Karl Marx
The Poverty of Philosophy
Chapter Two: The Metaphysics of Political Economy
In each historical epoch, property has developed differently and under a set of entirely different social relations. Thus to define bourgeois property is nothing else than to give an exposition of all the social relations of bourgeois production.
To try to give a definition of property as of an independent relation, a category apart, an abstract and eternal idea, can be nothing but an illusion of metaphysics or jurisprudence.
M. Proudhon, while seeming to speak of property in general, deals only with landed property, with ground rent.
“The origin of rent, as property, is, so to speak, extra- economic: it rests in psychological and moral considerations which are only very distantly connected with the production of wealth.”
(Vol. II, p. 265)
So M. Proudhon declares himself incapable of understanding the economic origin of rent and of property. He admits that this incapacity obliges him to resort to psychological and moral considerations, which, indeed, while only distantly connected with the production of wealth, have yet a very close connection with the narrowness of his historical views. M. Proudhon affirms that there is something mystical and mysterious about the origin of property. Now, to see mystery in the origin of property – that is, to make a mystery of the relation between production itself and the distribution of the instruments of production – is not this, to use M. Proudhon’s language, a renunciation of all claims to economic science?
M. Proudhon “confines himself to recalling that at the seventh epoch of economic evolution – credit – when fiction had caused reality to vanish, and human activity threatened to lose itself in empty space, it had become necessary to bind man more closely to nature. Now, rent was the price of this new contract.”
(Vol. II, p. 269)
L’homme aux quarante écus [1] foresaw a M. Proudhon of the future:
“Mr. Creator, by your leave: everyone is master in his own world: but you will never make me believe that the one we live in is made of glass.”
In your world, where credit was a means of losing oneself in empty space, it is very possible that property became necessary in order to bind man to nature. In the world of real production, where landed property always precedes credit, M. Proudhon’s horror vacui [horror of a vacuum] could not exist.
The existence of rent once admitted, whatever its origin, it becomes a subject of mutually antagonistic negotiations between the farmer and the landed proprietor. What is the ultimate result of these negotiations, in other words, what is the average amount of rent? This is what M. Proudhon says:
“Ricardo’s theory answers this question. In the beginning of society, when man, new to earth, had before him nothing but huge forests, when the earth was vast and when industry was beginning to come to life, rent must have been nil. Land, as yet unformed by labour, was an object of utility; it was not an exchange value, it was common, not social. Little by little, the multiplication of families and the progress of agriculture caused the price of land to make itself felt. Labour came to give the soil its worth; from this, rent came into being. The more fruit a field yielded with the same amount of labour, the higher it was valued; hence the tendency of proprietors was always to arrogate to themselves the whole amount of the fruits of the soil, less the wages of the farm – that is, less the costs of production. Thus property followed on the heels of labour to take from it all the product that exceeded the actual expenses. As the proprietor fulfils a mystic duty and represents the community as against the colonus, that farmer is, by the dispensation of Providence, no more than a responsible labourer, who must account to society for all he reaps above his legitimate wage. ...
“In essence and by destination, then, rent is an instrument of distributive justice, one of the thousand means that the genius of economy employs to attain to equality. It is an immediate land valuation which is carried out contradictorily by landowners and farmers, without any possible collusion, in a higher interest, and whose ultimate result must be to equalize the possession of the land between the exploiters of the soil and the industrialists....
“It needed no less than this magic of property to snatch from the colonus the surplus of his product which he cannot help regarding as his own and of which he considers himself to be exclusively the author. Rent, or rather property, has broken down agricultural egoism and created a solidarity that no power, no partition of the land could have brought into being....
“The moral effect of property having been secured, at present what remains to be done is to distribute the rent.”
[Vol. II, pp. 270-272]
All this tumult of words may be reduced firstly to this: Ricardo says that the excess of the price of agricultural products over their cost of production, including the ordinary profit and interest on the capital, gives the measure of the rent. M. Proudhon does better. He makes the landowner intervene, like a Deus ex machina, and snatch from the colonus all the surplus of his production over the cost of production. He makes use of the intervention of the landowner to explain property, of the intervention of the rent-receiver to explain rent. He answers the problem by formulating the same problem and adding an extra syllable. [2]
Let us note also that in determining rent by the difference in fertility of the soil, M. Proudhon assigns a new origin to it, since land, before being assessed according to different degrees of fertility, “was not,” in his view, “an exchange value, but was common.” What, then, has happened to the fiction about rent having come into being through the necessity of bringing back to the land man who was about to lose himself in the infinity of empty space?
