Originally written: 11.01.2021.
Across his political writings, Marx often talks about the ruling class as being composed of both capitalists and landowners. For instance, in Fictitious Splits in the International:
Contrary to the sectarian organization, with their vagaries and rivalries, the International is a genuine and militant organization of the proletarian class of all countries, united in their common struggle against the capitalists and the landowners, against their class power organized in the state.
But so far I’ve only addressed the former, in this previous part. Let’s do this then!
Bertell Ollman offers a short overview on Marx’s use of this category throughout his works:
The landowners are included as one of the “three great social classes” mentioned in Marx’s Introduction to the Critique of Political Economy and are referred to as a separate class in a number of other places (…). In “The Eighteenth Brumaire of Louis Bonaparte” Marx treats them as a section of the bourgeoisie, claiming that “large landed property, despite its feudal coquetry and pride of race, has been rendered thoroughly bourgeois by the developments of modern society”.
Although this is another important reminder that we should never settle for a retroactively and artificially linear and coherent class theory we attribute to Marx, there is a general and largely stable conception of the landowner in his writings. Ollman says elsewhere: “For Marx, the landowner class is composed of owners of large tracts of land and is almost always feudal in origin.”
The general definition of the landowner class which is gradually elaborated, and Marx eventually outlines a more or less definitive version of it in Book III of Capital. The landowner class is defined as such – as a class – insofar as it clashes with capital in the division of the surplus value, by attracting part of the profit to itself in the form of ground rent, though obviously here there’s an issue we’ll come back to later, namely whether it is a fraction of the capitalist class rather than a separate class. This goes back to something you’ll know about if you’ve read Capital III: the surplus product beyond what is necessary for the reproduction of the means of production and labour-power, is divided into ground rent ( → landlord), interest ( → moneyed capitalist) and profit of enterprise ( → industrial and commercial capitalist). Just like the moneyed capitalist we talked about in the previous part, the landlord plays a passive role or function vis-à-vis the reproduction process of capital, that is, it doesn’t use capital in its actual functioning as capital, i.e. for producing value and surplus-value.
This article will proceed in the following order. First, I will provide a summary of the use and conception of the landowner class in Marx’s writings, to get an idea of how he talks about it. I will then try to reconstruct and offer Marx’s theory of modern landed property and the landowner class, using Neocosmos’ influential paper on the matter [1]. The goal in the latter section is to arrive at a more or less stable and precise definition and analysis of the modern landlords, in Marx’s conception. As a conclusion, the general findings wil be summed up.
Before jumping into it, a note on Marx’s theory of rent. Evidently, talking about landed property implies the notion of rent and how it works as a type and source of revenue, and more broadly as an economic category. Throughout the second section, I will of course address Marx’s conception of rent to some extent, as part of the overall analysis of modern landed property and the modern landowner class. However, this isn’t an analysis of Marx’s theory of rent. See the footnote [2] for some recent literature on this question, if you want to dive into it.
Overview
The first “work” in which Marx talks at some length – beyond the occasional mention or comment – about landowners is the Paris Manuscripts of 1844, most famous for containing his early theory of alienation and species-being. These manuscripts contain a part focused on political economy, which can be considered in a general sense as the start of Marx’s study of economic matters. The examination of the formation and evolution of Marx’s economic studies (and eventually, critique of the field of political economy, as Michael Heinrich would say) is besides the point of this article, but here we need to keep in mind that early on, Marx was very strongly influenced by and to a large extent reproducing the ideas of classical bourgeois economists Adam Smith and, especially, David Ricardo. The reason is simply that he was merely beginning his study of ‘economics’, and it would take some time before his own Critique of Political Economy would start developing as his own unique and comprehensive approach, approximately throughout the 1850’s. That does not mean that he didn’t have critical remarks on bourgeois economists’ views in 1844, but we should never conflate or mix the conceptions built throughout the later development of his Critique with his earlier economic works that weren’t as sophisticated or thought out.
Smith’s and Ricardo’s influence on Marx is visible for instance in his pretty intense hostility towards landlords who, as Smith famously said, ‘reap what they did not sow”:
It is essential that that which is the root of landed property – filthy self-interest – make it appearance, too, in its cynical form. (…) The right of the landowners can be traced back to robbery. [Say, I, p. 136, n.2] (…) Let us now see how the landlord exploits everything which is to the benefit of society.
[1844 Paris Manuscripts]
The landowner in the strict sense, who is neither a peasant nor a tenant farmer, has no share in production. Consumption on his part is, therefore, nothing but abuse.
