Now Back to Rodbertus, Definitively and for the Last Time
"It" (Rodbertus' theory of rent) "explains ... all phenomena of wages and rent, etc. ... by a division of the labour product, which necessarily occurs if two prerequisites, adequate productivity of labour and property in land and capital, are given. It explains that the adequate productivity of labour alone constitutes the economic possibility of such a division, in that this productivity gives to the value of the product so much actual content that in addition other people who do not work, can also live from it. And it explains that landed property and capital property alone constitute the legal reality of such a division, in that it forces the workers to share their product with the non-working proprietors of land and capital and, what is more, in such a proportion that they, the workers, only get so much of it as to enable them to live" (Rodbertus, I.e., [pp.] 156-57).
Adam Smith sets forth this problem in two ways. Division of the product of labour where this is regarded as given and he is in fact concerned with the distribution of use value. This is also Mr. Rodbertus' conception. It is also to be found with Ricardo who is all the more to be reproached on this account because he does not merely confine himself to general phrases but seriously tries to determine the value by labour time. This conception is plus ou moins, mutatis mutandis," applicable to all modes of production where the workers a n d the owners of the objective conditions of labour form different classes.
Smith's second conception, on the other hand, is characteristic of the capitalist mode of production. Hence it alone is a theoretically fruitful formula. For Smith here conceives of profit and rent as springing from the surplus labour which the worker adds to the object of labour, apart from that portion of labour by which he only reproduces his own wage. This is the only correct standpoint where production rests solely on exchange value. This concept comprises the process of development, whereas the first concept presupposes that labour time is constant.
With Ricardo the one-sidedness arises also from the fact that in general he wants to show that the various economic categories or relationships do not contradict the theory of value, instead of on the contrary developing them together with their apparent contradictions out of this basis or presenting the development of this basis itself.
[XI-516] "You a know, that all economists, already from Adam Smith onwards, split up the value of the product into wages, ground-rent and capital gain and that therefore the idea of basing the incomes of the different classes and particularly also portions of rent on a division of the product is nothing new." (CERTAINLY NOT!) "Only the economists immediately go astray. All of them — not even excepting the Ricardian School—first of all commit the error of not regarding the whole product, the entire wealth, the total national product as the unit in which the workers, the landowners and the capitalists participate. On the contrary they regard the division of the raw product as a particular division in which three participants share, and the division of the manufactured product again as a particular division in which only two participants share. So these systems consider that the mere raw product and the mere manufactured product, each in itself, is a special kind of wealth which constitutes income" (p. 162).
First of all, by breaking down the "whole value of the product into wages, ground-rent and capital gain" and thus forgetting about constant capital which also forms a part of value, Adam Smith has in fact led "astray" all the later economists, including Ricardo and including Mr. Rodbertus.b As my exposition has shown, the lack of this differentiation made any scientific presentation quite impossible.' In this respect the Physiocrats were further advanced.d Their "avances primitives and annuelles"e are defined as a part of the value of the annual product or as a part of the annual product itself, which is not resolved into wages, profit or rent, just as little for the nation as for the individual. According to the Physiocrats, the raw material of the AGRICULTURISTS replaces the advances of the sterile class (the transformation of this raw material into machines of course devolves on the sterile class), while, on the other hand, the AGRICULTURISTS replace a part of their own advances (seeds, cattle for breeding and draught animals, fertiliser, etc.) from their product and get a part, machinery, etc., replaced by the sterile class in exchange for raw material.
Secondly Mr. Rodbertus errs in that he identifies division of value with division of product. The "wealth which constitutes income" has nothing directly to do with this division of the value of the product. That the portions of value which accrue, for instance, to the producers of yarn, and which are represented in certain quantities of gold, exist as agricultural and manufactured products of all kinds is equally well known to the economists as to Rodbertus. This is taken for granted because commodities are produced and not products for the IMMEDIATE CONSUMPTION of the producers themselves. Since the value which becomes available for distribution, i.e., the part of value which forms revenue, is created within each individual sphere of production, independently of the others — although, on account of the division of labour, it presupposes the others — Rodbertus takes a step backward and creates confusion, by not examining this creation of value on its own, but confusing it right from the start by asking what share of the available total product of the nation these component parts secure for their owners. With Rodbertus, division of the value of the product immediately becomes division of use values. Because he foists this confusion upon the other economists, there arises the need for his corrective, i.e., the consideration of manufactured and raw products en bloc—a mode of procedure which is irrelevant to the creation of value, and hence wrong if it is to explain the latter.