Now let us free Ricardo’s doctrine from the providential, allegorical, and mystical phrases in which M. Proudhon has been careful to wrap it.
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.
We have seen that, according to the Ricardian doctrine, the price of all objects is determined ultimately by the cost of production, including the industrial profit; in other words, by the labour time employed. In manufacturing industry, the price of the product obtained by the minimum of labour regulates the price of all other commodities of the same kind, seeing that the cheapest and most productive instruments of production can be multiplied to infinity and that competition necessarily gives rise to a market price – that is, a common price for all products of the same kind.
In agricultural industry, on the contrary, it is the price of the product obtained by the greatest amount of labour which regulates the price of all products of the same kind. 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. In both cases a greater amount of labour is expended to obtain a proportionately smaller product. The needs of the population having rendered necessary this increase of labour, the product of the land whose exploitation is the more costly has as certain a sale as that of a piece of land whose exploitation is cheaper. As competition levels the market price, the product of the better soil will be paid for as dearly as that of the inferior. It is the excess of the price of the products of the better soil over the cost of their production that constitutes rent. If one could always have at one’s disposal plots of land of the same degree of fertility; if one could, as in manufacturing industry, have recourse continually to cheaper and more productive machines, or if the subsequent outlays of capital produced as much as the first, then the price of agricultural products would be determined by the price of commodities produced by the best instruments of production, as we have seen with the price of manufactured products. But, from this moment rent would have disappeared also.
For the Ricardian doctrine – “once the premises granted” – to be generally true, it is moreover essential that capital should be freely applicable to different branches of industry; that a strongly developed competition among the capitalists should have brought profits to an equal level; that the farmer should be no more than an industrial capitalist claiming for the use of his capital on the land, a profit equal to that which he would draw from his capital if it were applied in any kind of manufacture; that agricultural exploitation should be subjected to the regime of large-scale industry; and finally, that the landowner himself should aim at nothing beyond the money return.
It may happen, as in Ireland, that rent does not yet exist, although the letting of land has reached an extreme development there. Rent being the excess not only over wages, but also over industrial profit, it cannot exist where the landowner’s revenue is nothing but a mere levy on wages.
Thus, far from converting the exploiter of the land, the farmer, into a simple labourer, and “snatching from the cultivator the surplus of his product, which he cannot help regarding as his own,” rent confronts the landowner, not with the slave, the serf, the payer of tribute, the wage labourer, but with the industrial capitalist.
Once constituted as ground rent, ground property has in its possession only the surplus over production costs, which are determined not only by wages but also by industrial profit. It is therefore from the landowner that ground rent snatched a part of his income. Thus, there was a big lapse of time before the feudal farmer was replaced by the industrial capitalist. In Germany, for example, this transformation began only in the last third of the 18th century. It is in England alone that this relation between the industrial capitalist and the landed proprietor has been fully developed.
So long as there was only M. Proudhon’s colonus, there was no rent. The moment rent exists, the colonus is no longer the farmer, but the worker, the farmer’s colonus. The abasement of the labourer, reduced to the role of a simple worker, day labourer, wage-earner, working for the industrial capitalist; the invention of the industrial capitalist, exploiting the land like any other factory; the transformation of the landed proprietor from a petty sovereign into a vulgar usurer; these are the different relations expressed by rent.
