III. From Chapter Three. The Problem of Land Rent
...[22] land rent disappears. These higher grain prices — since the worker always consumes a certain amount of grain, however dear it may be, and therefore his nominal wage increases even when in reality it decreases — must be deducted from the profits of Messrs. the industrialists; Ricardo is wise enough to assume that wages cannot be depressed further. Hence, when there is a rise in the price of grain, there follows a reduction in profits and an increase in wages, without the latter increasing in reality. However, the increase in the price of grain raises the production costs of the industrialists, thereby making accumulation and competition more difficult for them, in a word, cripples the productive force of the country. Therefore the bad "exchange value", which falls in the form of land rent into the pockets of the landowners without any advantage (to the greatest detriment) to the country's productive force, must in one way or another be sacrificed to the general good — by free trade in grain, by shifting all taxes on to land rent, or by outright appropriation of land rent, i.e. of landed property, by the state (this conclusion has been drawn by, among others, [James] Mill, Hilditch and Cherbuliez).
Herr List, of course, did not dare to tell the German landed aristocracy of this frightening consequence of industrial productive force for landed property. Hence he berates Ricardo, who disclosed such unpleasant truths, and ascribes to him the opposite view, that of the physiocrats, according to which land rent is nothing but a proof of the natural productive force of land, and falsifies him.
List:
"In general, since Adam Smith, the School has been unfortunate in its researches into the nature of rent. Ricardo, and following him Mill, McCulloch and others, hold that rent is paid for the natural productivity inherent in plots of land. Ricardo based a whole system on this view.... Since he considered only English conditions, he was misled into the erroneous view that these English ploughed fields and meadows, for the apparently natural productivity of which such fine rent is paid at the present time, have been the very same ploughed fields and meadows at all times" (p. 360).
Ricardo: "If the surplus produce which land affords in the form of rent be an advantage, it is desirable that, every year, the machinery newly constructed should be less efficient than the old, as that would undoubtedly give a greater exchangeable value to the goods manufactured ... in the kingdom; and a rent would be paid to all those who possessed the most productive machinery" (Des principes de l'économie politique, etc., Paris, 1835, t. I, p. 77).
"Wealth increases most rapidly in those countries ... where through agricultural improvements, productions can be multiplied without any increase in the proportional quantity of labour, and where consequently the progress of rent is only gradual" (p. 81 et seq.).(1) Hence, in relation to the higher nobility, Herr List does not dare to keep up his shadow play with "productive forces". He wants to lure this nobility with "exchange values" and therefore slanders the School of Ricardo, who neither judges land rent from the standpoint of productive force, nor judges the latter from the standpoint of the modern large-scale factory system.
Thus Herr List is doubly a liar. Nevertheless we must not do Herr List an injustice in this matter. In one large Württemberg factory (Köchlin, if we are not mistaken) the King of Württemberg[3] himself participates, having invested a large sum in it. In the Württemberg factories, and to a greater or lesser extent in those of Baden as well, the landed nobility plays an important role by holding shares. Here, therefore, the nobility participates monetari-ly in the "manufacturing force", not as landowners but as bourgeois and manufacturers themselves, and(2)...
...[24] "productive forces" and the "continuity and permanence of production" of a whole generation arises — the disguised Communist List teaches this as well — and is therefore also a hereditary feature of the generation and not of Messrs. the industrialists (see, for example, Bray[111]).
In England, high land rents were ensured for the landlords only through ruining the tenant-farmers and reducing the farm labourers to the level (of real beggars) of an Irish poverty. All this in spite of the various Corn Laws, and apart from the fact that the landlords in receipt of rent were often compelled to allow the tenant-farmers a remission of one-third to one-half of the rent. Since 1815, three various Corn Laws have been passed to improve the position of the tenant-farmers and encourage them. During this period, five parliamentary committees were appointed to establish the existence of the distressed state of agriculture and to investigate its causes. The continual ruin of the tenant-farmers, on the one hand, in spite of the total (full) exploitation of the farm labourers and the utmost possible reduction of their wages, and, on the other hand, the frequent necessity for the landowners to forego part of the rent, are themselves proof that not even in England — in spite of all its manufacturing industry — have high land rents been produced. For, from the economic point of view, it cannot be regarded as land rent when part of the costs of production,[112] by means of agreements and other circumstances lying outside the sphere of economics, is drawn into the pocket of the landlord instead of that of the tenant-farmer. If the landowner himself cultivated his land, he would certainly take care not to enter part of the ordinary profit of working capital under the heading "land rent".
