## General Theory

Marx's theory of the development of the capitalist mode of production applies to agriculture just as it does to industry. One must not confuse the fundamental characteristics of capitalism with its various forms in agriculture and industry.

Let us examine what constitutes the characteristic fundamental features and particular forms of the process that creates the capitalist system of agriculture. The cause of the emergence of this process is twofold: 1) commodity production and 2) the fact that what becomes a commodity is not the product, but labor-power itself. When this force is drawn into exchange, all production becomes capitalist, and a special class of proletariat is created. The growth of commodity production and the development of wage labor in agriculture occurs in a different form than in industry; therefore, the application of Marx's theory to agriculture might appear incorrect, but one must understand the form in which agriculture becomes capitalist. For this, above all, two phenomena must be clarified:

I. How does commercial agriculture grow? and

II. How does the formation of the working class manifest itself?

I. The fundamental phenomenon of this process is the rapid growth of the industrial population and the bringing of objects of production onto the market. Consequently, for the broad development of commodity agriculture, a broad development of the non-agricultural population is necessary. This process manifests itself in various forms and is observed in countries that both import and export grain. The rapid growth of the industrial population creates a shortage of grain in industrial countries—that is, the impossibility of doing without grain imports from other countries, given an unchanged system of technique. The increase in demand for grain, given private property in all land, leads to the formation of a monopoly price.

This is important for explaining rent.

The very process of the formation of commercial agriculture does not occur quite as it does in factory industry: in industry this occurs in a simple and straightforward manner, but in agriculture we see something different: there a mixture of commercial and non-commercial agriculture predominates. Here different forms are joined together. What is brought to market is mainly one particular product in each given locality. On the one hand, the production of both the landlord and especially the peasant is commodity production; on the other, it retains its consumption character.

The necessity of obtaining money brings about the transition from natural economy to commercial economy. The power of money weighs upon peasants not only in Western Europe, but also in Russia. Zemstvo statistics show that even where the remnants of patriarchal economy are very strong, the subjection of the peasant to the market reaches enormous proportions.

II. The process of the formation of the class of wage laborers represents the disintegration of the peasantry into 2 strata: 1) farmers, who view agriculture as an industry, and 2) wage laborers. This process is often called the differentiation of the peasantry. In Russia in particular this process emerged very strikingly. It was noticed even during the times of the feudal economic system by economists.

## Peculiarities of Formation

This process occurs unevenly. Together with the formation of the class of wage laborers we see the existence of the patriarchal system and the formation of a new, capitalist system. The wage laborer class is connected to the land in one way or another: the forms of the process, consequently, will be very diverse.

## On the Domination of Capitalist Agriculture

### Rent

The population of a capitalist country is divided into 3 classes: 1) wage laborers, 2) landowners, and 3) capitalists. In studying the system one must disregard local peculiarities where such a definite division may not yet exist.

The principal division of the product, according to Marx, is the division into necessary and surplus products. A known part of this surplus product constitutes land rent—precisely that part which remains after deducting average profit on capital. And average profit is formed in developed capitalist society under the influence of competition, which distributes the surplus product among capitalists not in proportion to the number of workers, but in proportion to the size of the total capital invested in the enterprise.

Marx examines the formation of average profit in Volume III of *Capital*. On plots of different fertility, capital will yield different profits: on the worst land, profit will be smaller; on the best land, larger—surplus profit. (Even before Marx, Ricardo laid the foundation for rent theory.) Because of the monopoly of prices on the grain market and the general insufficient quantity of grain, the price is determined by the worst plot of land. The excess profit obtained on land of better quality or on land lying close to the market, compared with the worst and most distant land, is called differential rent, according to Marx.

Rent is extracted from farmers by landowners.

The varying magnitude of surplus profit can be of 2 kinds: 1) that which arises from differences in fertility, and 2) that which arises from different applications of capital. Furthermore, besides the monopoly of private farming on land, there exists a monopoly of private property in land: the landowner can refuse to give land to the farmer until the price of grain rises, and then he takes absolute rent, which represents an elementary monopoly. It can be: 1) a monopoly in its pure form (then, strictly analyzing it, it should not be called rent). In the 2nd place, absolute rent can be extracted from surplus profit on agricultural capital because of the following circumstance. In agriculture, technique is lower, therefore the share of variable (= profit-creating) capital is higher than in industry. Therefore, the share of profit should be higher in agriculture than in industry. And so the monopoly of landownership prevents the equalization of high profit in agriculture and low profit in industry. From the higher agricultural profit, which has not been subjected to equalization, absolute rent in the proper sense is extracted. Its source is the rise in the price of grain. Differential rent, on the other hand, is extracted from the product. The recent years, characterized by the drawing into trade of new countries, have led to a crisis.