[Communist Manifesto]
Surely this can’t simply be the influence of Smith or Ricardo at work, but at the very least this is something on which he agreed with them. Landlords were considered by the emerging industrial bourgeoisie as unproductive rentiers without merit for having ‘earned it’ – contrary to the image these capitalists had of themselves, and this was reflected in bourgeois political economy.
However, another aspect mentioned in the Paris Manuscripts, which as far as I know is different from Smith and Ricardo, is what he calls “the abolition of the distinction between capitalist and landowner”.
The division of landed property negates the large-scale monopoly of property in land – abolishes it; but only by generalising this monopoly. It does not abolish the source of monopoly: private property. It attacks the existing form, but not the essence, of monopoly. The consequence is that it falls victim to the laws of private property. For the division of landed property corresponds to the movement of competition in the sphere of industry.
There’s a kind of “dissolution” of landed property and landowners into capital and capitalists:
The small landed proprietor working on his own land stands then to the big landowner in the same relation as an artisan possessing his own tool to the factory owner. Small property in land has become a mere instrument of labour. Rent entirely disappears for the small proprietor; there remains to him at the most the interest on his capital, and his wages. For rent can be driven down by competition till it is nothing more than the interest on capital not invested by the proprietor. (…) The competition has the further consequence that a large part of landed property falls into the hands of the capitalists and that capitalists thus become simultaneously landowners, just as the smaller landowners are on the whole already nothing more than capitalists. Similarly, a section of large landowners become at the same time industrialists. The final consequence is thus the abolition of the distinction between capitalist and landowner, so that there remain altogether only two classes of the population – the working class and the class of capitalists. This huckstering with landed property, the transformation of landed property into a commodity, constitutes the final overthrow of the old and the final establishment of the money aristocracy. (…) It is necessary that this appearance [note: the ‘nobility’s relationship to landed property’ … ‘casts a romantic glory on its lords’] be abolished – that landed property, the root of private property, be dragged completely into the movement of private property and that it become a commodity
Marx’s conception of landowners isn’t defined more precisely in his political writings, not on a conceptual level. From what I have been able to see, this class is simply part of the ruling class of the country (e.g. England, France…), and Marx talks about the ups and downs of the struggles for power, temporary alliances and more, between the ‘landowner’ and the ‘capitalist’ sections of this whole dominant social group (or stratum/layer). Let’s take a look some of the 1850s political writings, before moving on to the central part of this article.
In the Class Struggles in France, he mentions this alliance between capitalists and landowners:
The first thing the February Republic had to do was, rather, to complete the rule of the bourgeoisie by allowing, besides the finance aristocracy, all the propertied classes to enter the orbit of political power. The majority of the great landowners, the Legitimists, were emancipated from the political nullity to which they had been condemned by the July Monarchy.
Under Louis-Philippe, a fraction of large landowners was allied to the ‘financial aristocracy’:
It was not the French bourgeoisie that ruled under Louis Philippe, but one faction of it: bankers, stock-exchange kings, railway kings, owners of coal and iron mines and forests, a part of the landed proprietors associated with them – the so-called financial aristocracy. It sat on the throne, it dictated laws in the Chambers, it distributed public offices, from cabinet portfolios to tobacco bureau posts.
[The Class Struggles in France, 1848 to 1850, I]
We already see here that landowners, or at least a section thereof, are considered as a part of the bourgeoisie… The alliance of propertied classes is actually defined as a “bourgeois mass” in The 18th Brumaire of Louis Bonaparte, united politically as the “Party of Order”. [The same kind of analysis of the political cooperation between bourgeoisie and landowners that we mentioned in the article on the bourgeoisie can also be seen here.]
The period from December 20, 1848, until the dissolution of the Constituent Assembly in May, 1849, comprises the history of the downfall of the bourgeois republicans. After having founded a republic for the bourgeoisie, driven the revolutionary proletariat out of the field, and reduced the democratic petty bourgeoisie to silence for the time being, they are themselves thrust aside by the mass of the bourgeoisie, which justly impounds this republic as its property. This bourgeois mass was, however, royalist. One section of it, the large landowners, had ruled during the Restoration and was accordingly Legitimist. The other, the aristocrats of finance and big industrialists, had ruled during the July Monarchy and was consequently Orleanist. The high dignitaries of the army, the university, the church, the bar, the academy, and the press were to be found on either side, though in various proportions.
