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 definitively established division may not yet exist.

According to Marx, the principal division of the product is its division into necessary and surplus products. A certain portion of this surplus product constitutes land rent—namely, that portion which remains after deducting the 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 all the capital invested in the enterprise.

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

Rent is extracted from the farmers by the 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 the 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 should not be called rent). Secondly, absolute rent can be extracted from the surplus profit on agricultural capital because of the following circumstance. In agriculture, technique is less advanced, and 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 land ownership prevents the equalization of the high profit in agriculture and the low profit in industry. From the higher agricultural profit, which has not undergone equalization, absolute rent in the proper sense is extracted. Its source is the rise in grain prices. Differential rent, on the other hand, is extracted from the product. Recent years, characterized by the drawing of new countries into commerce, have led to crisis.

The price of land represents anticipated, calculated rent. Therefore, it is considered as income from a certain capital. When purchasing land, one must expend capital, which is capable of yielding 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 of Agricultural Development in Russia*, is devoted to the theory of rent, and on this question Maslov stands at 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 simplistically—not as a process creating particular historical conditions, but as a process creating natural conditions; therefore, it reasoned: rent is formed by virtue of the necessity of transition from the best plots of land to the worst. But there can be a reverse transition as well, since improvements do occur. The critics have retreated from Marx back to bourgeois economics.

Another narrow understanding of the theory of rent is the conflation of the law of differential rent formation with the law of decreasing soil fertility, as a result of which profit supposedly diminishes on the same plot of land. Ricardo explains the transition from better plots to worse plots by the impossibility of applying ever larger amounts of capital. Among Russian "critics," all have stood in defense of the theory of decreasing soil fertility, just as Maslov has, who in other questions wishes to remain a Marxist. But the arguments in defense of this theory go no further than quips, such as the one that if one does not acknowledge this theory, then one must acknowledge that one could feed an entire state from a single patch of land.

Marx fought against this theory. It views the expenditure of capital arithmetically and falls into error by ignoring the conditions of the general economy. If one were to suppose that the application of ever larger amounts of capital were always possible, then it would be correct, but such a thing presupposes a 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 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 would require increasing that area. If, however, the land is subjected to rational cultivation, this should only improve production, so Marx concludes that not only is there no disadvantage in this respect with land, but the contrary. It is precisely this "if" that the opponents of Marx's theory ignored. Thus Maslov, as a purported Marxist, can mislead many with his views on this question. His book represents one of countless examples in our time—going backward instead of forward.

The agricultural population is decreasing absolutely, but agricultural production is progressing. During the nineteenth century, this progress was closely linked with the growth of commodity agriculture. It characterizes one of the fundamental traits of the present capitalist order, manifesting itself in the creation of competition in agriculture, 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, making it impossible to utilize all the productive forces of new, scientific agriculture. Capitalism creates large-scale production, competition, accompanied by the squandering of the productive forces of the land. The concentration of population in cities causes depopulated countryside, creates abnormal metabolism. The cultivation of land does not improve, or does not improve as it should.

Socialist critique has long drawn attention to this (Marx). Mr. Hertz, and in our Russia later Messrs. Bulgakov, Chernov, Struve have indicated that Marx's theory, which relied on Liebig, is outdated. This opinion of the "critics" is completely erroneous. The violation by capitalism of the balance between the exploitation of land and the fertilization of land is beyond doubt (the role of the separation of city from countryside). Among many writers who favor not Marxist theory but its "critique," 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, that it is not returned what is taken from it. Artificial and animal fertilizer is necessary. On average, of 60,000 kilograms of fertilizer used per hectare of land, it is required that 1/3 be natural fertilizer, but the present system of agriculture is incapable 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 condition of agricultural wage laborers remains oppressed. Oppression has intensified and has come to require greater struggle.

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