The only participants in the value of the manufactured product, in so far as it comprises revenue and in so far as the manufacturer does not pay a rent, be it for land on which the buildings stand or for waterfalls, etc., are the capitalist and the wage labourer. The value of the agricultural produce is generally divided between three. This Mr. Rodbertus also admits. The manner in which he explains this phenomenon does not in any way alter this FACT. It is entirely in accord with the standpoint of capitalist production that the other economists, especially Ricardo, start from a division into two, between capitalist and wage labourer, and only bring in the landowner who draws rent at a later stage, as a special SUPERFETATION. Capitalist production is based on the antithesis of two [XI-517] factors, objectified labour and living labour. Capitalist and wage labourer are the sole functionaries and factors of production whose relationship and confrontation arise from the nature of the capitalist mode of production.
The circumstances under which the capitalist has in turn to share a part of the SURPLUS labour or SURPLUS VALUE,which he has captured, with a third, non-working person, are only of secondary importance. It is also a FACT of production that, after the part of the value which is equal to constant capital is deducted, the entire SURPLUS value passes straight from the hands of the worker to those of the capitalist, with the exception of that part of the value of the product which is paid out as wages. The capitalist confronts the worker as the direct owner of the entire SURPLUS value, in whatever manner he may later be sharing it with the money-lending capitalist, landowner, etc. As James Mill observes,[3] production could therefore continue undisturbed if the landowner who draws rent disappeared and the State took his place. He — the private landowner — is not a necessary agent for capitalist production, although it does require that the land should belong to someone, so long as it is not the worker, but, for instance, the State. Far from being an error on the part of Ricardo, etc., this reduction of the classes participating directly in production, hence also in the value produced and then in the products in which this value is embodied, to capitalists and wage labourers, and the exclusion of the landowners (who only enter post festum, as a result of conditions of ownership of natural forces that have not grown out of the capitalist mode of production but have been passed on to it), is rooted in the nature of the capitalist mode of production—as distinct from the feudal, ancient, etc. This reduction is an adequate theoretical expression of the capitalist mode of production, and reveals its differentia specifica. Mr. Rodbertus is still too much of an old Prussian "landed proprietor" to understand this. Furthermore, it can only be grasped and become self-evident when the capitalist has seized agriculture, and everywhere, as is generally the case in England, has taken charge of agriculture just as he has of industry, and has excluded the landowner from any direct participation in the production process. What Rodbertus regards as a "deviation", is, therefore, the right path, which however he does not understand because he is still engrossed in views that originated from the pre-capitalist mode of production.
"He too" (Ricardo) "does not divide the finished product among the parties concerned, but, like the other economists, regards the agricultural product as well
25* as the manufactured product — as a separate product, which has to be divided" (I.e., [p.] 167).
Not the product, Mr. Rodbertus, but the value of the product, and this is quite correct. Your "finished" product and its division have absolutely nothing to do with this division of value.
"He" (Ricardo) "regards capital property as given and that even earlier than landed property.... Thus he does not begin with the reasons for, but with the fact of the division of the product, and his entire theory is limited to the causes which determine and modify the proportions of the shares.... The division of the product purely into wages and capital gain is for him the original one and originally also the only one" (I.e., [p.] 167).
This you fail to understand again, Mr. Rodbertus. From the standpoint of capitalist production, capital property does in fact appear as the "original" because capitalist production is based on this sort of property and it is a factor of and fulfils a function in capitalist production; this does not hold good of landed property. The latter appears as derivative, because modern landed property is in fact feudal property, but transformed by the action of capital upon it; in its form as modern landed property it is therefore derived from, and the result of capitalist production. That Ricardo •considers the position as it is and appears in modern society to be also the historically original situation (whereas you, instead of keeping to the modern form, cannot rid yourself of your memories of landownership) is a delusion from which the bourgeois economists suffer in respect of all bourgeois economic laws. They appear to them as "natural laws" and hence also as historically "primary".
[XI-518] But Mr. Rodbertus could already see from the very first sentence of his preface, that Ricardo, where it is not a question of the value of the product, but of the product itself, permits the whole of the "finished" product to be shared out.
* "The produce of the earth—all that is derived from its surface by the united application of labour, machinery, and capital, is divided among three classes of the community; namely, the proprietor of the land, the owner of the stock or capital necessary for its cultivation, and the labourers by whose industry it is cultivated" * (Principles of Political Economy, Preface, 3RD ED., London, 1821).
