farmer is the free owner of his land, which appears as I his principal instrument of production, the indispensable field ioi employment for his labor and his capital. No lease money Small Peasants' Property. 935 is paid under this form. Rent, therefore, does not appear as a separate form of surplus-value here, although in countries, in which capitalist industry in other lines is developed, it appears as a surplus profit by comparison with other lines of production. But it is a surplus profit which, like all the rest of the product of his labor, falls into the hands of the farmer himself.
This form of property in land requires that, as was the case under the earlier forms, the rural population should have a great preponderance over the city population, so that, while capitalist production may generally prevail, it is nev- ertheless but relatively little developed, concentration of cap- itals moves in narrow circles in the other lines of production, and dissipation of capitals predominates. Under these con- ditions, the greater part of the rural product will have to be consumed, as a direct means of subsistence, by the producers, the farmers themselves, and only the surplus above that will pass as commodities into the commerce with the cities. What- ever may be the manner, in which tlie average market price of the products of the soil is regulated in this case, the differ- ential rent, a surplus portion of the price of commodities from the superior or more favorably located lands, must evi- dently exist in this case just as it does under the capitalist mode of production. This differential rent would exist, even if this form should appear under social conditions, in which no general market price has as yet been developed. It ap- pears then in the spare surplus product. Only it flows into the pocket of the farmer, whose labor realises itself under favorable natural conditions. It is precisely under this form that the assumption is correct, as a rule, that no absolute rent exists, so that the worst soil does not pay any rent. For un- der this form the price of land enters as an element into the actual cost of production for the farmer, since in the course of the further development of this form the price of land may have been figured, for instance in the case of a division of an estate, at a certain money value, or, in view of the con- tinuous change in the ownership of the whole property, or of its parts, the land may have been bought by the tiller him- 9^6 Capitalist Production.
self, largely by taking up money on a mortgage. In this way the price of land, which is nothing else but a capitalized rent, is a pre-existing condition and rent seems to exist independ- ently of any differentiation in the fertility and location of the land. Absolute rent is conditioned either upon the real- ized surplus of the value of the product above its price of production, or a monopoly price exceeding the value of the product. But since agriculture is carried on here largely as an agriculture for direct subsistence, so that the land is an indispensable field of employment for the labor and capital of the majority of the population, the regulating market price of the product will come up to its value only under extraor- dinary circumstances. But its value will, as a rule, stand higher than its price of production on account of the predom- inance of the element of living labor, although this excess of its value over its price of production will be in its turn lim- ited by the low composition of tlie capital, even of that of the industries outside of agriculture, in countries with a predom- inance of small farmers' property. For the small farmer the limit of exploitation is not set by the average profit of the capital, if he is a small capitalist, nor by the necessity of making a rent, if he is a landowner. Nothing appears as an absolute limit for him, as a small ca23italist, but the wages which He pays to himself, after deducting his actual costs. So long as the price of the product covers these wages, he will cultivate his land, and will do so often down to the physical minimum of his wages. As for his capacity as a landlord, the barrier of property is eliminated in his case, since it can exert its influence only against a capital (including labor) separated from it, by erecting an obstacle against its invest- ment. It is true that interest on the price of land, which generally has to be paid to another, the holder of the mort- gage, also forms a barrier. But this interest can be paid out of that portion of the surplus labor, which would form the profit under capitalist conditions. The rent anticipated in the price of land, and in the interest paid for it, cannot be anything else but a portion of the capitalized surplus la- Small Peasants' Property. 937 Lor of tlie farmer, performed bj him beyond the labor indispensable for his subsistence, without realising this surplus labor in a part of the value of commodities equal to the entire average profit, and still less in a surplus profit, which would constitute a surplus above the surplus labor realised in the average profit. The rent may be a deduction from the aver- age profit, or even the only portion of it which is realised. In order that the small farmer may cultivate his land, or may buy land for cultivation, it is therefore not necessary, as it is under a normal capitalist production, that the market price of his products should rise high enough to allow him the aver- age profit, and still less a surplus above this average profit fixed in the form of a rent. Therefore it is not necessary that the market price should rise, either as high as the value or as high as the price of production of his product. Thi^ is one of the causes which keeps the price of cereals lower in""', countries with a predominance of small farmers than in coun- tries with a capitalist mode of production. One portion of the surplus labor of the farmers, who work under the least favorable conditions, is given to society without an equivalent and does not pass over into the regulation of the price of pro- duction or into the formation of values in general. This lower price is also a result of the poverty of the producers and by no means of the productivity of their labor.
This form of free farmers' property managing their own affairs, as the prevailing, normal, form constitutes on the one hand the economic foundation of society during the best times \ of classical antiquity, on the other hand it is found among J, modern nations as one of the forms arising from the dissolu- / tion of feudal^lftndlofdtsYn. In this way we meet the yeo-V' manry in England, the peasantry in Sweden, the farmers in France and Western Germany. We do not mention the col- onies here, since the independent farmer there develops un- der different conditions.
