IX. Notes on the History of the Discovery of the So-Called Ricardian Law of Rent. Supplementary Notes on Rodbertus (Digression)

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[1. The Discovery of the Law of Differential Rent by Anderson. Distortion of Anderson’s Views by His Plagiarist, Malthus, in the Interests of the Landowners][edit source]

Anderson was a practical farmer. His first work, in which the nature of rent is discussed in passing, appeared in 1777, at a time when, for a large section of the public, Sir James Steuart was still the leading economist, and while everyone’s attention was focused on the Wealth of Nations, which had appeared a year earlier. As against this, the work of the Scottish farmer, which had been occasioned by an immediate practical controversy and which did not ex professo deal with rent but only incidentally elucidated its nature, could not attract any attention. In this work, Anderson only dealt with rent accidentally, not ex professo. This theory of his appears again, in the same incidental fashion, in one or two of his collected essays which he himself published in three volumes under the title of: Essays Relating to Agriculture and Rural Affairs, 3 vols., Edinburgh, 1775-1796. Similarly in his Recreations in Agriculture, Natural History, Arts, etc., London (to be looked up in the British Museum) which were published in the years 1799 to 1802, all these writings are directly intended for farmers and agriculturists. [It would have been] different if Anderson had had an inkling of the importance of his find and had put it before the public separately, as an “Inquiry into the Nature of Rent”, or if he had had the least bit of talent in trading his own ideas, as his fellow countryman, McCulloch, did so successfully with other people’s. The reproductions of his theory which appeared in 1815 were published forthwith as independent theoretical inquiries into the nature of rent, as the very titles of the respective works of West and Malthus show:

Malthus: An Inquiry into the Nature and Progress of Rent.

West: Essay on the Application of Capital to Land.

Furthermore, Malthus used the Andersonian theory of rent to give his population law, for the first time, both an economic and a real (natural-historical) basis, while the nonsense about geometrical and arithmetical progression borrowed from earlier writers, was a purely imaginary hypothesis. Mr. Malthus at once “improved” the matter, Ricardo even made this doctrine of rent, as he himself says in his preface, one of the most important links in the whole system of political economy and—quite apart from the practical aspect—gave it an entirely new theoretical importance.

Ricardo evidently did not know Anderson since, in the preface to his Principles of Political Economy, he treats West and Malthus as the originators. Judging by the original manner in which he presents the law, West was possibly as little acquainted with Anderson as Tooke was with Steuart. With Mr. Malthus it is different. A close comparison of his writings shows that he knows and uses Anderson. He was in fact plagiarist by ||496| profession. One need only compare the first edition of his work on population with the work of the Reverend Townsend which I have quoted previously, to he convinced that he does not work him over as an independent producer, but copies him and paraphrases him like a slavish plagiarist, although he does not mention him anywhere by name and conceals his existence.

The manner in which Malthus used Anderson is characteristic. Anderson had defended premiums on exports of corn and duties on corn imports, not out of any interest for the landlords, but because he believed that this type of legislation “would reduce the average price of corn” and ensure an even development of the productive forces in agriculture. Malthus accepted this practical application of Anderson’s because—being a staunch member of the Established Church of England—he was a professional sycophant of the landed aristocracy, whose rents, sinecures, squandering, heartlessness etc. he justified economically. Malthus defends the interests of the industrial bourgeoisie only in so far as these are identical with the interests of landed property, of the aristocracy, i.e., against the mass of the people, the proletariat. But where these interests diverge and are antagonistic to each other, he sides with the aristocracy against the bourgeoisie. Hence his defence of the “unproductive worker”, over-consumption etc.

Anderson, on the other hand, explained the difference between land which pays rent and that which does not, or between lands which pay varying rents, by the relatively low fertility of the land which hears no rent or a smaller rent compared with that which bears a rent or a greater rent. But he stated expressly that these degrees of relative productivity of different types of land, i.e., also the relatively low productivity of the worse types of land compared with the better, had absolutely nothing to do with the absolute productivity of agriculture. On the contrary, he stressed not only that the absolute productivity 0f all types of land could he constantly improved and must be improved with the progress in population, but he went further and asserted that the differences in productivity of various types of land can be progressively reduced. He said that the present degree of development of agriculture in England gives no indication at all of its possibilities. That is why he said that in one country the prices of corn may be high and rent Low, while in another country the price of corn may be low and rent may he high, and this is in accordance with his principle, since the level and the existence of rents is in both countries determined by the difference between the fertile and the unfertile land, in neither of them by the absolute fertility; in each only by the degree of difference in fertility of the existing types of land, and not by the average fertility of these types of land, From this he concluded that the absolute fertility of agriculture has nothing to do with rent. Hence later, as we shall see below, he declared himself a decided adversary of the Malthusian theory of population and it never dawned on him that his own theory of rent was to serve as the basis of this monstrosity. Anderson reasoned that the rise in corn prices in England between 1750 and 1801 as compared with the years 1700 to 1750 was by no means due to the cultivation of progressively less fertile types of land, but to the influence of legislation on agriculture during these two periods.

What then did Malthus do?

Instead of his (also plagiarised) chimera of the geometrical and arithmetical progression, which he retained as a “phrase”, he made Anderson’s theory the confirmation of his population theory. He retained Anderson’s practical application of the theory in so far as it was in the interests of the landlords—this fact alone proves that he understood as little of the connection of this theory with the system of bourgeois economy as Anderson himself. Without going into the counter-evidence which the discoverer of the theory put forward, he turned it against the proletariat. The theoretical and practical advance which could have been made from this theory was: theoretical—for the determination of the value of the commodity etc. and gaining an insight into the nature of landownership; practical—against the necessity of private ownership of the land, on the basis of bourgeois production and, more immediately, against all state regulations such as corn laws, which enhanced this ownership of land. These advances from Anderson’s theory, Malthus left to Ricardo. The one practical conclusion which he drew from it was a defence of the protective tariffs which the landlords demanded in 1815— a sycophantic service for the aristocracy and a new justification for the poverty of the producers of wealth, a new apology for the exploiters of labour. In this respect it was a sycophantic service for the industrial capitalists.

Utter baseness is a distinctive trait of Malthus—a baseness which can only he indulged in by a parson ||497| who sees human suffering as the punishment for sin and who, in any ease, needs a “vale of tears on earth”, but who, at the same time, in view of the living he draws and aided by the dogma of predestination, finds it altogether advantageous to “sweeten” their sojourn in the vale of tears for the ruling classes. The “baseness” of this mind is also evident in his scientific work. Firstly in his shameless and mechanical plagiarism. Secondly in the cautious, not radical, conclusions which he draws from scientific premises.

[2. Ricardo’s Fundamental Principle in Assessing Economic Phenomena Is the Development of the Productive Forces. Malthus Defends the Most Reactionary Elements of the Ruling Classes. Virtual Refutation of Malthus’s Theory of Population by Darwin][edit source]

Ricardo, rightly for his time, regards the capitalist mode of production as the most advantageous for production in general, as the most advantageous for the creation of wealth. He wants production for the sake of production and this with good reason. To assert, as sentimental opponents of Ricardo’s did, that production as such is not the object, is to forget that production for its own sake means nothing but the development of human productive forces, in other words the development of the richness of human nature as an end in itself. To oppose the welfare of the individual to this end, as Sismondi does, is to assert that the development of the species must be arrested in order to safeguard the welfare of the individual, so that, for instance, no war may be waged in which at all events some individuals perish. Sismondi is only right as against the economists who conceal or deny this contradiction.) Apart from the barrenness of such edifying reflections, they reveal a failure to understand the fact that, although at first the development of the capacities of the human species takes place at the cost of the majority of human individuals and even classes, in the end it breaks through this contradiction and coincides with the development of the individual; the higher development of individuality is thus only achieved by a historical process during which individuals are sacrificed for the interests of the species in the human kingdom, as in the animal and plant kingdoms, always assert themselves at the cost of the interests of individuals, because these interests of the species coincide only with the interests of certain individuals, and it is this coincidence which constitutes the strength of these privileged individuals.

Thus Ricardo’s ruthlessness was not only scientifically honest but also a scientific necessity from his point of view. But because of this it is also quite immaterial to him whether the advance of the productive forces slays landed property or workers. If this progress devalues the capital of the industrial bourgeoisie it is equally welcome to him. If the development of the productive power of labour halves the value of the existing fixed capital, what does it matter, says Ricardo. The productivity of human labour has doubled, Thus here is scientific honesty. Ricardo’s conception is, on the whole, in the interests of the industrial bourgeoisie, only because, and in so far as their interests coincide with that of production or the productive development of human labour. Where the bourgeoisie comes into conflict with this, he is just as ruthless towards it as he is at other times towards the proletariat and the aristocracy.

But Malthus! This wretch only draws such conclusions from the given scientific premises (which he invariably steals), as will be ‘agreeable” (useful) to the aristocracy against the bourgeoisie and to both against the proletariat. Hence he does not want production for the sake of production, but only in so far as it maintains or extends the status quo, and serves the interests of the ruling classes.