He continues forthwith:
PRODUCE" are solely determined within each sphere of production by the share which each SHAREHOLDER has in the "value" of his own product. This "value" is convertible into and can be expressed in A CERTAIN ALIQUOT PART OF THE "WHOLE PRODUCE". Ricardo only errs here, following Adam Smith, in that he forgets that "THE WHOLE
PRODUCE" IS not DIVIDED INTO RENT, PROFIT and WAGES, but THAT PART OF IT
"WILL BE ALLOTTED" IN THE SHAPE OF CAPITAL TO ONE OR SOME OF THESE 3 CLASSES.
"You might want to assert, that, just as originally the law of the equalisation of capital gains would have had to depress raw product prices so far that ground-rent would have to disappear only to be re-created as a result of a rise in prices due to the difference between the yield of more fertile and less fertile land — so, today the advantages of drawing rent besides the usual capital gain, would induce the capitalist to spend capital on new cultivation and improvements until, due to the flooding of markets brought forth by this, prices would fall sufficiently in order to make rents on the least favourable capital investments disappear again. In other words, this would be to assert that, so far as the raw product is concerned, the law of t h e e q u a l i s a t i o n of c a p i t a l g a i n s i n v a l i d a t e s t h e o t h e r law, t h a t t h e v a l u e of the p r o d u c t s is g o v e r n e d by labour costs, while it is just Ricardo, who, in the 1st chapter of his work, uses the former to prove the latter" ([Rodbertus,] I.e., [p.] 174).
Indeed, Mr. Rodbertus! The law of the "equalisation of capital gains" does not invalidate the law that the "value" of the products is governed by "labour costs". But it does invalidate Ricardo's assumption that the average price of the products=their "value". But there again, it is not the "raw product" whose value is reduced to the average price, but the other way about. Due to landed property, the "raw product" is distinguished by the privilege that its value is not reduced to the average price. If, indeed, its value did decrease, which would be possible despite your "value of the material", to the LEVEL of the average price of the commodities, then rent would disappear. The types of land which POSSIBLY pay no rent today, pay none, because the market price of raw products is for them equal to their own average price, and because the competition of more fertile types of land deprives them of the privilege of selling their product at its "value".
"Could it be true that before any cultivation takes place at all, capitalists already exist who receive a profit and invest their capital according to the law of profit equalisation?" (How VERY SILLY!) "...1 admit, that if today an expedition from the civilised countries set out to a [XI-519] new, uncultivated land, an expedition in which the wealthier participants were equipped with supplies and tools — capital— from an old established culture and the poorer ones came along with a view to winning a high wage in the service of the former, then the capitalists would regard as their gain that which remains to them over and above the wages of the workers for they bring with them from their mother country things and ideas which have long been in existence there" ([pp.] 174-75).
Well, here you have it, Mr. Rodbertus. Ricardo's whole conception is only appropriate to the presupposition that the capitalist mode of production is the predominant one. How he expresses this presupposition, whether he commits a historical hysteron proteron,[3] is irrelevant to the theory. The presupposition must be made, and it is therefore impossible to introduce, as you are doing, the peasant, who does not understand capitalist book-keeping and hence does not reckon seeds, etc., as part of the capital advanced! The "absurdity" is introduced not by Ricardo but by Rodbertus, who assumes that capitalists and workers exist "before cultivation of the land" ([p.] 176).
"According to the Ricardian concept, cultivation of the land is supposed to begin ... only when ... capital has been created in a society and capital gain is known and paid" ([p.] 178).
What utter nonsense! Only when a capitalist has squeezed himself as FARMER between the husbandman and the landed proprietor — be it that the old TENANT has swindled his way into becoming a capitalist FARMER, or that an industrialist has invested his capital in agriculture rather than in manufacture — only then begins, by no means "the cultivation of the land", but "capitalist" land cultivation which is very different, both in form and content, from the previous forms of cultivation.
"In every country the greater part of the land is already owned by someone long before it is cultivated; and certainly, long before a rate of capital gain has been established in industry" ([p.] 179).
To comprehend Ricardo's conception Rodbertus would have to be an Englishman instead of a Pomeranian landowner and would have to understand the history of the ENCLOSURE OF COMMONS and WASTE LAND. Mr. Rodbertus cites America. There the State sells the land
"in lots, first to the cultivators at a low price, it is true, but one which must at all events already represent a rent" ([pp.] 179-80).
By no means. This price does not constitute a ground-rent, any more than, say, a general trade tax constitutes a trade rent or in fact any tax constitutes a "rent".