Here, in the bourgeois republic, which bore neither the name Bourbon nor the name Orleans, but the name capital, they had found the form of state in which they could rule conjointly. The June insurrection had already united them in the party of Order. Now it was necessary, in the first place, to remove the coterie of bourgeois republicans who still occupied the seats of the National Assembly. Just as brutal as these pure republicans had been in their misuse of physical force against the people, just as cowardly, mealy-mouthed, broken-spirited, and incapable of fighting were they now in their retreat, when it was a question of maintaining their republicanism and their legislative rights against the executive power and the royalists.
I need not relate here the ignominious history of their dissolution. They did not succumb; they passed out of existence. Their history has come to an end forever, and, both inside and outside the Assembly, they figure in the following period only as memories, memories that seem to regain life whenever the mere name republic is once more the issue and as often as the revolutionary conflict threatens to sink down to the lowest level. I may remark in passing that the journal which gave its name to this party, the National, was converted to socialism in the following period.
[The 18th Brumaire of Louis Bonaparte, II]
He also mentions these aspects (and more) in this important passage, which we’ll comment further in the final article on his general conception of class, since it contains some more general and theoretical elements. Here what matters for now is what he says about landed property and landowners:
Legitimists and Orleanists, as we have said, formed the two great factions of the party of Order. Was what held these factions fast to their pretenders and kept them apart from each other nothing but fleur-de-lis and tricolor, House of Bourbon and House of Orleans, different shades of royalism – was it at all the confession of faith of royalism? Under the Bourbons, big landed property had governed, with its priests and lackeys; under Orleans, high finance, large-scale industry, large-scale trade, that is, capital, with its retinue of lawyers, professors, and smooth-tongued orators. The Legitimate Monarchy was merely the political expression of the hereditary rule of the lords of the soil, as the July Monarchy was only the political expression of the usurped rule of the bourgeois parvenus.
What kept the two factions apart, therefore, was not any so-called principles, it was their material conditions of existence, two different kinds of property; it was the old contrast between town and country, the rivalry between capital and landed property. That at the same time old memories, personal enmities, fears and hopes, prejudices and illusions, sympathies and antipathies, convictions, articles of faith and principles bound them to one or the other royal house, who denies this? Upon the different forms of property, upon the social conditions of existence, rises an entire superstructure of distinct and peculiarly formed sentiments, illusions, modes of thought, and views of life. The entire class creates and forms them out of its material foundations and out of the corresponding social relations. The single individual, who derives them through tradition and upbringing, may imagine that they form the real motives and the starting point of his activity.
While each faction, Orleanists and Legitimists, sought to make itself and the other believe that it was loyalty to the two royal houses which separated them, facts later proved that it was rather their divided interests which forbade the uniting of the two royal houses. And as in private life one differentiates between what a man thinks and says of himself and what he really is and does, so in historical struggles one must distinguish still more the phrases and fancies of parties from their real organism and their real interests, their conception of themselves from their reality.
Orleanists and Legitimists found themselves side by side in the republic, with equal claims. If each side wished to effect the restoration of its own royal house against the other, that merely signified that each of the two great interests into which the bourgeoisie is split – landed property and capital – sought to restore its own supremacy and the subordination of the other. We speak of two interests of the bourgeoisie, for large landed property, despite its feudal coquetry and pride of race, has been rendered thoroughly bourgeois by the development of modern society. Thus the Tories in England long imagined that they were enthusiastic about monarchy, the church, and the beauties of the old English Constitution, until the day of danger wrung from them the confession that they are enthusiastic only about ground rent.
[The 18th Brumaire of Louis Bonaparte, III ]
We get one hint of the reason why the French ‘bourgeois mass’ would include landowners, in a passage I came across in my diving into the Marx-Engels Collected Works, Vol. 10 (p. 254-255). Here is the MECW translation, which is slightly different from the one included in the link below this quote.
The big riddle for M. Guizot, the one for which he sees an explanation only in the superior intelligence of the English, the riddle of the conservatism of the English Revolution, is the persisting alliance of the bourgeoisie with the majority of the big landowners, an alliance that distinguishes the English Revolution essentially from the French, which eliminated big landed property by parcellation. This class of big landowners allied with the bourgeoisie—which, incidentally, arose as early as under Henry VIII—found itself not in contradiction with the conditions of existence of the bourgeoisie as did French landed property in 1789, but, on the contrary, in perfect harmony with them. In actual fact their landed estates were not feudal but bourgeois property. On the one hand, the landed proprietors provided the industrial bourgeoisie with the labour force necessary to operate its manufactories and, on the other, were in a position to develop agriculture in accordance with the level of industry and trade. Hence their common interests with the bourgeoisie; hence their alliance with it.