Already his first work, one of the most remarkable literary examples of the success of plagiarism at the cost of the original work, had the practical purpose to provide “economic” proof, in the interests of the existing English government and the landed aristocracy that the tendency of the French Revolution and its adherents in England to perfect matters was utopian. In other words, it was a panegyric pamphlet for the existing conditions, against historical development and, furthermore, a justification of the war against revolutionary France.

His writings of 1815, on protective tariffs and rent, were partly means to confirm the earlier apology of the poverty of the producers, in particular, however, to defend reactionary landed property against ‘enlightened’ “literal” and “progressive” capital and especially to justify an intended retrogressive step in English legislation in the interests of the aristocracy against the industrial bourgeoisie. Finally, ||498| his Principles of Political Economy directed against Ricardo had essentially the purpose of reducing the absolute demands of ‘industrial capital” and the laws under which its productivity develops, to the ‘desirable limits” “favourable” to the existing interests of the landed aristocracy, the “Established Church” (to which Mal-thus belonged), government pensioners and consumers of taxes. But when a man seeks to accommodate science to a viewpoint which is derived not from science itself (however erroneous it may be) but from outside, from alien, external interests, then 1 call him “base”.

It is not a base action when Ricardo puts the proletariat on the same level as machinery or beasts of burden or commodities because (from his point of view) their being purely machinery or beasts of burden is conducive to “production” or because they really are mere commodities in bourgeois production. This is stoic, objective, scientific. In so far as it does not involve sinning against his science, Ricardo is always a philanthropist, just as he was in practice too.

The parson Malthus on the other hand, reduces the worker to a beast of burden for the sake of production and even condemns bin to death from starvation and to celibacy. But when these same demands of production curtail the landlord’s “rent” or threaten to encroach on the ‘tithes” of the Established Church, or on the interests of the “consumers of taxes”; and also when that part of the industrial bourgeoisie whose interests stand in the way of progress is being sacrificed to that part which represents the advance of production—and therefore whenever it is a question of the interests of the aristocracy against the bourgeoisie or of the conservative and stagnant bourgeoisie against the progressive—in all these instances “parson” Malthus does not sacrifice the particular interests to production but seeks, as far as he can, to sacrifice the demands of production to the particular interests of existing ruling classes or sections of classes. And to this end he falsifies his scientific conclusions. This is his scientific baseness, his sin against science, quite apart from his shameless and mechanical plagiarism. The scientific conclusions of Malthus are ‘considerate” towards the ruling classes in general and towards the reactionary elements of the ruling classes in particular; in other words he falsifies science for these interests, But his conclusions are ruthless as far as they concern the subjugated classes. He is not only ruthless; he affects ruthlessness; he takes a cynical pleasure in it and exaggerates his conclusions in so far as they are directed against the poor wretches, even beyond the point which would be scientifically justified from his point of view.[1]

The hatred of the English working classes for Malthus—the “mountebank-parson” as Cobbett rudely called him (Cobbett, though England’s greatest political writer of this century, lacked the Leipzig professorial scholarship and was a pronounced enemy of the “learned language”)—was thus fully justified and the people’s instinct was correct here, in that they felt he was no man of science, but a bought advocate of their opponents, a shameless sycophant of the ruling classes.

The inventor of an idea may exaggerate it in all honesty; when the plagiarist exaggerates it, he always makes “a business” of such an exaggeration.

Because the first edition of Malthus’s work On Population contains not a single new scientific word, it is to be regarded purely as an obtrusive Capuchin’s sermon, an Abraham a Santa Clara version of the discoveries of Townsend, Steuart, Wallace, Herbert etc. Since in fact it only wants to impress by its popular form, popular hate rightly turns against it.

As compared to the wretched bourgeois economists who preach harmony, Malthus’s only merit lies in his pointed emphasis on the disharmonies, which, though none of them were discovered by him were all emphasised, amplified and publicised by him with complacent sacerdotal cynicism.


||499| Charles Darwin, in the introduction to his On the Origin of Species by Means of Natural Selection, or the Preservation of Favoured Races in the Struggle for Life (5th thousand), London, 1860, says the following:

“In the next chapter the Struggle for Existence amongst all organic beings throughout the world, which inevitably follows from the high geometrical ratio of their increase, will be treated of. This is the doctrine of Malthus applied to the whole animal and vegetable kingdoms” (pp. 4-5).

In his splendid work, Darwin did not realise that by discovering the “geometrical” progression in the animal and plant kingdom, he overthrew Malthus’s theory. Malthus’s theory is based on the fact that he set Wallace’s geometrical progression of man against the chimerical “arithmetical” progression of animals and plants. In Darwin’s work, for instance on the extinction of species, we also find quite apart from his fundamental principle) the detailed refutation, based on natural history, of the Malthusian theory. But in so far as Malthus’s theory rests upon Anderson’s theory of rent, it was refuted by Anderson himself. |499||

[3. Roscher’s Falsification of the History of Views on Ground-Rent. Examples of Ricardo’s Scientific Impartiality. Rent from Capital Investment in Land and Rent from the Exploitation of Other Elements of Nature. The Twofold Influence of Competition][edit source]

||499| Anderson’s first publication, in which he develops the theory of rent as a by-product, was a practical polemic, not on rent but on protection. It appeared in 1777 and its very title, An Enquiry into the Nature of the Corn Laws, with a View to the New Corn Bill Proposed for Scotland, Edinburgh, 1777, shows firstly, that it pursues a practical purpose, secondly, that it is related to an imminent act of legislation, in which the interests of the manufacturers and the landlords are diametrically opposed.

The law of 1773 (in England; to be looked up in McCulloch’s Catalogue), was due (so it appears) to be introduced into Scotland in 1777 (see in the Museum).

“The law of 1773 was constructed,” says Anderson, wilt the “avowed intention of lowering the price of corn to our manufacturers, by encouraging the importation of corn from abroad[2] for the purpose of feeding[3] our own people at a cheaper rate.” James Anderson, A Calm Investigation of the Circumstances that have led to the Present Scarcity of Grain in Britain, London, 1801, p. 50.)

Thus Anderson’s publication was a polemic on behalf of the interests of the agriculturists (protection) (inclusive of the landlords) against the interests of the manufacturers. And he published it “avowedly” as such a partisan piece of writing. The theory of rent comes in here only incidentally. In his later writings which are to a greater or lesser degree continuously concerned with this battle of interests he merely repeats the theory of rent once or twice in passing. He never pretends to a scientific interest in it and it does not even become an independent subject in his presentation. Accordingly one may judge the correctness of the following remarks of Wilhelm Thukydides Roscher who was evidently not acquainted with Anderson’s writings:

“Remarkable, how a doctrine which in 1777 remained almost unnoticed, was immediately defended and attacked with the greatest interest in 1815 and the following years because it touched upon the contradiction between monied and landed interest which had meanwhile so sharply developed.” (Die Grundlagen der Nationalökonomie, 3rd edition, 1858, pp. 207-98.)