Writers of the 16th, 17th and even the first two-thirds of the 18th century, still regarded the export of grain by England as the main source of its wealth. The old English industry — the main branch of which was the woollen industry, and the less important branches of which processed mostly materials supplied by the main branch itself — was wholly subordinated to agriculture. Its chief raw material was the product of English agriculture. As a matter of course, therefore, this industry promoted agriculture. Later, when the factory system proper developed, already in a short space of time the necessity for customs duties on corn began to be felt. But they remained nominal. The rapid growth of the population, the abundance of fertile land which had yet to be made cultivable, the inventions, at first, of course, raised also the level of agriculture. It especially profited from the war against Napoleon, which established a regular system of prohibition for it. But 1815 revealed how little the "productive force" of agriculture had really increased. A general outcry arose among landowners and tenant-farmers, and the present Corn Laws were enacted.[113] It is in the nature of modern factory industry, firstly, to estrange industry from the native soil since it processes mainly raw materials from abroad and bases itself on foreign trade. It is in the nature of this industry [secondly] to cause the population to grow in a ratio which, under the system of private property, does not correspond to the exploitation of the soil. It is furthermore in its nature, if it gives rise to Corn Laws, as it has always done in Europe up to now, to convert the peasants into the very poorest proletarians through high rents and factory methods of exploiting landed property. If, on the other hand, it succeeds in preventing the passing of Corn Laws, it puts a mass of land out of cultivation, subjects the price of grain to external contingencies, and completely alienates the country [entäussert das Land völlig] by making its most essential means of subsistence dependent on trade, which undermines landed property as an independent source of property. This last feature is the aim of the Anti-Corn-Law League in England and the anti-rent movement in North America, for land rent is the economic expression of landed property. Therefore the Tories continually draw attention to the danger of England being made dependent for its means of subsistence on, for example, Russia.
Large-scale factory industry — of course, countries like North America which have a huge amount of land still to be brought under cultivation (and protective duties by no means increase the amount of land) do not count here — certainly has a tendency to paralyse the productive force of the soil, as soon as its exploitation has reached a certain level, just as, on the other hand, the conduct of agriculture on factory lines has a tendency to oust people and to convert all the land — of course, within certain limits — into pasture, so that cattle take the place of people.
Ricardo's theory of land rent, in a few words, amounts to the following:
Land rent adds nothing to the productivity of land. On the contrary, rising land rent is proof that the productive force of land is falling. It is in fact determined by the relation of the area of land suitable for cultivation to the number of the population and to the level of civilisation in general. The price of grain is determined by the cost of production on the least fertile land that has to be cultivated because of the needs of the population. If land of a poorer quality has to be resorted to, or if amounts of capital have to be applied with a lesser yield to the same piece of land, then the owner of the most fertile land sells his product as dearly as the peasant who has the worst. He pockets the difference between the cost of production on the best land and that on the most infertile. Thus, the less productive the land that is put into cultivation, or the less the yield from second and third amounts of capital applied to the same piece of land, in short, the more the relative productive force of the land decreases, the higher the land rent rises. The land made fruitful everywhere....[3]
Endnotes
[111] The reference is to List's argument, in Chapter 24 of his book, about the importance of "continuity" and "uninlerruptedness of production" in the development of factory industry, the preservation and perfection of its technical means and the production skills of the workers. In comparing these arguments with those of J. F. Bray, Marx had in mind the latter's book, Labour's Wrongs and Labour's Remedy; or the Age of Might and the Age of Right, Leeds, 1839, which proved the injustice of the hereditary property of capitalists and landowners as non-productive and parasitic classes. In The Poverty of Philosophy (1847) Marx characterised Bray's views as communist (see present edition, Vol. 6).
[112] The term costs of production ("Produktionskosten") is used by Marx in the sense of value of the product.
[113] See Note 5.
[3] Here and elsewhere Engels quotes Reichardt's reviews of C. Briiggemann's book, Preussens Beruf in der deutschen Staats-Entwickelung, und die nächsten Bedingungen zu seiner Erfüllung, Berlin, 1843 and A. Benda's Katechismus für wahlberechtigte Bürger in Preussen, Berlin, 1843. Both reviews were published in the Allgemeine Literatur-Zeitung, Heft VI, May 1844.