[MIA version – England’s 17th Century Revolution (1850)]
I don’t think there’s a lot more to learn from these writings, the really interesting part, in my opinion, is Marx’s theorization of landowners in his Critique of Political Economy.
Modern Landed Property & The Landowner Class
Campling & Havice [3] sum up Marx’s (“mature”) conception of landed property and landowners like this:
For Marx, the category of modern landed property is an essential relation of capitalism. This relation forms the basis for a ‘third class’ of landowners that is separate from, but can only exist in concert with, capitalists and workers. Modern landed property’s role in capitalist production is as lessor of land, issuer of land and extractor of ground-rent (Neocosmos 1986), whether the land is used as a means of production (e.g. agriculture, mining) or as a condition of production (e.g. as a site for factories, retail, sewer hubs, housing). The rise of the dominance of capitalism in Britain created the conditions for the modern (rather than feudal) landed property as ‘a specific historical form’ (Marx 1976 [note: Capital 1], 1981 [note: Capital 3]). This process saw the simultaneous ‘freeing’ of the immediate producers from their feudal obligations to landowners as producers of surplus on the land and the disembedding of feudal landed property’s dual function of control of the land and agricultural production. The separation of these functions established the ‘class basis for a new collectivity of landlords defined by their possession of (bourgeois) property rights alone’ (Capps, 2012, 317, emphasis added). Once a landowning class has established juridical property rights (normally bestowed by a sovereign capitalist state), it mediates capital’s access to landed resources. However, unlike capital and wage labor, modern landed property exists outside of the process of production (Marx, 1981, 776). At the same time, landed property’s legal claim to particular portions of the globe as exclusive spheres of their private will to the exclusion of all others’ allow it to extract a portion of the surplus value created in the production process (Marx 1981, 752, 908). In the abstract, this portion takes the form of ground rent, i.e. ‘the form in which landed property is … valorized (Marx 1981, 756).
This provides some of the essential elements, but we need to dive into this in detail: this summary doesn’t offer in any way the full story, in my opinion (not that this was intended as such!). They mentioned Michael Neocosmos’s article (1986) – Marx’s Third Class. Capitalist Landed Property and Capitalist Development -, which I’ll use here at length, because it is essentially (a better version of) the kind of breakdown I would have done based on Marx’s Critique of Political Economy writings, from the Grundrisse to Capital III. I hope people will find it as interesting as I did, but it is only fair to tell the reader that I relied on this article to write this, rather than pretending this to be my original findings. What happened was that I read almost all of the passages and parts of Marx’s writings used by Neocosmos in this outline, and I fortunately found his article before starting my own breakdown of all this, which would probably have been far less coherent and helpful. People who have already read Book III of Capital perhaps won’t enjoy the repetition of some rather basic arguments by Marx, but it is necessary in order to offer a coherent presentation of this topic. Let’s get into it: this is gonna be *pretty* long^^
For those who might want to do so, here’s where you can read Neocosmos’ article, it is highly recommended (about 40 p. so not a short read!). Shoutout to Alexandra from Sci-Hub, the *only true vanguard* of the glorious proletarian revolution.
[The references to Neocosmos’ article will be indicated like this: (p. xx-yy); unless indicated otherwise, all quotes from Marx mentioned by Neocosmos come from Capital III]
According to Neocosmos’ interpretation of Marx’s class theory, his theorization is rooted in a theorization of the essential relations – wage-labour, capital and landed property – that constitute the ‘bases’ of the three big classes that “constitute in their mutual opposition the framework of modern society” [Capital III] – proletariat, bourgeoisie and landowners: these bases “explain the possible existence of classes in specific capitalist social formations” (10).