This sentence contains as many falsehoods as words. Firstly, unlike West, Malthus and Ricardo, Anderson did not put forward his opinion as a “doctrine”. Secondly, it remained not ‘almost”, but “entirely” unnoticed. Thirdly, it first came in incidentally in a work whose s o l e purpose it was to deal with the contradiction between manufacturers and landlords—a contradiction which was considerably developed in 1777 and the ‘work only “touched upon” this practical battle of interests and left “untouched” the general ||500| theory of political economy. Fourthly, in 1815 one of the reproducers of this theory, Malthus, expounded it just as much in support of the corn laws as Anderson had done. The same doctrine was used in support of landed property by its discoverer and [by] Malthus, but was turned against landed property by Ricardo. Thus, at most, one might say that some of those who put it forward were defending the interests of landed property while others who put it forward fought those same interests, but one could not say that this theory was attacked by the defenders of landed property in 1815 (for Malthus defended it before Ricardo), or that it was defended by the attackers of landed property for Ricardo did not have to “defend” this theory against Malthus, since he himself regarded Malthus as one of its discoverers and as his own forerunner. He only had to “combat” the practical conclusions that were drawn by Malthus). Fifthly, the contradiction between “monied” and “landed interest”, ‘touched upon” by Wilhelm Thukydides Roscher had up to that moment, absolutely nothing to do either with Anderson’s theory of rent or with its reproduction, defence and attack. As Wilhelm Thukydides could have gathered from John Stuart Mill (Essays on Some Unsettled Questions of Political Economy, London, 1844, pp. 109-10), by “monied class” the Englishman understands l. the money-lenders; and 2. these money-lenders are people who either live altogether on interest or are money-lenders by profession, such as bankers, bill-brokers etc. Mill also observes that all these people who form the “monied class” are opposed to, or at any rate are distinct from, the “producing class” (by which Mill understands “industrial capitalists” besides the working men). Hence Wilhelm Thukydides should see that the interests of the “producing class”, including the manufacturers, the industrial capitalists, and the interests of the monied class are two very different matters and that these classes are different classes. Furthermore, Wilhelm Thukydides should see that a battle between the industrial capitalists and the landlords was thus by no means a battle between the “monied interest” and the “landed interest”. If Wilhelm Thukydides knew the history of the corn laws of 1815 and the struggle over these, then he would already have known from Cobbett that the borough-mongers (landed interest) and the loan-mongers (monied interest) combined against the industrial interest. But Cobbett is “crude”. Furthermore, Wilhelm Thukydides should know from the history of 1815 to 1847 that in the battle over the corn laws, the majority of the monied interest and some even of the commercial interest (Liverpool for instance) were to be found amongst the allies of the landed interest against the manufacturing interest. |500|| ||502| (At most Herr Roscher might have been surprised that the same “doctrine” served in favour of “landed interest” in 1777 and against it in 1815 and that it caused a stir only then. |502|| ||500| If I were to elucidate in equal detail all similar gross falsifications of history which Wilhelm Thukydides commits in his literary historical notes, then I would have to write as fat a volume as his Grundlagen, and indeed, such a work would not be worth the paper it was written upon”. But the harmful effects which such learned ignorance as that of a Wilhelm Thukydides can have on researchers in other fields of knowledge, can be seen in the example of Herr Adolf Bastian. In his work Der Mensch in der Geschichte, 1860, Vol. I, p. 374, Note, he quotes the above sentence of Wilhelm Thukydides as documentary proof for a “psychological” assertion. Incidentally, one cannot say of Bastian that “materiam superabat opus[4]. Rather, in this case, the “opus” does not master its own raw material. Besides, I have found out through the few sciences which I “know”, that Herr Bastion who knows “all” sciences, very often relies on such authorities as Wilhelm Thukydides, which is in any case unavoidable in a “pantologist’. ||501| I hope I shall not be accused of “unkindness” towards Wilhelm Thukydides. Note the “unkindness” with which this pedant himself treats science! Anyhow, I have the same right to speak of his “total untruths” as he has to speak in his self-satisfied and condescending manner of Ricardo’s “half-truths”. Furthermore, Wilhelm Thukydides is by no means “honest” in his research and cataloguing. Anyone who is not “respectable” does not exist for him historically either. For instance, Rodbertus does not exist for him as a theoretician of rent because he is a ‘communist”. Besides, Wilhelm Thukydides is also inaccurate when it comes to “respectable writers”. For instance, Bailey exists for McCulloch, who even regards his work as epoch-making. For Wilhelm Thukydides he does not exist. If the science |502| of political economy is to he furthered and popularised in Germany, people like Rodbertus should found a journal which would be open to all scholars (not pedants, prigs and vulgarisers) and whose main purpose it would be to demonstrate the ignorance of the specialists in the science itself as well as in its history. |502||


||501| Anderson was in no way concerned with any inquiry into the relationship of his theory of rent to the system of political economy. This is not in the least surprising, since his first book appeared one year after Adam Smith’s Wealth of Nations, i.e., at a moment when the “system of political economy” was only first being consolidated, for Steuart’s system too had only appeared a few years before, But so far as the material is concerned, which Anderson examined, within the confines of the specific subject he was considering, this was decidedly more extensive than Ricardo’s. Just as in his theory of money, the reproduction of Hume’s theory, Ricardo specifically only took into account the events from 1797 to 1809, so in the theory of rent, the reproduction of Anderson’s theory, he considered only the economic phenomena relating to the rise in corn prices between 1800 and 1815.


The following paragraphs are very important because they clearly reflect Ricardo’s character:

“I shall […] greatly regret that considerations for any particular class, are allowed to cheek the progress of the wealth and population of he country.” (David Ricardo, An Essay on the Influence of a Low Price of Corn on the Profits of Stock, second edition, London, 1815, p. 49.)

With free import of corn, “land is abandoned” (l.c., p. 46). In other words landed property is sacrificed to the development of production. In connection with the free import of corn (he writes) however:

“That some capital would be lost cannot be disputed, but is the possession or preservation of capital the end, or the means? The means, undoubtedly. What we want is an abundance of commodities” (wealth in general) “and if it could he proved that by the sacrifice of a part of our capital we should augment the annual produce of those objects which contribute to our enjoyment and happiness we ought not […] to repine at the loss of a part of our capital,” David Ricardo, On Protection to Agriculture, 4th ed., London, 1822, p. 60.)

Ricardo terms as “our capital” that capital which belongs neither to us nor to him but which has been permanently invested in the land by the capitalists. But we signifies a cross-section of the nation. The increase in “our” wealth is the increase in social wealth, which is an end as such, irrespective of who are the participants in this wealth!

“To an individual with a capital of £20,000, whose profits were £2,000 per annum, it would be a mailer quite indifferent whether his capital would employ a hundred or a thousand men, whether the commodity produced, sold for £l0,000, or for £20,000, provided, in all cases, his profits were not diminished below £2,000. Is not the real interest of the nation similar? Provided its net real income, its rent and profits be the same, it is of no importance whether the nation consists of ten or of twelve millions of inhabitants.” (David Ricardo, On the Principles of Political Economy, and Taxation, third edition, London, 1821, p. 416.)

Here the “proletariat” is sacrificed to wealth. In so far as it is irrelevant to the existence of wealth, its existence is a matter of indifference to wealth. Here mass—mass of human beings— is worth nothing. These three instances exemplify ||502| Ricardo’s scientific impartiality.


{The element in which the capital employed in agriculture is invested, is the soil (nature) etc. Hence rent is here equal to the excess of the value of the product of labour created in this element, over its average price. If, on the other hand, an element of nature (or material) which is privately owned by an individual, is employed in another sphere of production whose (physical) basis it does not form, then the rent, if it only comes into being through the employment of this element, cannot consist in the excess of the value of this product over the average price, but only in the excess of the general average price of this product over its own overage price. For instance, a waterfall may replace the steam-engine for a manufacturer and save him consumption of coal. While in possession of this waterfall, he would, for instance, constantly be selling yarn above its overage price and making an excess profit. If the waterfall belongs to a landowner, this excess profit accrues to him as rent. In his hook on rent, Mr. Hopkins observes that in Lancashire the waterfalls not only yield rent but, according to the degree of the natural motive power, they yield differential rent. Here rent is purely the excess of the average market-price of the product over its individual average price.} |502||


||502| {In competition there are two distinct movements towards equalisation. Capitals within the same sphere of production equalise the prices of the commodities produced within this sphere to the same market-price, irrespective of the relationship of the value of these commodities to this price. The average market-price should equal the value of the commodity, [were] it not for the equalisation between different spheres of production. As between these different spheres, competition equalises the va1ues to the average prices, in so far as the reciprocal interaction of the capitals is not hampered, disrupted by a third element—landownership, etc.}

[4. Rodbertus’s Error Regarding the Relation Between Value and Surplus-Value When the Costs of Production Rise][edit source]

Rodbertus is altogether mistaken when he thinks that because one commodity is dearer than another, thus realising more labour-time, it must therefore—given the same rate of surplus-value or the equal exploitation of the workers in the different spheres—also contain more unpaid labour-time, surplus labour-time. If the same labour yields 1 quarter on unfertile land and 3 on fertile (in a good or a had year alike); if the same labour yields 1 oz of gold in land very rich in gold whereas in less rich or exhausted land it yields only 1/3 oz; if the same labour-time which produces 1 lb. of wool spins 3 lb. of wool, then, to begin with, the values of the 1 quarter and the 3 quarters, of the 1 oz of gold and the 1/3 oz, of the 1 lb. of wool and the 3 lbs. of woollen yarn (minus the value of the wool it contains) are of equal magnitude. They contain equal quantities of labour-time, therefore, according to the assumption, equal quantities of surplus labour-time. True, the quantity of surplus-labour embodied in the 1 quarter [grown on unfertile land] is greater, but then it is only 1 quarter whereas in the other case it is 3 quarters, or 1 lb. of wool whereas in the other case it is 3 lbs. of woollen yarn (minus the value of the material). The volume [of surplus-labour] is therefore the same, and the proportional quantity of surplus-value, comparing the individual commodities one with another, [is] also equal. According to the assumption, the amount of labour contained in the 1 quarter or the 1 lb. of wool, is the same as that contained in the 3 quarters or the 3 lbs. of yarn. The capital laid out in wages is therefore greater to exactly the same degree as the surplus-value. The 1 lb. of wool contains three times as much labour as the 1 lb. of yarn. Though the surplus-value is three times as great, the capital laid out in wages on which it is based is also three times as great. The proportion thus remains the some.

Rodbertus calculates quite wrongly here, or wrongly compares the capital laid out in wages with the ||503| greater or lesser quantity of commodities which these wages represent. But this calculation is completely wrong, if, as he presupposes, wages or the rote of surplus-value are given, The same quantity of labour, say, 12 hours, may result in x or 3x commodities. In one case, 1x commodities contain as much labour and surplus-labour as 3x in the other; but in no case would more than 1 working-day be spent and in no case would the rate of surplus-value be more than, say, 1/5. In the first instance 1/5 of the one x would be x to as in the second 1/5 of the 3x would be to 3x. And if we were to call each of the three x: x', x'', x''' then there would be 4/5 paid and 1/5 unpaid labour in each x', x'' x'''. It is quite right, on the other hand, that if just as much commodity were to be produced under the unproductive conditions as under “more productive, the commodity would contain more labour and so also more surplus-labour. But then, proportionately, a greater capital would also have to be laid out. In order to produce 3x, three times as much capital would have to he laid out (in wages) as is required to produce 1x.