The price of land represents accounted-for, anticipated rent. Therefore it is considered as income from a certain capital. When buying land one must expend capital that could yield income of average rent. Therefore the rapid course of industrial development greatly inflated rent in Europe and consolidated it.

The greater part of Maslov's recently published book *The Conditions for the Development of Agriculture in Russia* is devoted to rent theory, and on this question Maslov stands on a completely erroneous point of view, repeating the arguments of bourgeois so-called "critics" of Marx, such as Mr. Bulgakov and others. Marx showed that old English political economy viewed this question too simply—not as a process creating particular historical conditions, but as a process creating natural conditions; therefore it reasoned: rent is formed by necessity in the transition from better plots of land to worse ones. But there is also a reverse transition, since there are improvements. The critics moved backward from Marx to bourgeois economics.

Another narrow understanding of rent theory is the combining of the law of differential rent formation with the law of the decrease in soil fertility, as a result of which profit supposedly decreases on one and the same plot of land. Ricardo explains the transition from better plots to worse ones by the impossibility of applying ever greater and greater capital. Among Russian "critics," all have come to the defense of the theory of decreasing soil fertility, just as Maslov has, who on other questions wishes to remain a Marxist. But the arguments in defense of this theory did not go beyond witticisms, such as the one that if one does not recognize this theory, then one must recognize that a single plot of land could feed an entire state.

Marx fought against this theory. It views the expenditure of capital arithmetically and falls into the error of ignoring the conditions of the general economy. If we assume that the application of ever greater capital is always possible, then it would be correct, but such a thing presupposes the transformation of systems, and systems in agriculture are maintained for centuries, and this has placed the application of capital within definite boundaries. If technique does not change, then further application of capital is either impossible or possible only within narrow limits. Marx points out that in industry too one cannot develop production on a given area of land without limit: if an enterprise occupies a definite area of land, then to develop it, one would need to increase it. But if land is subjected to rational working, this should only improve production, so that Marx concludes that not only is there no disadvantage in this regard with land, but quite the opposite. It is precisely this "if" that the opponents of Marx's theory ignored. Thus Maslov, as an alleged Marxist, can mislead many with his views on this question. His book represents one of countless examples in our time—moving backward instead of forward.

The agricultural population decreases absolutely, but agricultural production progresses. During the nineteenth century this progress was closely connected with the growth of commodity agriculture. It characterizes one of the fundamental features of the present capitalist system, manifesting itself in the fact that competition in agriculture is created, a market for it, and differentiation of the population. It gave a powerful impetus to the development of agriculture, but each step of progress was accompanied by the emergence of contradictions that make it impossible to utilize all the productive forces of new, scientific agriculture. Capitalism creates large-scale production, competition, attended by the squandering of the productive forces of the land. The concentration of population in cities causes depopulated lands; an abnormal metabolism is created. The working of the land does not improve, or does not improve as it ought to improve.

Socialist criticism drew attention to this long ago (Marx). Mr. Hertz, and later in Russia, Messrs. Bulgakov, Chernov, and Struve indicated that Marx's theory, relying on Liebig, had become obsolete. This opinion of the "critics" is completely erroneous. The violation by capitalism of the equilibrium between the exploitation of land and the fertilization of land is beyond question (the role of the separation of city from country). In many writers sympathetic not to Marxist theory but to "criticism" of it, their own data speak against them. For example, Nossig. According to his data it turns out that the productive forces of the land are not compensated for, that it is not returned what is taken from it. Artificial and animal fertilizers are necessary. On average, out of 60,000 kilograms of fertilizer used per hectare of land, 1/3 must be natural fertilizer, but the present system of agriculture is not capable of providing this.

Thus, the influence of capitalism in agriculture manifests itself in the following:

It demands the freedom of the wage laborer and displaces all forms of old bondage. But the position of agricultural wage laborers remains oppressed. Oppression has intensified and has come to demand greater struggle.

Capitalism has increased to enormous proportions the tribute extracted by the landowner, the magnitude of differential and absolute rent. Inflated rent creates an obstacle to the further growth of agriculture.