In Volume III of Capital, Marx criticizes the “vulgar economist” viewpoint of classes as relations of distribution given by nature, based on ‘factors of production’ that supposedly automatically give birth to class-specific revenues. This ‘trinity formula’, as Marx calls it, is a reified picture of social reality: it is “an expression of a seeming connection between value and its sources” [4], each class receiving a portion of the product according to their respective contributions in terms of factors of production (labor, capital, land). Marx says that this conception completes,
the mystification of the capitalist mode of production, the reification of social relations, and the immediate coalescence of the material relations of production with their historical and social specificity: the bewitched, distorted and upside-down world haunted by Monsieur le Capital and Madame la Terre, who are at the same time social characters and mere things. (Capital, 3, Penguin Classics: 969)
As Heinrich puts it,
The social form-determinations wage-labor, capital, and landed property seemingly coincide with the material conditions of production of labor, means of production, and land, so that every labor process is actually a capitalist production process. Marx therefore speaks of the “reification of the relations of production” (Capital 3: 969): with regard to the relations of production, it is no longer apparent that there are specific historical relations between people. Rather, these seem to have an objective foundation in the fact tha production occurs at all.
[Heinrich, An Introduction to Karl Marx’s Capital, p. 183-184]
Neocosmos therefore says that “Capital explains the conditions of existence of classes in capitalism.” But according to him, this doesn’t tell us whether these classes exist in specific social formations (i.e. in specific societies in specific historical contexts). Those questions can only be answered by “renewed investigation” (10).
Marx understands landed property in modern society not as some remnant of a feudal past, but as capitalist landed property, with its own specific characteristics and historical genesis. Indeed, modern landed property precisely distances itself form its feudal remnants:
Marx notes initially that modern landed property, is divorced from the ‘relations of dominion of servitude’ characteristic of feudalism and that it ‘discards all of its former political and social embellishments and associations’ thereby enabling ‘the conscious scientific application of agronomy’ to agricultural production. This divesting by modern landed property of its erstwhile feudal relations hints at what constitutes its most fundamental characteristic: its separation from both wage-labour and capital. Landed property becomes separated from labour through the process of creation of wage-labour itself – that is, the expropriation of the peasantry – but it also becomes separated from capital via its separation from production itself. The landlord is transformed from being ‘the manager and master of the process of production and of the entire process of social life to the position of mere lessor of land, usurer in land and mere collector of rent’. The capitalist mode of production in agriculture therefore implies teh separation of the functions of land ownership from those of production. Marx argues that the development of this mode of production in agriculture ‘separates land as an instrument of production from landed property and londowner’ so thoroughly that ‘the landowner may spend his whole life in Constantinople, while his estates lie in Scotland.’ The capitalist transformation of agriculture – as far as production is concerned – is therefore characterised by the separation of landed property from the control of the means of production, including land. Such control is now vested in the hands of the capitalist farmer who, like any other capitalist, employs wage-labour to produce commodities [Neocosmos mentions Book III here]. The specific character of capitalist landed property is one where ‘ownership’ is reduced and restricted to an institution of mere juridical tenure.
(13)
As a result, landed property under capitalism is not the essential relation through which surplus labour is extracted – it has been taken over by capital. Landed property is thus a different kind of antagonistic social relation – like that between labour ( → wage-labour) and production ( → capital) – that isn’t opposed to the immediate producers as it was under pre-captialist modes of production. This relation is founded on another type of extraction: the separation between capital and landed property enables the latter to appropriate part of the surplus-value, in the form of (capitalist, ground) rent. The basis for landownership – and thus for a class of landowners – under capitalism is therefore the separation of capital and wage-labour on the one hand [✓extraction of surplus value], and the separation of capital and landed property, on the other [✓extraction of rent, the basis of landowners’ revenue]. Moreover, Marx thinks that landed property is actually a structural obstacle to capital’s gradual overtaking of all economic spheres, by constituting an impediment to capital investment in agriculture.
Landed property constitutes an obstacle to capitalist accumulation and development not because of its supposedly pre-capitalist nature, but because of its capitalist nature. Capital itself creates this contradiction.
(14-15)
Another part of theorizing the existence – and conditions of existence – of classes is, according to Neocosmos, a conception of the “determinate (within limits) nature of class revenues” (15). What is to be theorized is the structural determination, not in phenomenal forms (such as wages and profits) but in essential relations of capitalism (such as wage-labor and capital), of the unity making possible the existence of specific classes. That is, on a theoretical level, the unity of individuals composing a class cannot be either accidental or based on the individuals’ will. Neocosmos argues that “a conception of the limits on the revenue of a particular class” – variable capital for wages, surplus-value for profit, ground rent for lease-money – enables Marx to explain why these revenues “find their origin in one specific portion of the product of labour”, i.e. their structural, rather than accidental, determination (18). Labourers’ revenue – wages – are based on (and therefore limited by) variable capital – or the ‘necessary’ portion of realized labour – and the capitalists’ revenue, on surplus value, i.e. ‘unpaid labour’. So what is the basis of landowners’ revenue?