Now it is true that manufacture cannot work up more raw material than agriculture supplies. Thus, for instance, it cannot spin more pounds of wool than have been produced. If the productivity in wool spinning is trebled, then, provided the conditions of the production of wool remained the same, three times as much time as previously would have to he spent, three times as much capital would have to be expended on labour in wool production, whereas only the same amount of the spinners’ labour-time would be required to spin up this trebled quantity of wool. But the rate [of surplus-value] would remain the same. The same spinning labour would have the same value as before and contain the same surplus-value. The wool-producing labour would have a trebled surplus-value but the labour embodied in it, or the capital advanced in wages, would accordingly have trebled as well. The three times greater surplus-value would thus be calculated on a three times greater capital. But this is no reason for saying that the rate of surplus-value is 1ower in spinning than in wool production. One would only say that the capital laid out in wages is three times as great in one as in the other (since it is assumed here that the changes in the spinning and in the production of wool are not due to any change in their constant capital).

It is necessary to make a distinction here. The same labour plus constant capital gives a smaller output in an unfavourable than a favourable season, in unproductive than in productive soil, in a poorer than in a richer mine. In the former case the product is thus dearer, contains more labour and more surplus-labour in the same number of products. But in the latter case, the number of these products is the greater. Furthermore, the ratio between paid and unpaid labour in each individual product in the two categories is not affected by this, for though the individual product contains less unpaid labour, according to the assumption, it also contains less paid labour in the same proportion. For it has been assumed here that there is no change in the proportions of the organic component parts of capital—of variable and constant capital. It is assumed that the same amount of variable and constant capital supplies varying, greater or smaller, quantities of product under varying conditions.

Herr Rodbertus appears to confuse this all the time, and as a matter of course to conclude from the mere increase in the price of the product that it contains a greater surplus-value. As to the rate, this is wrong even according to the assumption. As to the total, however, it is only right if more capital is advanced in one case than in the other, that means if as much is produced now of the dearer product as previously of the cheaper or if the increased quantity of the cheaper product (as above with spinning) presupposes a correspondingly increased quantity of the dearer product.

[5. Ricardo’s Denial of Absolute Rent—a Result of His Error in the Theory of Value][edit source]

||504| That rent, hence also the value of land, can rise, although the rate of rent remains the same or even decreases, that therefore the productivity of agriculture also increases—this Ricardo sometimes forgets, though he knows it. Anyhow, Anderson knows it and Petty and D’Avenant already knew it. That is not the question.

Ricardo abstracts from the question of absolute rent which he denies on theoretical grounds because he starts out from the false assumption that if the value of commodities is determined by labour-time, the average prices of commodities must equal their values (which is why he comes to the wrong practical conclusion. that competition from more fertile types of land must throw the less fertile out of cultivation, even if they bore rent previously). If values of commodities and average prices of commodities were identical then absolute rent—i.e., rent on the worst cultivated land or on that originally cultivated—would be equally impossible. What is the average price of the commodity? The total capital (constant plus variable) laid out in its production plus the labour-time contained in the average profit, say 10 per cent. Supposing, that a capital produced a higher value than the average price, just because it was operating in a particular element, an element of nature, say land, then the value of this commodity would be above its value and this excess value would contradict the conception of value being equal to a certain quantity of labour-time. An element of nature, something heterogeneous from social labour-time would he creating value. But this cannot be. Hence capital invested in land pure and simple cannot bear a rent. The worst land is land pure and simple. If the better land bears a rent, then this only shows that the difference between the individually necessary labour and that which is socially necessary becomes permanently established in agriculture because it has a natural basis, whereas in industry it is constantly disappearing.

Absolute rent cannot be permitted to exist, but only differential rent. To admit the existence of absolute rent would be to admit that the same quantity of labour (materialised, laid out in constant capital and bought with wages) creates varying values according to the element in which [the labour is expended] or according to the material which it works up. But if one admits this diversity in value although in each sphere of production the same amount of labour-time materialises itself in the product, then one admits that value is not determined by labour-time but by something heterogeneous. These different magnitudes of value would invalidate the concept of value, they would invalidate the proposition that the substance of value is social labour-time, hence its differences can only be quantitative and these quantitative differences can only be equal to the differences in the amounts of social labour-time applied.

The maintenance of value—the determination not only of the amount of value by the varying amount of labour-time, but also of the substance of value by social labour—thus requires the denial of absolute rent. The denial of absolute rent can, however, be expressed in two ways.

Firstly. The worst land cannot bear a rent. The rent from the better types of land can be explained as arising from the market-price which is the same for products which have been produced on more favourable types of land as for those which have been produced on less favourable. But the worst land is land pure and simple. It is not differentiated in itself. It differs from industrial capital investment only in that it is a special sphere of capital investment. If it bore a rent then this would arise from the fact that the same quantity of labour would produce different values, if applied in different spheres of production; this means that the quantity of labour in itself does not determine the value, and products which contain the same amount of labour are not equal [in terms of value]. ||505| [Secondly.] Or one might say that the land which was cultivated originally must not bear rent. For what is the originally cultivated land? The land which is “originally’ cultivated is neither better nor worse land; it is land pure and simple. Undifferentiated land. Originally, capital investment in agriculture can only differ from investment in industry because of the spheres in which these capitals are invested. But since equal quantities of labour are represented in equal values, there is absolutely no reason why the capital invested in land should yield a rent in addition to profit, unless the same quantity of labour applied in this sphere produced a higher value, so that the excess of this value over the value yielded in manufacture would produce an excess profit, equal to rent. But this would amount to saying that the land as such creates value, thus invalidating the concept of value itself.

The land which is cultivated originally therefore cannot originally bear a rent, if the whole theory of value is not to he discarded. Furthermore, this ties up very easily (although not necessarily, as Anderson shows) with the idea that originally people of course chose not the worst but rather the best land for cultivation, With the advance of civilisation and population, the land which originally hears no rent, does so at a later stage, because people are forced to descend to worse types of land and thus in this descent to Avernus, to ever worse land, rent must arise on the originally cultivated, most fertile land. And then, step by step, on the land which follows it, while the worst land which always represents simply land—the particular sphere of capital investment—never bears a rent. All this has a more or less logical coherence.

If, on the other hand, one knows that average prices and values are not identical, that the average price of a commodity may be either equal to its value or bigger or smal1er, then the question, the problem itself, disappears and with it also the hypotheses for its solution. The only remaining question is why, in agriculture, the value of the commodity, or at any rate its price, is above its average price though not above its value. But this question no longer bears any relation to the fundamentals of the theory, the determination of value as such.

Ricardo knows of course that the “relative values” of commodities are modified according to the varying proportion of fixed capital and capital laid out in wages, which enter into their production. <But these are not opposites; fixed capital and circulating capital are opposites, and circulating capital comprises not only wages but also raw materials and auxiliary materials. For example, the same ratio may exist between capital laid out in wages and fixed capital in the mining and fishing industries, as between that laid out in wages and in raw materials in tailoring.> But Ricardo also knows that these relative values are equalised by competition. In fact he only makes the differentiation, so that the same average profit should result from these different capital investments. In other words these relative values of which he speaks are only the average prices. It does not even occur to him that value and average price are different. He only gets as far as their identity. Since however this identity does not exist when the ratio of the organic component parts of capital varies, he accepts it as an unexplained fact brought about by competition. Hence too, he does not come up against the question: Why do the values of agricultural products not equalise in average prices? ||506| On the contrary he assumes that they do so and poses the problem from that point of view.

It is quite incomprehensible why fellows á la Wilhelm Thukydides should be so ardently for Ricardo’s theory of rent. From their point of view, Ricardo’s “half truths”, as Thukydides condescendingly calls then, lose their whole value.

For Ricardo the problem only exists because value is determined by labour-time. With those fellows this is not the case. According to Roscher, nature as such has value. See Later. In other words, he has absolutely no idea what value is. What prevents him therefore from allowing the value of land to enter into production costs from the outset and to form the rent; what prevents him from presupposing the value of land, i.e., rent as an explanation for rent?

With these fellows, the phrase “production costs” is meaningless. We see this with Say. The value of the commodity is determined by the costs of production, capital, land, labour. But these are determined by demand and supply. In other words, no determination is taking place. Since the land performs productive “services”, why should not the price of these “services” be determined by demand and supply, just as the services performed by labour or capital? And since the “land services” are in the possession of certain sellers, why should their article not have a market-price, in other words why should not rent exist as an element of price?

One can see how lime reason Wilhelm Thukydides had for getting so well-meaningly “vexed” over the Ricardian theory.