Rent, in the Ricardian sense, is patriarchal agriculture transformed into commercial industry, industrial capital applied to land, the town bourgeoisie transplanted into the country. Rent, instead of binding man to nature, has merely bound the exploitation of the land to competition. Once established as rent, landed property itself is the result of competition, since from that time onwards it depends on the market value of agricultural produce. As rent, landed property is mobilized and becomes an article of commerce. Rent is possible only from the moment when the development of urban industry, and the social organization resulting therefrom, force the landowner to aim solely at cash profits, at the monetary relation of his agricultural products – in fact to look upon his landed property only as a machine for coining money. Rent has so completely divorced the landed proprietor from the soil, from nature, that he has no need even to know his estates, as is to be seen in England. As for the farmer, the industrial capitalist and the agricultural worker, they are no more bound to the land they exploit than are the employer and the worker in the factories to the cotton and wool they manufacture; they feel an attachment only for the price of their production, the monetary product. Hence the jeremiads of the reactionary parties, who offer up all their prayers for the return of feudalism, of the good old patriarchal life, of the simple manners and the fine virtues of our forefathers. The subjection of the soil to the laws which dominate all other industries is and always will be the subject of interested condolences. Thus it may be said that rent has become the motive power which has introduced idyll into the movement of history.
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.
From the providential aim of rent – which is, for M. Proudhon, the transformation of the colonus into a responsible worker, he passes to the equalized reward of rent.
Rent, as we have just seen, is constituted by the equal price of the products of lands of unequal fertility, so that a hectolitre of corn which has cost 10 francs is sold for 20 francs if the cost of production rises to 20 francs upon soil of inferior quality.
So long as necessity forces the purchase of all the agricultural products into the market, the market price is determined by the cost of the most expensive product. Thus it is this equalization of price, resulting from competition and not from the different fertilities of the lands, that secures to the owner of the better soil a rent of 10 francs for every hectolitre that his tenant sells.
Let us suppose for a moment that the price of corn is determined by the labour time needed to produce it, and at once the hectolitre of corn obtained from the better soil will sell at 10 francs, while the hectolitre of corn obtained on the inferior soil will cost 20 francs. This being admitted, the average market price will be 15 francs, whereas, according to the law of competition, it is 20 francs. If the average price were 15 francs, there would be no occasion for any distribution, whether equalized or otherwise, for there would be no rent. Rent exists only when one can sell for 20 francs the hectolitre of corn which has cost the producer 10 francs. M. Proudhon supposes equality of the market price, with unequal costs of production, in order to arrive at an equalized sharing out of the product of inequality.
We understand such economists as Mill, Cherbuliez, Hilditch, and others demanding that rent should be handed over to the state to serve in place of taxes. That is a frank expression of the hatred the industrial capitalist bears towards the landed proprietor, who seems to him a useless thing, an excrescence upon the general body of bourgeois production.
But first to make the price of the hectolitre of corn 20 francs in order then to make a general distribution of the 10 francs overcharge levied on the consumer, is indeed enough to make the social genius pursue its zigzag course mournfully – and knock its head against some corner.
Rent becomes, under M. Proudhon’s pen, “an immense land valuation, which is carried out contradictorily by land-owners and farmers... in a higher interest, and whose ultimate result must be to equalize the possession of land between exploiters of the soil and the industrialists.”
[Vol. II, p. 271]
For any land valuation based upon rent to be of practical value, the conditions of present society must not be departed from.
Now, we have shown that the farm rent paid by the farmer to the landlord expresses the rent with any exactitude only in the countries most advanced in industry and commerce. And even this rent often includes interest paid to the landlord on capital incorporated in the land. The location of the land, the vicinity of towns, and many other circumstances influence the farm rent and modify the ground rent. These peremptory reasons would be enough to prove the inaccuracy of a land valuation based on rent.
Thus history, far from supplying, in rent, a ready-made land valuation, does nothing but change and turn topsy-turvy the land valuations already made.
Finally, fertility is not so natural a quality as might be thought; it is closely bound up with the social relations of the time. A piece of land may be very fertile for corn growing, and yet the market price may decide the cultivator to turn it into an artificial pastureland and thus render it infertile.
M. Proudhon has improvised his land valuation, which has not even the value of an ordinary land valuation, only to give substance to the providentially equalitarian aim of rent.
“Rent,” continues M. Proudhon, “is the interest paid on a capital which never perishes, namely – land. And as the capital is capable of no increase in matter, but only of an indefinite improvement in its use, it comes about that while the interest or profit on a loan (mutuum) tends to diminish continually through abundance of capital, rent tends always to increase through the perfecting of industry, from which results the improvement in the use of the land.... Such, in its essence, is rent.”