"With regard to the cause of the rise under point b" //the increase in population or the increase in the quantity of labour employed// "I maintain, however, that rent has precedence over capital gain. The latter can never rise because, as a result of the increased national product — if productivity remains the same but productive power increases (increased population)—more capital gain accrues to the nation, for this greater capital gain always accrues to a capital which is greater in the same proportion, the rate of profit therefore remains the same" ([pp.] 184-85).
Inversion of natural order.— Ed.
This is wrong. The quantity of unpaid surplus labour rises, for instance, if 3, 4, 5 hours surplus labour time are worked instead of 2 hours. The volume of capital advanced does not grow [to the same extent] as the volume of this unpaid surplus labour, d'abord, because this further excess of surplus labour is not paid for and so does not occasion a capital outlay; secondly, because the capital outlay for fixed capital does not grow in the same proportion as its utilisation in this instance. No more spindles, etc., are required. True, they are used up more quickly but not in the same proportion in which their use increases. Thus, given the same productivity, profit grows here, because not only the surplus value grows, but also the rate of surplus value. In agriculture this is impracticable because of the natural conditions. On the other hand, productivity is easily altered with the increased outlay of capital. Although an absolutely large amount of capital is laid out, it is relatively not so big, due to economies in the conditions of production, quite apart from the division of labour and machinery. Thus the rate of profit could grow even if the surplus value (not only its rate) remained the same.
[XI-520] Rodbertus is positively wrong, and typically the Pomeranian landowner when he says:
"It is possible that in the course of these 30 years" (1800-1830) "more properties came into being through the parcelling out of land or even through the cultivation [of new land] and the increased rent was thus also divided among more landowners, but it was not distributed over more acres in 1830 than in 1800. Previously the older properties comprised the whole of the acreage of those newly separated or newly cultivated properties and the lower rent of 1800 was assessed on them as well, and this influenced the level of English rent in general at that time just as much as the higher rent in 1830" ([p.] 186).
Worthy Pomeranian! Why do you always transfer your Prussian situation to England in a disparaging manner? The Englishman does not reckon that, if, as was the case (this to be looked up), 3 to 4 million ACRES were "ENCLOSED " between 1800 and 1830,[136] the rent on these 4 million ACRES was calculated before 1830 as well and also in 1800. Rather they were WASTE LAND OR COMMONS which bore no rent and did not belong to anybody.
It has nothing to do with Ricardo if Rodbertus, like Carey (but in a different way), seeks to prove to Ricardo that for physical and other reasons, the "most fertile" land is usually not the first to be cultivated. The "most fertile" land is always the "most fertile" under the existing conditions of production.
A very large number of the objections which Rodbertus raises against Ricardo arise from the naïve manner in which he identifies the "Pomeranian" conditions of production with the "English".
Ricardo presupposes capitalist production to which, where it is in fact carried out, as in England, corresponds the separation of the FARMING CAPITALIST from the LANDLORD. Rodbertus introduces circumstances which are in themselves alien to the capitalist mode of production, which has merely been built upon them. For instance, what Mr. Rodbertus says about the position of economic CENTRES in economic complexes applies perfectly to Pomerania but not to England, where the capitalist mode of production has become increasingly pre-eminent since the last third of the 16th century, where it has assimilated all the conditions and in different periods has progressively sent historical preconditions, villages, buildings and people, to the devil, in order to secure the "most productive" investment for capital.
What Rodbertus says about "capital investment" is equally wrong.
"Ricardo limits ground-rent to that which the landowner is paid for the use of the original, natural and indestructible qualities of the land. He thus wants to ensure that everything which would have to be ascribed to capital in the land which is already being cultivated, is deducted from rent. But it is clear that out of the yield from a piece of land he must never allot more to capital than the full interest customary in a country. For otherwise he would have to assume that there are two different rates of gain in the economic development of a country, one agricultural, which is greater than that prevailing in manufacture, and this latter. This assumption would overthrow his very system, which is based on the equality of the rate of gain" ([pp.] 215-16).
Again the notion of the Pomeranian landowner who gets money on tick in order to improve his property and who, for theoretical and practical reasons, only wants to pay the money-lender the "customary interest". But in England things are different. It is the FARMER, the FARMING CAPITALIST, who lays out capital in order to improve the land. From this capital, just as from that which he lays out directly in production, he does not demand the customary interest but the customary profit. He does not lend the landowner any capital on which the latter is to pay the "customary" interest. He may borrow capital himself, or else he uses his own surplus capital so that it yields him the "customary" industrial profit, at least double the customary interest.
Incidentally, Ricardo knows what Anderson already knew and, INTO THE BARGAIN, expressly says that [XI-521] the productive power of the land thus engendered by capital, later coincides with its "natural" productive power, hence swells the rent. Rodbertus knows nothing of all this and therefore babbles away at random.