[6. Ricardo’s Thesis on the Constant Rise in Corn Prices. Table of Annual Average Prices of Corn from 1641 to 1859][edit source]

But apart from absolute rent, the following question remains for Ricardo:

The population grows and with it the demand for agricultural products. Therewith their price rises, as happens in similar cases in industry. But in industry, this rise in price ceases as soon as demand has become effective and brought about an increased supply of commodities. The product now falls to the old, or rather below the old, level of value. But in agriculture this additional product is thrown on to the market neither at the same price nor at a 1ower price. It costs more and effects a constant rise in market-prices and along with that, a raising of rent. How is this to be explained if not by the fact that ever less fertile types of land are being used, that ever more labour is required in order to produce the same product, that agriculture becomes progressively more sterile? Why, apart from the influence of the depreciation [of money], did agricultural products rise in England from 1797 to 1815 with the rapid development of the population? That they fell again later proves nothing. That supplies from foreign markets were cut off proves nothing. On the contrary. This in fact created the right conditions for demonstrating the effect of the law of rent as such. For it was the very cutting off of foreign supplies which forced the country to have recourse to ever less fertile land. This cannot be explained by an absolute increase in rent, because not only did the rental rise but also the rate of rent. The quarter of wheat, etc. rose in price.

It cannot be explained by depreciation because although this might well explain why, with greater productivity in industry, industrial products fell, hence why the relative price of agricultural products rose, it would not explain why in addition to this relative rise, the prices of agricultural products were continuously rising absolutely. Similarly, it cannot be explained as a consequence of the fall in the rate of profit. This would never explain a change in prices, but only a change in the distribution of value or of price between landlord, manufacturer and worker.

So far as depreciation is concerned, assume that £ 1 now equals £2. A quarter of wheat which was previously equal to £2 is now equal to £4. If the industrial product fell to 1/10, and previously its value was 20s., then it would be now 2s. But these 2s. are now equal to 4s. True, depreciation could have something to do with this, the poor harvests as well. ||507| But quite apart from all this it can he assumed that, considering the state of agriculture at that time, unfertile land (for wheat) was being cultivated. The sane land was later fertile, in that the rate of differential rents decreased, as is proved by the best barometer, namely, wheat prices.

The highest prices [occur in the years] 1800 and 1801 and 1811 and 1812; the first were years of poor growth, the second, [years] of the peak of depreciation. Similarly 1817 and 1818 were years of depreciation. But if these years are omitted, probably (to be checked up later) what was left would give the average price.

In comparing wheat prices etc. in different periods, it is at the same time important to compare the amounts produced at so much per quarter, because this shows to what extent the additional production of corn influences the price.


Average Wheat Prices

Yearly average priceHighest priceLowest price
1641-164960s. 52/3d.[75s. 6d. (1645)][42 s. 8d. (1646)]
1650-165945s. 89/10d.63s. 1d. (1650)23s. 1d. (1651)
1660-166944s. 9d.65s. 9d. (1662)32s. 0d. (1666 & 1667)
1670-167944s. 89/10d.61s. 0d. (1674)33s. 0d. (1676)
1680-168935s. 78/10d.41s. 5d. (1681)22s. 4d. (1687)
1690-169950s. 4/10d.63s. 1d. (1695)30s. 2d. (1691)

If we fake the period 1650 to 1699 then (yearly) average price for these 50 years is 44s. 21/5d.

During the period (9 years) from 1641 to 1649, the biggest yearly average price is 75s. 1d. for 1649, year of the revolution, then 71s. 1d. for 1649, 65s. 5d. for 1847 and the lowest price, 42s. 8d. for 1646.


Yearly average priceThe highestand lowest
prices in each decennial period
1700-170935s. 1/10d.69s. 9d. (1709)25s. 4d. (1707)
1710-171943s. 67/10d.69s. 4d. (1710)31s. 1d. (1719)
1720-172937s. 37/10d.48s. 5d. (1728)30s. 10d. (1723)
1730-173931s. 55/10d.58s. 2d. (1735)23s. 8d. (1732)
1740-174931s. 79/10d.45s. 1d. (1740)22s. 1d. (1743 & 1744)

Average price (yearly) for the 50 years [from] 1700 to 1749: 35s. 920/50 d. ||508| III

Yearly average priceThe highestand lowest
prices in each decennial period
1750-175936s. 45/10d.53s. 49d. (1757)28s.10d. (1750)
1760-176940s. 49/10d.53s. 9d. (1768)26s. 9d. (1761)
1770-177945s. 32/10d.52s. 8d. (1744)33s. 8d. (1779)
1780-178946s. 92/10d.52s. 8d. (1783)35s. 8d. (1780)
1790-179957s. 65/10d.78s. 7d. (1796)43s. 0d. (1792)

Yearly average for the 50 years [from] 1760 to 1799: 45s. 313/50 d. IV

Yearly average priceThe highestand lowest
yearly average prices in each decennial period
1800-180984s. 85/10d.119s. 6d. (1801)

113s. 10d. (1800)

58s. 10d. (1803)
1810-181991s. 48/10d.126s. 6d. (1812)

109s. 9d. (1813)

106s. 5d. (1810)
65s. 7d. (1815)

74s. 4d. (1814)

74s. 6d. (1819)
1820-182958s. 97/10d.68s. 6d. (1825)44s. 7d. (1822)
1830-183956s. 85/10d.66s. 4d. (1831)39s. 4d. (1835)
1840-184955s. 114/10d.69s. 5d. (1847)44s. 6d. (1849)
1850-185953s. 47/10d.74s. 9d. (1855)40s. 4d.(1850)

Yearly average for the 50 years [from] 1800 to 1849: 69s. 6 9/50 d.

Yearly average for the 60 years [from] 1800 to 1859: 66s. 914/15d.

Hence yearly average

1640-164960s 52/3d.
1650-169944s. 21/5d.
1700-174935s. 929/50d.
1750-179945s. 313/50d.
1800-184969s. 69/50d.
1850-185953s. 47/10d
* * *

West says himself:

“…in an improved state of agriculture produce may be raised on the second or third quality of land at the little cost as it could under the old system upon the first quality.” (Sir Edward West, Price of Corn and wages of Labour, London, 1826, p. 98.)

[7. Hopkins’s Conjecture about the Difference Between Absolute Rent and Differential Rent; Explanation of Rent by the Private Ownership of Land][edit source]

Hopkins grasps correctly the difference between absolute and differential rent:

“The principle of competition, which renders it impossible, that there should be two rates of profit in the same country […], does […] determine[…] their[5] [..] relative rents…” but not the general average of rent[6]. (Thomas Hopkins, On Rent of Land, and Its Influence on Subsistence and Population…, London, 1828, p. 30.)

||508a| Hopkins makes the following distinction between productive and unproductive labour or, as he says, between primary and secondary:

“If all labourers were employed for the same end, or object, as the diamond cutter and the opera singer, in a short time there would be no wealth to subsist them because none of the wealth produced would then become capital. If a considerable proportion were so employed, wages would be low; be cause, but a comparatively small part of what was produced would be used as capital;—but if only a few of the labourers were so employed, and of course, nearly all were ploughmen, shoemakers, weavers, etc. […, then much capital would be produced and wages would[7] be proportionally high” (l.c., pp. 84-85). “With the diamond cutter and the singer, must be classed all those who labour for the landlords, or annuitants, and who receive a part of their income as wages: all, in fact, whose labours terminate merely in producing those things which gratify landlords and annuitants, and who receive in return for their labours, a part of the rent of the landlord, or of the income of the annuitant. These are all productive labourers, but all their labours are for the purpose of converting wealth which exists, in the shape of rents and annuities, into some other form, that shall, in that other form, more gratify the landlord and annuitant, and therefore they are secondary producers. All other labourers are primary producers”(l.c., p. 85.)

Diamonds and song are both congealed labour and can—like all commodities—be converted into money and as money into capital. But in this transformation of money into capital we must distinguish two things. All commodities can be converted into money and as money into capital, because in the form of money their use-value and their particular natural form become extinct. They are materialised labour in that social form in which it is exchangeable for any real labour, therefore convertible into any form of real labour. On the other hand, whether the commodities which are the product of labour can as such become elements of productive capital once again, depends on whether the nature of their use-values permits them to re-enter the process of production—be it as objective conditions of labour (tools and material) or as subjective conditions (means of subsistence of the worker), (in other words [as] elements of constant or of variable capital). In Ireland, according to a moderate estimate and the census of 1821, the whole net produce which goes to the landlords, the government and the tythe-owners, amounts to £20 3/4 million, the whole wages, however, only to £14,114.000.[8]

“The cultivators” in Italy “generally paying from one-half to more than one-half of the produce as rent to the landlord, with moderate skill in agriculture, and a scanty supply of fixed capital. The greater part of the population is […] composed of secondary producers and proprietors,[9] and generally the primary producers are a poor and degraded class” (l.c., pp. 101-102).