Apart from the fact that rent emanates from surplus-value,
What has to be explained is the fact that the portion of surplus-value realised by this class is contained within specified structural limits and that this determinate portion of surplus-value is analytically distinct from the revenue (or realised value) itself. In addition, the existence of this determinate portion of value must be explained independently of the actions of the landed class.
(19-20)
Neocosmos adds here that unfortunately, Marx himself – even though he explicitly points out that this confusion is the source of a large part of misunderstanding economic reality – “does not systematically maintain throughout his exposition the crucial distinction between on the on hand ground-rent as a portion of value, an essential category, and on the other lease-money or revenue, a phenomenal category” (20). The magnitude of lease-money (like for other forms of revenue – see the article for the comparison) isn’t solely determined by this ground-rent “basis”, but of course also by other factors that belong to a different level of generality, namely the more concrete “microeconomic” context of competition (see examples, p. 20), as well as evolution of class struggle. Here we are solely concerned with the basis – or condition of existence – of landowners’ class-specific revenue.
Again, the parallel with capitalists is relevant here: Marx theorizes, in Capital I, the very root of capital’s existence, on a structural level rather than the more chaotic ups and downs of concrete profit-making activity. Hence he wants to explain capital not in terms of capitalists’ potential attempts at selling commodities above their value, which of course do occur in actual reality, but precisely in terms of the very possibility of production and reproduction of capital presupposing this isn’t the case. The reason for that is outlined in the beginning of Book 1, but the gist of it is that such unequal exchange – trying to play the market and sell at a higher price (> value) to make more money – can only be ‘accidental’, i.e. for the capitalist mode of production to exist, this can’t be a generalised feature of it (see Marx’ full argument!). Neocosmos suggests that focusing on the basis of the landlords’ revenue implies not explaining rent as deriving from a monopoly price: the latter, like ‘any industrial monopoly price, or a price derived from speculation on the market’, can only account for an accidental form of rent (or other forms of revenue – in the other examples just mentioned), one that is determined by demand and supply.
It is not that such prices and the revenues derived therefrom do not exist, but rather that no general theory of price can be determined on the basis of demand and supply. Only value can explain price, hence Marx’s theory must be able to explain the existence of a category of rent as a portion of the value of agricultural commodities. Landlords, therefore, should have a basis for their revenue when agricultural commodities sell at, or even below, their value. What must be explained, therefore, is the existence of limits, of a systematic ‘place’ within value, or more precisely within surplus value, which will provide the basis of a revenue for landed class. Marx conceptualises three such places: three forms of rent. They are: differential rent I; differential rent II; and absolute rent.
(21)
A crucial point here, which is also a central part of why modern agriculture becomes an obstacle to the overall development of capitalism, is that the capitalist exploitation of agriculture has the effect of “creating different kinds of permanent surplus profit, which constitutes real economic rent” (21). This places obstacles to the equalisation of the rate of profit across the economy (precisely, the realisation of surplus profit – as rent – means that this equalisation cannot operate either within agriculture or between the spheres of agriculture and industry), a necessary condition for accumulation, because the local advantage (say, because of introducing new cost-reducing technology) which makes the pocketing of a surplus profit by the capitalist possible, is supposed to be only temporary, so that the continuous increase in surplus value – on which capitalist development is rooted – can take place.
Differential rent, in booth DR I (application of equal amounts of capital to plots of varying fertility or location) and DR II (application of different amounts of capital to plots of equal fertility, or to the same plot), are “individual rents in the sense that they only exist on particular plots and hence can only be realised by particular landlords – those who possess the more productive plots” :
Differential rent arises from differences in the productivity of labour within agriculture and, in addition, it does not enter into the price of agricultural commodities as these are regulated by the worst plots which do not receive any differential rent.