The free ownership of the selfemploying farmer is evi- dently the most normal form of landed property for small scale production, that is, for a mode of production, in which, 938 Capitalist Production.
the possession of the land is a prerequisite for the ownership of the product of his own labor by the laborer, and in which the agriculturist, whether he be a free owner or a vassal, al- ways has to produce his own means of subsistence independ- ently, as a single laborer with his family. The ownership of the soil is as necessary for the complete development of this mode of production as the ownership of the instrument is for the free development of handicraft production. This ownership forms here the basis for the development of per- sonal independence. It is a necessary stage of transition for the development of agriculture itself. The causes which bring about its downfall show its limitations. These causes are: Destruction of rural house industries, which form its normal supplement, as a result of the development of great in- dustries; a gradual deterioration and exhaustion of the soil subjected to this cultivation; usurpation, on the part of the great landlords, of the community lands, which form every- where the second supplement of small peasants' property and alone enable them to keep cattle; competition, either of plan- tation systems or of great agricultural enterprises carried out on a capitalist scale. Improvements of agriculture, which on the one hand bring about a fall in the prices of the prod- ucts of the soil, and on the other require greater investments and more diversified material conditions of production, also contribute towards this end, as they did in England during the first half of the 18th century.
Small peasants' property excludes by its very nature the development of the social powers of production of labor, the social forms of labor, the social concentration of capitals, cat- tle raising on a large scale, and a progressive application of science.
Usury and a system of taxation must impoverish it every- where. The expenditure of capital in the price of the land withdraws this capital from cultivation. An infinite dissipa- tion of means of production and an isolation of the produc- ers themselves go with it. Also an enormous waste of hu- man energy. A progressive deterioration of the conditions of production and a raising of the price of means of produc- Small Peasants' Property. 939 tion is a necessary law of small peasants' property. Fertile seasons are a misfortune for this mode of production. -^^^ One of the specific evils of small scale agriculture, when combined with the free ownership of the land, arises from the fact that the agriculturist invests a capital in the purchase of the land. (The same applies also to the form of transi- tion, in which the great landlord invests capital, first, for the purpose of buying land, and secondly, for the purpose of managing it as his own tenant). Owing to the changeable nature, which the land here assumes as a mere commodity, the changes of ownership increase,^"*^ so that the land, from the point of view of the farmer, passes again into the calcu- lation as a new investment of capital with every new genera- tion, every division of estates, in other words, that it becomes land bought by him. The price of land here forms an over- whelming element of the individual false cost of production, or of the cost price of the product for the individual pro- ducer.
The price of land is nothing but the capitalized, and there- fore anticipated, rent. If agriculture is carried on by cap- italist methods, so that the landlord receives only the rent, and the tenant pays nothing for the land except his annual rent, then it is evident that the capital invested by the owner of the land himself in the purchase of the land constitutes an interest-bearing investment of capital for him, but that it has nothing to do with the capital invested in agriculture itself. It forms neither a part of the fixed nor of the circulating cap- ital employed here;^^^ it merely secures for the buyer a title to the annual rent, but has nothing to do with the production **" See the speech of the king of France in Tooke.
"' See Mounier and Rubichon.
^" Dr. H. Maron (Extensive or Intensive?) [No further information given about this pamphlet]. He starts from the false assumption of those whom he combats. He assumes that the capital invested in the purchase of land is " first capital," and engages in a controversy about first capital and running capital that is, fixed and circulating capital. His wholly amateurish conceptions of capital, which may be excused in one who is not an economist in view of the condition of German political economy, conceal from him the fact that this capital is neither first nor running capital, any more than the capital, which some one may invest at the Stock Exchange in the purchase of consols or state bonds, and which represents a personal investment of capital for him, is " invested " in any productive line of industry.
940 Capitalist Production.
of the rent itself. For tbe buyer of land pays his capital out to the one who sells the land, and the seller relinquishes his ownership of the land for this consideration. This capital does not exist any more as the capital of the buyer after that. He has not got it any longer. Therefore it does not belong to the capital, which he can invest in any way in the land it- self. Whether he bought the land at a high or a low price, or whether he received it for nothing, does not alter anything in the capital invested by the tenant in his establishment, and does not make any change in the rent, but merely changes the question, whether it appears to him as interest or not as interest, or as a high or a low interest.
Take, for instance, the slavery system. The price paid for a slave is nothing but the anticipated and capitalized surplus- value or profit, which is to be ground out of him. But the capital paid for the purchase of a slave does not belong to the capital, by which profit, surplus labor, is extracted from him. On the contrary. It is capital, which the slave holder gives away, it is a deduction from the capital, which he has available for actual production. It has ceased to exist for him, just as the capital invested in the purchase of land has ceased to exist for agriculture. The best proof of this is the fact, that it does not come back into existence for the slave holder or the land owner, until he sells the slave or the land once more. Then the same condition of things holds good for the buyer. The fact that he has bought the slave does not enable him to exploit the slave without further ceremony. He is not able to do so until he invests some other capital in production by means of the slave.