The same was the case in France under Louis XIV [XV and XVI]. According to Young, rent, tythes and taxes amounted to £140,905,304. Cultivation moreover was very poor. The population of France, at this time, is stated to have been 26,363,074. Now” if there had been “six millions of labouring families (which is too high a figure), each family would have had to furnish annually, either directly or indirectly, an average of upwards of £23 of net wealth to the landlords. The church and the government.[10] According to Young, and taking into account various other factors, the laboring family “produced annually £42 l0s.; £23 of which were paid away to others, and £19 l0s. remained to subsist itself” (l.c., pp. 102-04). The Dependence of Population on Capital.

“The error of Mr. Malthus and his followers is to be found in the assumption, that a reduction of the labouring population would not be followed by a correspondent reduction of capital”(l.c., p.l18.) “…Mr. Malthus” forgets “that this demand [for labourers is] limited by the means of paging wages and” that “these means do not arise spontaneously, but are always previously created by labour” (l.c., p. 122).

This conception of the accumulation of capital is correct. But the means can grow, i.e., the quantity of surplus produce or surplus-labour can grow, without a proportionate growth in the quantity of labour.

“It is somewhat extraordinary[11] that that [there is] a strong inclination […] to represent net wealth as beneficial to the labouring class, because it gives […] employment though it is evidently ||509| not on account of being net, that if has that power, but because it is wealth,—that which has been brought into existence by labour: while, at the time,[12] an additional quantity of labour is represented as injurious to the labouring classes, though that labour produces three times as much as it consumes” (l.c., p. 120).

‘If by the use of superior machines,[13] the whole primary produce could he raised from 200 to 250 or 300, while net wealth and profit took only 140, it is clear that there would remain as a fund for the wages of the primary producers 110 or 160 instead of 60” (l.c., p. 128).

“The condition of labourers is rendered bad either by crippling their productive power, or by taking from them what they have produced” (l.c., p. 129).

“No says Mr. Malthus ‘the weight of your burthen has nothing whatever to do with your distress; that arises solely there being too many persons carrying it…’” l.c., p. 184).

“In the general principle, then, that cost of production regulates the exchangeable value of all commodities, original materials are not included: but the claim which the owners of these have upon produce, causes rent to enter into value(Thomas Hopkins, Economical Enquiries Relative to the Laws Which Regulate Rent Profit, Wages, and the Value of Money, London, 1822, p. 11).

Rent, or a charge for use, arises naturally out of ownership, or the establishment of a right of property” (l.c., p. 13).

“Any thing may yield a rent if possessed of the following qualifies:— First,—It must exist in a degree of scarcity. Secondly,—It must have the power to aid labour in the great work of production” (l.c., p. 14). Of course one must not take the case “…where land… [is] so plentiful, compared with the labour and stock to be employed upon it (abundance and scarcity of land are of course relative, and are related to the disposable quantity of labour and capital) ‘that no charge for rent could be made, because it was not scarce” (l.c., p. 21).

“The landowner[14] […] may obtain, in some countries 50 per cent […] in others 10 per cent.[15] In some of the fertile regions of the East, man can subsist upon one-third of the produce of his labour employed upon the land: […] but in parts of Switzerland and Norway, an exaction of 10 per cent might depopulate the country … we see no natural bounds to the rent that may be exacted, but in the limited abilities of the payers…“ (l.c., p. 31), and “where[16] inferior soils exist, the competition of those inferior soils against the superior” (l.c., pp. 33.34).

“There is much common land in England […], the natural fertility of which is equal to what a large part of the land now cultivated was, prior to its being taken into cultivation; and yet the expence of bringing such common lands into cultivation is so great, as to cause them not to yield the ordinary interest for the money expended in improving them, leaving nothing as rent for the natural fertility of the soil: and this […] with all the advantages of an immediate application of labour, aided by stock skilfully applied, and furnished with manufactures cheaply produced; added to the very important circumstance, of good roads being already formed in the neighbourhood[17]… the present land proprietors may be considered the owners of all the accumulated labour which has for ages been expending[18], in bringing the country to its present productive state” (l.c., p. 35).

This is a very important circumstance in relation to rent, especially when the population suddenly grows significantly, as it did from 1780 to 1815, consequent upon the advance in industry, and hence a large portion of hitherto uncultivated land is suddenly brought into cultivation. The newly cultivated land may be as fertile as or even more fertile than old land was, before centuries of cultivation had accumulated in it. But what is demanded of the new land—if [this product] is not to be sold at a dearer price—is that its fertility must he equal firstly to the natural fertility of the cultivated ||510| land and secondly to the artificial fertility which has been engendered by cultivation, hut which has now become its natural fertility. The newly cultivated land would thus have to be much more fertile than the old had been before its cultivation.

But it will be said:

The fertility of the cultivated land originates in the first place from its natural fertility. Thus it depends on the natural condition of the newly cultivated land whether or not it possesses this fertility arising from and owing to nature. In either ease it costs nothing. The other part of the fertility of cultivated land is an artificial product, owing to cultivation, the investment of capital. But this part of productivity involves costs of production which are repaid as interest on the fixed capital which has been sunk into the land. This part of rent is merely interest on the fixed capital tied up in the land. Hence it enters into the costs of production of the product of the previously cultivated land. Hence only the same capital needs to be thrown into the newly cultivated land for it to obtain this second part of fertility; and as with the first, the interest on the capital which has been employed to bring forth this fertility will enter into the price of the product. Why then should it not he possible to cultivate new land—unless it is more fertile—without the price of the product rising? If the natural fertility is the same, then the difference is brought about only by the capital invested and, in both cases alike, the interest on this capital enters into costs of production to the same extent.

However, this reasoning is wrong. A portion of the costs of bringing the land into cultivation etc, is no longer liable to be paid for, because, as Ricardo has already observed, the fertility thus created has partly coalesced with the natural quality of the soil (this applies to the costs of clearing, draining, levelling, the chemical change of the soil resulting from continued chemical processes etc.). Thus if [the product of] the newly cultivated land is to sell at the same price as [that of] the last cultivated land— the land must he sufficiently fertile for this price to cover that part of the costs of bringing it into cultivation which enters into its own costs of production but which has ceased to enter into the costs of the previously cultivated land, because it has coalesced with the natural fertility of the land.

‘“A stream, favourably situated, furnishes an instance of a rent being paid for an appropriated gift of nature, of as exclusive a kind as any that can be named. This is well understood in manufacturing districts, where considerable rents are paid for small streams of water, particularly if the fall is considerable. The power obtained from such streams being equal to that afforded by large steam-engines, it is as advantageous to use them, though subject to the payment of a heavy rent, as it is to expend large sums in the erection and working of steam-engines. Of streams, too, there are some larger, some smaller. Contiguity to the seat of manufacture is also an advantage which commands a higher rent. In the counties of York and Lancaster there is probably a much greater difference between the rents paid for the smallest and the largest streams of water, than there is between the rents paid for 50 of the least and 50 of the most fertile acres that are in common cultivation” (l.c., pp. 37-38).

[8. The Costs of Bringing Land into Cultivation. Periods of Rising and Periods of Falling Corn Prices (1641-1859)][edit source]

If we compare the average prices given earlier and deduct firstly what is due to depreciation (1809-13) and secondly what is due to particularly bad seasons such as 1800 and 1801, then [we shall find] that a very important element is the amount of new land cultivated at a given moment or during a given period. A rise in price on the cultivated land here indicates a growth in population and hence an excess in price (as compared with costs): on the other hand, the same increase in demand brings about the cultivation of fresh land. If proportionately the amount [of newly cultivated land] has greatly increased, then the rising price, and the higher price, in the early period merely shows that a large part of the costs of bringing land into cultivation enters into the additional quantity of food produced. If the price had not risen, this production [of additional food] would not have taken place. Its effect, a fall in price, can only come into evidence later, because the price of the recently created food comprises an element of the cost of production or price, that has long become extinct in the older applications of capital to land, or in the older portions of cultivated soil. The difference would be even greater if consequent upon the increased productivity of labour, the cost of appropriating soil to cultivation, had not greatly fallen, as compared to the costs of cultivation in former, bygone periods. ||511| The transformation of new land, whether more or equally or less fertile than old land, into such a state (and this state is given by the general rate of adaptation to culture prevailing on the existing land under cultivation) as to make it suitable for the application of capital and labour—under the game conditions under which capital and labour is employed on the average quantity of cultivated soil—this adaptation must he paid for by the costs of converting waste land into cultivated land. This difference of cost must he borne by the newly cultivated land. If it does not enter into the price of its produce, there are only two eases possible, under which such a result can be realised. Either the produce of the newly cultivated land is not sold at its real value. Its price stands below its value, as is in fact the case with most of the land bearing no rent, because its price is not constituted by its own value, but by the value of the produce derived from more fertile soils. Or the newly cultivated land must be so fertile, that, if it was sold at its immanent, own value, according to the quantity of labour realised in it, it would be sold at a less price than the price of produce grown on the formerly cultivated soil.