(Vol. II, p. 265)
This time, M. Proudhon sees in rent all the characteristics of interest, save that it is derived from capital of a specific nature. This capital is land, an eternal capital, “which is capable of no increase in matter, but only an indefinite improvement in its use.” In the progressive advance of civilization, interest has a continual tendency to fall, whilst rent continually tends to rise. Interest falls because of the abundance of capital; rent rises owning to the improvements brought about in industry, which results in an ever better utilization of land.
Such, in its essence, is the opinion of M. Proudhon.
Let us first examine how far it is true to say that rent is interest on capital.
For the landed proprietor himself, rent represents the interest on the capital that the land has cost him, or that he would draw from it if he sold it. But in buying or selling land he only buys or sells rent. The price he pays to make himself a receiver of rent is regulated by the rate of interest in general and has nothing to do with actual nature of rent. The interest on capital invested in land is in general lower than the interest on capital invested in manufacture or commerce. Thus, for those who make no distinction between the interest that the land represents to the owner and the rent itself, the interest on land capital diminishes still more than does the interest on other capital. But it is not a question of the purchase or sale price of rent, of the marketable value of rent, of capitalized rent, it is a question of rent itself.
Farm rent can imply again, apart from rent proper, the interest on the capital incorporated in the land. In this instance the landlord receives this part of the farm rent, not as a landlord but as a capitalist; but this is not the rent proper that we are to deal with.
Land, so long as it is not exploited as a means of production, is not capital. 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. M. Proudhon’s land as matter is the Earth in its limitation. As for the eternity he attributes to land, we grant readily it has this virtue as matter. Land as capital is no more eternal than any other capital.
Gold and silver, which yield interest, are just as lasting and eternal as land. If the price of gold and silver falls, while that of land keeps rising, this is certainly not because of its more or less eternal nature.
Land as capital is fixed capital; but fixed capital gets used up just as much as circulating capital. Improvements to the land need production and upkeep; they last only for a time; and this they have in common with all other improvements used to transform matter into means of production. If land as capital were eternal, some lands would present a very different appearance from what they do today, and we should see the Roman Campagna, Sicily, Palestine, in all the splendour of their former prosperity.
There are even instances when land as capital might disappear, even though the improvements remain incorporated in the land.
In the first place, this occurs every time rent proper is wiped out by the competition of new and more fertile soils; secondly, the improvements which might have been valuable at one time cease to be of value the moment they become universal owing to the development of agronomy.
The representative of land as capital is not the landlord, but the farmer. The proceeds yielded by land as capital are interest and industrial profit, not rent. There are lands which yield such interest and profit but still yield no rent.
Briefly, land in so far as it yields interest, is land capital, and as land capital it yields no rent, it is not landed property. Rent results from the social relations in which the exploitation of the land takes place. It cannot be a result of the more or less solid, more or less durable nature of the soil. Rent is a product of society and not of the soil.
According to M. Proudhon, “improvement in the use of the land” – a consequence “of the perfecting of industry” – causes the continual rise in rent. On the contrary, this improvement causes its periodic fall.
Wherein consists, in general, any improvement, whether in agriculture or in manufacture? In producing more with the same labour; in producing as much, or even more, with less labour. Thanks to these improvements, the farmer is spared from using a greater amount of labour for a relatively smaller product. He has no need, therefore, to resort to inferior soils, and instalments of capital applied successively to the same soil remain equally productive.
Thus, these improvements, far from continually raising rent as M. Proudhon says, become on the contrary so many temporary obstacles preventing its rise.
The English landowners of the 17th century were so well aware of this truth, that they opposed the progress of agriculture for fear of seeing their incomes diminish. (See Petty, an English economist of the time of Charles II.)
[1] L’homme aux quarante écus: “The Man of Forty Ecus” – the hero of Voltaire’s story of the same name, a modest, hard-working peasant with an annual income of 40 ecus; the following passage is quoted from the story.
[2] In the original manuscript, Marx makes a play on words in the French: turning “propriété” (property) into “proprietaire” (landowner) and “rente” (rent) into “rentier” (rent-reciever).