(22-23)
On the other hand, the concept of absolute rent is introduced by Marx in order to explain the existence of an economic rent on the worst plots, which does enter into the market price of commodities. This rent is “limited in magnitude by the difference between the values and prices of production of agricultural commodities”, and unlike DR I and DR II, it “[covers] the sphere of agriculture as a whole, ” because of the fact that productivity is initially lower in agriculture than in industry [5]:
The possibility therefore exists for all landlords, and not just those on the better plots (that is, for the landlord class as a whole), to extract a revenue even though agricultural commodities are selling at their value. (23) The crucial point of Marx’s argument is that the difference between market price and price of production can be systematically situated within the limits of value and price of production, because productivity is lower in agriculture. (24)
The landlords’ revenue, on a structural level, is for Marx explicitly not derived from a monopoly position, which would imply that they “create” their own revenue – by charging for the products of the land they own ‘as much as the market could bear.’ Crucially, it is the separation of landed property from capital which makes possible the realisation of rent: the landlord, being the sole possessor of land, can partly manipulate the market conditions – i.e. speculate – in order the the difference between value and price of production may be realised as a revenue. Therefore, “the landlord does not create rent through his own ability, but merely realises a greater or lesser portion of this rent. Ultimately, the magnitude of lease-money or revenue he obtains will depend on the level of demand which determines the difference between market price and price of production” (24). It kinda goes without saying: individual landlords don’t create their revenue, they merely benefit from the economic situation of hoarding land through which they can extract rent, but they’re able to realise more or less of it as revenue by ‘playing the market’.
In sum the existence of rent is first explained by the social relation between wage-labour and capital. All three forms of rent are part of the socially produced surplus-value and presupposes the formation of an average rate of profit. Those conditions, along with the surplus profits they create, are the effects of a capital/wage-labour relation. But this relation only explains the existence of surplus profits and the possible limits of such profits. In order to explain the definite and systematic existence of such limits – in other words, the transformation of surplus profit into real economic rent – a further social condition is necessary: the separation of landed property from capital. Capitalist landed property may take the form of an independent class of landed proprietors so that rent is realised in the form of lease money. Thus the existence of rent can only be secured if in addition to the capital/wage-labour relation, there exists an antagonistic relation between landed property and capital. It is only because landed property exists independently of capital, or, to put the same point phenomenally, because landowners form a specific grouping which exists outside of the production process, and can consequently demand ‘as of right’ a portion of the surplus-value for the use of their land, that the equalisation of the rate of profit is impeded and that surplus profit is transformed into rent.
(25)
The mere existence of an excess in the value of agricultural products over their price of production would not in itself suffice to explain the existence of a ground rent…. But … if capital meets an alien force which it can but partially, or not at all, overcome, and which limits its investment in certain spheres, admitting it only under conditions which wholly or partly exclude that general equalisation of surplus-value to an average profit, then it is evident that the excess of the value of commodities in such spheres of production over their price of production would give rise to a surplus profit, which could be converted into rent and as such made independent with respect to profit. Such an alien force and barrier are presented by landed property, when confronting capital in its endeavor to invest in land, such a force is the landlord vis-à-vis the capitalist.
[Capital III]
Therefore, “[what] landlords do like other classes is to realise a revenue from their basis which exists beyond their will” (26), rather than “create it”. The process of realisation of revenue reproduces the essential relations of capitalism: for instance, the extraction of lease-money reproduces the rent relation.
Lastly, Neocosmos addresses the issue of whether landowners constitute an independent class or a fraction of the capitalist class.
To say that landlords constitute a fraction of capital is to assert that they form a constituent part of the unity of capital. To say that a structural antagonism exists between capital and landed property is to deny that unity.
(6-7)
For Marx, landed property constitutes itself in opposition to capital, unlike the fractions of capital (such as interest-bearing capital) that “form part of a unity of capital and fulfil important positive functions for it” (29). See (p. 28-29) for more details, but here’s a passage in which Marx explicitly notes the difference between landed property and interest-bearing capital:
Landed property is a means for grabbing part of the surplus-value produced by industrial capital. On the other hand, loan capital – to the extent that the capitalist operates with borrowed capital – is a means for producing the whole of the surplus-value. That money [commodities] can be loaned out as capital means nothing more than that it is itself capital. The abolition of landed property in the Ricardian sense, that is, its conversion into state property so that rent is paid to the state instead of to the landlord, is the ideal, the heart’s desire, which springs from the deepest, inmost essence of capital… Abolition of interest and of interest-bearing capital, on the other hand, means the abolition of capital and of capitalist production itself… There are not two different kinds of capital – interest-bearing and profit-yielding – but the selfsame capital which operates in the process of production as capital, produces a profit which is divided between two different capitalists – one standing outside the process, and as owner, representing capital as such …, and the other representing operating capital, capital which takes part in the production process.