If the difference between the inherent value [of its product] and the market-price settled by the value of the cultivated soil is such, that it amounted for instance to 5 per cent and if on the other hand the interest, entering into its costs of production on the part of the capital employed to bring it up to the level of productive ability common to the old soils, amounted also to 5 per cent, then the newly cultivated land would grow produce, which at the old market-price would he able to pay the usual wages, profits and rents. If the interest of the capital employed amounted to 4 per cent only while its degree of fertility exceeded 4 per cent, as compared to the older soils, the market-price, after the deduction of the 4 per cent interest for the capital employed to bring the new land into a ‘cultivable” state would leave a surplus, or it might be sold at a lower price than the market-price settled by the value of the least fruitful soil. Rents consequently would generally be lowered, together with the market-price of the produce.

Absolute rent is the excess of value over the average price of raw produce. Differential rent is the excess of the market-price of the produce grown on favoured soils over the value of their own produce.

If, therefore, the price of raw produce rises or remains constant in periods in which a relatively large part of the additional food, required by the increase of population, is produced on soil which from uncultivated state has been converted into a state of cultivation, this constancy or rise of prices does not prove that the fertility of the land has decreased, but only that it has not increased to such a degree as to counteract the fresh element of production—formed by the interest of capital applied with a view to bringing the uncultivated land to a level of the common conditions of production, under which the old soils—in a given state of development—are cultivated.

If the relative quantity of the newly cultivated soil is different in different periods, then even a constant or rising price does not prove that the new soil is unfertile or yields less produce, but only that an element of cost, which has become extinct in the old cultivated soils enters into the value of the products of the newly cultivated land. This new element of cost moreover remains, although under the new conditions of production, the costs of bringing new soil into cultivation have fallen considerably, compared with the costs of bringing the old soil from its original, natural state of fertility to its present state. It is therefore necessary to establish the relative proportion of enclosures during the different ||512| periods.

The above list (pp. 507-08) moreover shows:

That of the decennial periods examined, the period 1641-1649 reaches a higher level than any other decennial period up to 1860, with the exception of the decennial periods 1800-1809 and 1810-1819.

So far as the fifty-year periods are concerned, that of 1650-1699 is at a higher level than that of 1700-1749 and that of 1750-1799 higher than that of 1700-1749 and lower than that of 1800-1849 (or 1859).

Prices constantly fall in the period from 1810 to 1859, whereas in the period from 1750 to 1799, despite the lower average price over the 50 years, an upward movement (takes place); the upward movement is just as consistent as the downward movement between 1810 and 1859.

In fact, compared with the period of 1641-1649, there is, on the whole, a continuous fall in decennial average prices, until this fall reaches its peak (lowest point) in the last two decennial periods of the first half of the 18th century.

From the middle of the eighteenth century onwards, an upward movement takes place. It commences from a price (36s. 4 5/10d. 1750-1759), which is lower than the 50 years average price of the second half of the seventeenth century and approximately corresponds (to or is) a little higher than the average price of the 50 year period 1700-1749 (35s. 9 29/50d.), the first half of the eighteenth century. This upward movement continues at an increasing pace in the two decennial periods 1800-1809 and 1810-1819. In the latter it reaches its acme. From that point on, the consistent downward movement begins again. If we take the average of the period of rise from 1750 to 1819, then its average price (a little over 57s. per quarter) [is] equal to the starting-point of the period of fail from 1820 (namely a little over 58s, for the decennial period 1820-1829); just as the starting-point for the second half of the 18th century [equals] the average price of its first half.

Any mathematical example will show how individual circumstances, a poor harvest, depreciation of money, etc. can affect the average figure. For instance, 30+20+5+5+5=65. Average is 13, although the last three numbers here [are] always only equal to 5. As against this, 12+11+10+9+8[=50], average is 10, although, if one struck off the exceptional 30 and 20 in the first series, the average of any three years in [the] second [series] would he greater.

If one deducts the differential costs for the capital successively employed in bringing new land into cultivation, which for a certain period enters as an item into cost, then perhaps the prices of 1820-1859 [would be] lower than any of the earlier ones. And this to some extent may well be the notion in the heads of those fellows who explain rent as interest for fixed capital sunk into the soil.

[9. Anderson versus Malthus. Anderson’s Definition of Rent. His Thesis of the Rising Productivity of Agriculture and Its Influence on Differential Rent][edit source]

Anderson says in:

A Calm Investigation of the Circumstances that have led to the Present Scarcity of Grain in Britain, London, 1801:

“From 1700 to 1750, there has been a regular […] fall of price […] front £2 18s, 1d, to £I 12s. 6d. per quarter of wheat; […] from 1750 to 1800 […] progressional rise […] from £1 12s. 6d. to £5 l0s. per quarter” (p. 11).

Thus, unlike West, Malthus, Ricardo, he did not one-sidedly consider the phenomenon of a rising scale of corn prices (from 1750 to 1813), but rather the double phenomenon, a whole century, of which the first half shows a constantly falling and the second half a constantly rising scale of corn prices. He says very definitely:

“the population […] was on the increase during the first half of this century[19] a as well as the last” (l.c., p. 12).

He is a decided enemy of the theory of population and says explicitly that the land is capable of increasing and perennial improvement. The soil can be continuously improved by chemical influences and cultivation” (l.c., p. 38) ||513| “…under a judicious system of management, that productiveness[20] may be made to augment, from year to year, for a succession of time to which no limits can be assigned, fill at last it may be made to attain a degree of productiveness, of which we cannot, perhaps, at this time conceive an idea” l.c., pp. 35-36).

“…it may be with certainty said, that the present population is such a trifle compared to that” which this island can maintain, as to be much below any degree of serious consideration” (l.c., p. 37).

“Wherever population increases […], the produce of the country must be augmented along with it unless some moral influence is permitted to derange the economy of nature” (l.c., p. 41).

The “theory of population” represents “the most pernicious prejudice” (l.c., p. 54). Anderson seeks to prove historically that the “productivity of agriculture” rises with a growing and falls with a declining population (I.e., pp. 55, 56, 60, 61 et seq.). With a correct conception of rent, the first point to arise was of course that it does not originate from the land but from the product of agriculture, that is, from labour, from the price of the product of labour, for instance of wheat; in other words, from the value of the agricultural product, from the labour applied to the land, not from the land, and Anderson quite correctly emphasises this.

“It is not […] the rent of the land that determines the price of its produce, but it is the price of that produce which determines the rent of the land, although the price of that produce is often highest in those countries where the rent of land is lowest.”

<Rent has thus nothing to do with the absolute productivity of agriculture.>

“This seems to be a paradox that deserves to be explained. In every country there is a variety of soils, differing considerably from one another in point of fertility. These we shall at present suppose arranged into different classes, which we shall denote by the letters A B, C, D, E, F etc., the class A comprehending the soils of the greatest fertility, and the other letters expressing different classes of soils, gradually decreasing in fertility as you recede from the first. Now, as the expense of cultivating the least fertile soil is as great or greater than that of the most fertile field, it necessarily follows, that if an equal quantity of corn, the produce of each field, can be sold at the same price, the profit on cultivating the most fertile soil must be much greater than that of cultivating the others”

<namely the excess of price over the expenses or the price of the capital advanced>

“and as this” <i.e., the profit> “continues to decrease as the sterility increases, it must at length happen that the expense of cultivating some of the inferior classes will equal the value of the whole produce.” [James Anderson, An Enquiry into the Nature of the Corn Laws, Edinburgh, 1777, pp. 45-48, quoted from J. R. McCulloch, The Literature of Political Economy, London, 1845, p. 69)

The last field pays no rent, (This is cited from McCulloch, The Literature of Political Economy, London, 1845. Does McCulloch quote here from An Enquiry into the Nature of the Corn Lows or from Recreations in Agriculture, Natural History, Arts etc., London, 1799-1802? This to be looked up at the Museum.) What Anderson calls “value of the whole produce” is evidently nothing other than his conception of the market-price at which the product is sold, whether it grows on better or on worse land. With the more fertile types of land, this “price” (value) leaves a greater or lesser excess over the expenses. This does not apply to the last product. Here the average price—i.e., that formed by the costs of production plus the average profit—coincides with the market-price of the product. Hence it does not yield an excess profit, which alone can constitute rent. With Anderson, rent equals the excess of the market-price of the product over its average price. (The theory of value as yet does not worry Anderson at all.) Thus if, as a result of the particularly low fertility of the land, the average price of the product of this land coincides with the market-price of the product, then there is no excess and therefore no fund for the formation of rent. Anderson does not say the last cultivated land cannot bear a rent. He only says that if it “happens” that the expenses (the costs of production plus the average profit) are so great that the difference between the market-price of the product and its average price disappears, then rent also disappears and that this must be the case if one descends ever further down the scale. Anderson says expressly that a definite market-price equal for equal quantities of produce that have been produced under more favourable or less favourable conditions of production, is the prerequisite for this formation of rent. He says that a surplus profit or excess of profit from the better types of soil over that from the worse, necessarily follows “if an equal quantity of corn, the produce of each field, can be sold at the same price”, i.e., if a general market-price is presupposed. ||514| Anderson by no means assumes, as might have appeared from the preceding passage, that different degrees of fertility are merely the product of nature. On the contrary the

“… infinite diversity of soils” arises partly from the fact that these “soils […] may be so much altered from their original state by the modes of culture they have been formerly subjected to, by the manures etc. (An Inquiry into the Causes that have hitherto Retarded the Advancement of Agriculture in Europe, Edinburgh, 1779, p. 5).