The same capital does not exist twice. It does not exist one time in the hands of the seller, and a second time in the hands of the buyer of the land. It passes from the hands of the buyer to those of the seller, and that settles the matter. The buyer has then no longer any capital, but in its stead he has a piece of land. The fact that the rent produced by a real investment of capital in this land is figured by the new ovtmer of the land as interest on a capital, which he did not in- vest in the soil, but gave away as a purchase price for the Small Peasants' Property. 941 land, does not alter the economic nature of the factor land in the least, any more than the fact that some one may have l^aid 1,000 pounds sterling for 3% consols has anything to do with the capital, out of whose revenue the interest on the na- tional debt is paid.
In fact, the money expended in the purchase of land, like that spent for the purchase of national bonds, is merely cap- ital in itself, just as any amount of values is capital in itself on the basis of capitalist production. It is potential capital. The thing paid for the land, like that paid for national bonds or any other purchased commodity, is a sum of money. This is capital in itself, because it may be converted into capital. It depends upon the use to which the seller puts it, whether the money obtained by him really becomes capital or not. For the buyer it can never again perform the functions of capital, any more than any other money which he has finally spent. It figures in his calculations as interest-bearing capital, be- cause he considers the income, which he receives as rent from his land or as interest on his bonds, as interest on the money, which he paid for his title to this revenue. He cannot realise it as capital unless he sells his title again. If he does, then the new buyer assumes the same relationship in which the old one was, and the money spent in this transaction cannot transform itself into actual capital by any change of hands.
In the case of small property in land the illusion, that the land itself has value and may, therefore, pass as a capital into the price of production of the product, like a machine or raw materials, fortifies itself still more. But we have seen that the rent, and with it capitalised rent, or the price of land, can pass over into the price of the products of the soil in two cases only. The first case is that, in which the value of the products of the soil stands higher than their price of produc- tion and the market conditions enable the landlord to realise this difference; this condition of values and prices of produc- tion obtains, when the composition of the agricultural capital raises the value above the price of production. This agricul- tural capital has nothing to do with the capital invested in the purchase of the land. The seoorid oase is that in which g^2 Capitalist Production.
a monopoly price exists. And both cases occnr less under small peasants' property and small land ownership than un- der any other form, because production largely satisfies the producers' own wants in their case and is carried on inde- pendently of the regulation by the average rate of profit. Even where small peasants' economy is carried on upon leased land, the lease money comprises more than under any other conditions a portion of the profit and even a deduction from the wages; this money is then only a nominal rent, not a rent representing an independent category as compared to wages and profit.
The expenditure of money-capital for the purchase of land, then, is not an investment of agi'icultural capital. It is a proportionate deduction from the capital, which the small farmers can employ in their own sphere of production. It reduces to that extent the size of their means of production and thereby narrows the economic basis of their reproduction. It subjects the small farmer to the money lender's extortion, since credit, in the strict meaning of the term, occurs but rarely in this sphere. It is an obstacle to agriculture, even where such a purchase takes place in the case of large estates. In fact, it contradicts the capitalist mode of production, which is on the whole indifferent to the question whether the land- owner is in debt, no matter whether he inherited or bought his estate. The management of the leased estate itself is not altered in its nature, whether the landowner pockets the rent himself or whether he has to pay it over to the holder of his mortgage.
We have seen that the price of land is regulated by the rate of interest, if the ground-rent is a given magnitude. If the rate of interest is low, then the price of land is high, and vice versa. Normally, then, a high price of land and a low rate of interest would have to go hand in hand, so that if the farmer paid a high price for the land in consequence of a low rate of interest, the same low rate of interest should also secure for him his running capital on easy terms of credit. But in reality, things turn out differently under small peasants' property, as the prevailing form. In the first place, the Small Peasants' Property. 943 general laws of credit do not apply to the farmer, since these laws rest upon the capitalist as a producer. In the second place, where small peasants' property predominates — we are not speaking of colonies here — and the small peasant forms the foundation of the nation, the formation of capital, that is social reproduction, is relatively weak, and the formation of loanable money-capital, in the sense in which we have previously analyzed this term, is still weaker. For this is conditioned upon concentration and the existence of a class of rich and idle capitalists (Massie). In the third place, where the ownership of the land is a necessary condition for the existence of the greater part of the producers, as it is here, and an indispensable field of investment for their capital, the price of land is raised independently of the rate of interest, and often in an inverse ratio to it, by tlie pre- ponderance of the demand for land over its supply. If sold in small lots, the land in this case brings a far higher price than it does by its sale in large estates, because the number of small buyers is large and that of the large buyers small (Bandes Noires, Rubichonj Newman). For all these rea- sons the price of land rises here while the rate of interest is relatively high. The relatively low interest, which the farmer here derives from the capital invested in the purchase of land (Mounier), corresponds on the other hand to the high rate of interest exacted by usury, which he himself has to pay to his mortgage creditors. The Irish system shows the same thing, only in another form.