[Theories of Surplus-Value, quoted in Neocosmos, p. 28-29]
Crucially, Neocosmos explains that Marx’s theory also implies the possibility of the disappearance of the landowner class, similarly to some ideas which we saw in Marx’s early writings (though from a different perspective, obviously). I recommend reading the full detailed explanation, but here is the core of it:
(…) the disappearance of landed property should be seen as a more or less rapid phenomenon, which results ultimately from the pressures brought to bear by the disappearance of landed property’s conditions of existence, pressures which it finds very difficult to resist. Like all processes of transformation of essential relations, this process is a gradual one, conditioned by struggles. It cannot simply be accomplished by legal measures.
(29)
There are two conditions of existence of modern landed property that, “with certain qualifications” [Neocosmos goes on to show that it’s not an immediate or automatic thing], need not necessarily pertain under capitalist conditions” (29). First, the existence of “a determinate category of real economic rent (surplus profits)” may not develop or disappear if absolute rent is made impossible, for instance if productivity in agriculture reaches the same level of industry, and “the intensification of the class struggle may force landed property to rely solely on differential rent” . On the other hand, the “capital/landed property relation” may disappear: that requires the abolition of the separation between capital and landed property. Since landed property can only exist because capital exists, this means a takeover of the former by the latter. This is what Marx called “de facto abolition of landed property”: when the capitalist and the landowner end up being the same person (30).
Whether the landlord becomes a capitalist, or the capitalist a landlord, depends on the outcome of the class struggle between landed property and capital. In either case, the ultimate result is the penetration of capital into agriculture and the further development of capitalism.
(31)
It is in the context of this “de facto abolition of landed property”, when the latter is incorporated into capital, that landed property can be considered as a fraction of capital, not being an “alien force” opposed to capitalist penetration into agriculture anymore.
Conclusion
I will simply use two final quotes from Neocosmos as a summary.
It follows from my argument that a specifically capitalist form of landed property can only exist if three conditions are secured. First, the capital/ wage-labour relations must exist; second, this relation must produce surplus profits which have the possibility of becoming entrenched through their transformation into real economic rent; and third, landed property must exist separated from capital in order to transform such surplus profits into rent. In other words, a capital/landed property relation must exist. It should also be kept in mind, although this should be clear, that the fact that landed property might exist, does not imply in any way that a class of landowners (a collectivity of individuals) also exists within a particular social formation. In a similar manner, the existence of capital does not of necessity imply the existence of a class of individual capitalists. The functions of capital of landed property may be fulfilled by the state, by corporations, or by any number of agencies. The bases of classes need not take the forms of actual collectivities in any given social formation. The existence of landed property is the necessary (but not sufficient) condition of existence of a class of landlords.
(26-27)
Having arrived at the end of our examination of Marx’s theorisation of landed property, it seems clear that capitalist production relations may, but need not, include a capital/landed property relation as well as a capital/ wage-labour relation. The existence of a landed class does not imply either the existence of, or the remains of, feudalism. The process of capitalist development can only correctly be understood on this basis.
(32)
End Notes & References:
- Neocosmos, M. (1986). Marx’s third class: Capitalist landed property and capitalist development. The Journal of Peasant Studies, 13(3), 5–44. doi:10.1080/03066158608438299. URL:: sci-hub.st/10.1080/03066158608438299
- (1) Susumu Takenaga (2018) Marx on rent: new insights from the new MEGA, The European Journal of the History of Economic Thought, 25:5, 926-960, DOI: 10.1080/09672567.2018.1523936. (2) Ben Fine (2019) Marx’s rent theory revisited? Landed property, nature and value, Economy and Society, 48:3, 450-461, DOI: 10.1080/03085147.2019.1663052. (3) Basu, Deepankar (2018) : Marx’s analysis of ground-rent: Theory, examples and applications, Working Paper, No. 2018-04, University of Massachusetts, Department of Economics, Amherst, MA. URL: https://www.econstor.eu/handle/10419/202937.
- Lian Campling & Elizabeth Havice (2014) The problem of property in industrial fisheries, The Journal of Peasant Studies, 41: 5, 712, DOI: 10.1080/03066150.2014.894909.
- Heinrich, An Introduction to Karl Marx’s Capital, p. 184.
- “Marx argues that as capitalism develops at a slower rate in agriculture, the organic composition of capital (c/v) will be lower in agriculture than in industry (which is only another way of saying that the productivity of social labor is lower in agriculture than in industry). Assuming an equal rate of exploitation (s/v) in the two spheres, the value of agricultural commodities will be higher than their price of production (1865: 758-9]” (23)