I have already given a correct explanation of modern landed property:
"Rent, in the Ricardian sense, is property in land in its bourgeois state, that is, feudal property which has become subject to the conditions of bourgeois production" (Misère de la Philosophie, Paris, 1847, [p.] 156.)a
Similarly I have already correctly observed: "Ricardo, after postulating bourgeois production as necessary for determining rent, applies the conception of rent, nevertheless, to the landed property of all ages and all countries. This is an error common to all the economists, who represent the bourgeois relations of production as eternal categories" (I.e., [p.] 160).
I also pointed out correctly that "land as capital" could be increased like all other capitals:
"Land as capital can be increased just as much as all the other instruments of production. Nothing is added to its matter, to use M. Proudhon's language, but the lands which serve as instruments of production are multiplied. The very fact of applying further outlays of capital to land already transformed into means of production increases land as capital without adding anything to land as matter, that is, to the extent of the land" (I.e., [p.] 165).c
The difference between manufacture and agriculture which I pointed out at that time still remains correct:
"In the first place, one cannot, as in manufacturing industry, multiply at will the instruments of production possessing the same degree of productivity, that is, plots of land with the same degree of fertility. Then, as population increases, land of an inferior quality begins to be exploited, or new outlays of capital, proportionately less productive than before, are made upon the same plot of land" (I.e., [p.] 157).d
Rodbertus says:
"But I must draw attention to yet another circumstance which, admittedly, much more gradually, but also far more generally, turns worse agricultural machines into better ones. This is the continued management of a piece of land merely in accordance with a rational system, without making any special capital investment" ([p.] 222.)
Anderson already said cultivation improves the land.
"You would have to prove that the working population engaged in agriculture had, in the course of time, increased to a greater degree than the production of the means of subsistence or even just compared with the rest of the population of a country. Only this could irrefutably show that increasing agricultural production also demands that progressively more labour is expended upon it. But it is just here that statistics contradict you" ([Rodbertus, p.] 274). "Indeed, you will find that, [pretty well] as a rule, the denser the population of a country, the smaller will be the proportion of people engaged in agriculture... The same phenomenon can be observed when the population of a country increases: that section which is not engaged in agriculture will almost everywhere increase to a greater degree" ([p-] 275).
But this is partly because more arable land is turned over to cattle and sheep grazing, partly because with the higher stage of production — large-scale agriculture — labour becomes more productive. But also, and this is a circumstance which Mr. Rodbertus overlooks entirely, because a greater part of the non-agricultural population assist in agriculture, supplying constant capital — which grows with the advance in cultivation — such as mineral fertilisers, seeds from other countries, machinery of every sort.
According to Mr. Rodbertus (p. 78):
"At present the agriculturist" (in Pomerania) "does not" (regard) "the feeding-stuffs for his draught animals as capital, if he has grown these in his own establishment...."
[XI-522] "Capital in itself, or from an economic point of view, is a product which continues to be used for production.... But in respect of a particular 'gain' which it is to yield, or from the point of view of today's entrepreneurs, it must appear as an 'outlay' in order to be capital" ([p.] 77).
This concept of "outlay" however does not, as Rodbertus thinks, require that it is bought as a commodity. If instead of being sold as a commodity, a part of the product re-enters production, it does so as a commodity. It has previously been estimated as "money", and this is easily done, since simultaneously all these "outlays", in agriculture too, are available on the market as "commodities": cattle, feeding-stuffs, fertilisers, corn for sowing, seeds of all kinds. But it seems that in "Pomerania" this is not reckoned as "outlay".
"The value of the particular results of these different sorts of work" (manufacture and primary production) "is not the income itself which accrues to their owner, but only the measure for its conversion into money. This particular income itself is a part of the social income, which is only produced by the combined labour in agriculture and manufacture, and its elements too are thus only produced by this combined effort" (p. 36).
This is quite irrelevant. The realisation of this value can only be its realisation in use value. But we are not concerned with that. Furthermore, the necessary wage already implies how much value in the shape of agricultural and industrial products is contained in the means of subsistence the worker requires.
Endnotes
[136] In Capital, Vol. I, Ch. XXVII, Marx writes that between 1801 and 18 31, 3,511,770 acres of common land were stolen from the English agricultural population "and by parliamentary devices presented to the landlords by the landlords" (see present edition, Vol. 35).—383
[3] This is in fact not the conclusion but only the continuation of the section on Smith. The conclusion of this section can be found in Notebook IX.—6