On the one hand, the progress in the productivity of labour in general makes it easier to bring land into cultivation; on the other hand, cultivation increases the diversity of soils, in that the original fertility of land A which is cultivated and land B which is not, may have been the same if we deduct from A’s fertility that part which, though it is now inherent in it, had previously been added artificially. Thus cultivation itself increases the diversity of natural fertility between cultivated and waste lands. Anderson says expressly that that land for whose produce average price and market-price coincide, can pay no rent:

“Where there are two fields, the produce of which is nearly as above stated”, namely the one yielding 12 bushels covering the costs, the other 20, “without requiring any immediate outlay for their improvement, the farmer would […] pay even more rent than” 6 bushels for instance for the latter while [he would pay] none for the former. If “twelve bushels” are “just sufficient for the expense of cultivating […] no rent whatever can be afforded for cultivated land that yields only twelve bushels” (James Anderson, Essays Relating to Agriculture and Rural Affairs, Vol. III, Edinburgh, 1796, pp. 107-09).

Then he immediately goes on to say:

“Yet it cannot be expected that, if the superior produce has been immediately occasioned by his own outlay of capital and exertions of industry, he can pay nearly the same proportion of it as real: but after the land has been for some time in a permanent state of fertility to that degree, though it even originally derived that fertility from his own industry, he will be content to pay such a proportion of rent as is here stated…” (l.c., pp. 109-10).

Supposing therefore the produce of the best cultivated land is 20 bushels per acre. Of this, according to the assumption, 12 bushels pay the expenses (advances plus average profit). Then it can pay 8 bushels as rent. Assume that the bushel is 5s., then 8 bushels or 1 quarter are 40s, or £2 and 20 bushels are £5 (2 1/2 quarters). Of these £5, 12 bushels or 60s, which is £3, is expenses. Then it pays a rent of £ 2 or 8 bushels. If the rate of profit is 10 per cent then of the £ 3 expenses, the outlay is 54 6/11s. and the profit is 5 5/11s. (546/11 : 55/11 = 100 : 10). Now supposing, the farmer had to carry out various improvements on waste land, which is just as fertile as that yielding 20 bushels had been originally, in order to bring it into such a state of cultivation that would correspond to the general state of agriculture. Apart from the outlay of 54 6/11s. or, if we reckon the profit in with the expenses, apart from 60s., this may involve a further outlay of 36 4/11; then 10 per cent on this would be 3 7/11, and if the farmer always sold 20 bushels at 5s, he could pay a rent only after 10 years, only after the reproduction of his capital. From then on the artificially created fertility of the land would he reckoned as original and would fall to the landlord.

Although the newly cultivated land is as fertile as the best cultivated land was originally, the market-price and the average price for its product do nevertheless coincide now, because it contains an item of costs which is extinct in the best land, whose artificially created fertility and whose natural fertility coincide to a certain extent. But with the newly cultivated land, that part of fertility which is created artificially, by the application of capital, is still entirely distinct from the natural fertility of the land. The newly cultivated land can therefore pay no rent although its original fertility may be the same as that of the best cultivated land. After ten years, however, it could pay not only rent, but as much rent as the best type which was cultivated earlier. Thus Anderson comprehends both phenomena:

1. That the differential rent of the landlords is partly the result of the fertility which the farmer has given the land artificially.

2. That after a certain lapse of time, this artificial fertility appears as the original productivity of the soil itself, in that the soil itself has been transformed and the process by which this transformation has been accomplished, has disappeared and is no longer visible. ||515| If to-day I build a cotton mill for £100,000, I get a more efficient mill than my predecessor who set one up ten years ago. I do not pay for the difference between productivity in machine-building, building in general etc. of to-day and of ten years ago; on the contrary. It enables me to pay less for a mill of the same efficiency or only the same for a mill d higher efficiency. In agriculture it is different. The difference between the original fertilities of the soils is magnified by that part of the so-called natural fertility of the soil which, in fact, has been once produced by men, but has now become incorporated in the soil and is no longer to be distinguished from its original fertility. Owing to the development of the productive power of labour in general, it costs less to raise uncultivated soil of the same original fertility to the improved level of fertility, than it cost to bring the original fertility of the cultivated soil to the apparently original fertility it now has, but some expenditure is still required to bring that equalisation about. The average price of the new product is consequently higher than that of the old, the difference between market-price and average price is thus smaller and may disappear completely. But supposing, in the above case, the newly cultivated soil is so fertile, that after the additional expense of 40s. (including profit) it yields 28 bushels instead of 20. In this case the farmer could pay a rent of 8bushels or £2. And why? Because the newly cultivated soil yields 8 bushels more than the old, so that despite the higher average price, with the same market-price, it yields just as much in excess of the price. If it had involved no extra expense, its fertility would be double that of the old land. With this expense it is the same as that of the old land.

[10. The Untenability of the Rodbertian Critique Rodbertus’s of Ricardo’s Theory of Rent. Lack of Understanding of the Peculiarities of Capitalist Agriculture][edit source]

Now back to Rodbertus, definitively and for the last time.[edit source]

“It” (Rodbertus’s 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 [Sociale Briefe on von Kirchmann, Dritter Brief, Berlin, 1851], pp. 156-57.)

Adam Smith sets forth this problem in two ways. [The first concept:] 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 Herr Rodbertus’s conception. It is also to he 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 more or less, mutatis mutandis, applicable to all modes of production where the workers and 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 subject 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.

||516| “You[21] 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 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” (l.c., p. 162).

First of all, by breaking down the “whole value of the product into wages, ground-rent and capital gain” [p. 162] and thus forgetting about constant capital which also forms a part of value, Adam Smith has in fact led “astrayall the later economists, including Ricardo and including Herr Rodbertus. As my exposition has shown, the lack of this differentiation made any scientific presentation quite impossible. In this respect the Physiocrats were further advanced. Their “avances primitives et annuelles[22] 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, either for the nation or 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 Herr 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 50 far as it comprises revenue and in so far as the manufacturer does not pay a rent, he 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 Herr 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 excrescence. Capitalist production is based on the antithesis of two factors ||517| , materialised 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 he sharing it with the money-lending capitalist, landowner etc. As James Mill observes, production could therefore continue undisturbed if the landed proprietor 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 node 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. Herr Rodbertus is still too much of an old Prussian “landed proprietor”, to understand this. Furthermore, it can only he 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 as the manufactured product—as a separate product, which has to be divided” (l.c., p. 167).

Not the product, Herr 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” (l.c., p.167).

This you fail to understand again, Herr 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”. ||518| But Herr 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 he 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 stack or capital necessary for its cultivation, and the labourers by whose industry it is cultivated.” (David Ricardo, The Principles of Political Economy and Taxation, London, 1821, third edition, Preface, p. V.)

He continues forthwith:

“But in different stages of society, the proportions of the whole produce of the earth which will be allotted to each of these classes, under the names of rent, profit, and wages, will be essentially different” (l.c., p. V).

He is concerned here with the distribution of the ‘whole produce”, not the manufactured product or the raw product. If this whole produce” is taken as given, these shares in the “whole 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 he expressed in a certain proportional 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 three classes.

“You might want to assert, that, just as originally the law of equal 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, to-day the advantages of drawing rent besides the usual capital gain, would induce the capitalist to spend capital on flew 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 the equalisation of capital gains invalidates the other law, that the value of the products is governed by labour costs, while it is just Ricardo, who, in the first chapter of his work, uses the former to prove the latter” (Rodbertus, l.c., p. 174).

Indeed, Herr 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 equals 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 to-day, 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!) “… I admit, that if to-day an expedition from the civilised countries set out to a ||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” (l.c., pp. 174-75).

Well, here you have it, Herr 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 is irrelevant to the theory. The presupposition must he made, and it is therefore impossible to introduce, as yon 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” (l.c., 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” (l.c., p. 178).

What utter nonsense! Only when a capitalist has squeezed himself as farmer between the husbandman and the landed proprietor—he 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 he-gins, 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 profit has been established in industry” (l.c., 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. 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” (l.c., 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 value of the 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” (l.c., pp. 184-85).

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, firstly, 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 tip 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. ||520| Rodbertus is positively wrong, and typically the Pomeranian landowner when he says:

“It is possible that in the course of these thirty 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 also calculated on them, and this influenced the level of English rent in general at that time just as much as the higher rent in 1830” (l.c., p. 186).

Worthy Pomeranian! Why do you always transfer your Prussian situation to England in a disparaging manner? The English-man does not reckon that, if, as was the case (this to be looked up), three to four million acres were ‘enclosed” between 1800 and 1830, the rent on these four 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” hand is usually not the first to he 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 naive 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 node of production, which has merely been built upon them. For instance, what Herr Rodbertus says about the position of economic centres in economic complexes applies perfectly to Pomerania but not to England, where the capitalist node 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 he original, natural and indestructible qualities of the land. He thus wants to ensure that everything which would have to be ascribed to capital in be 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” (l.c., 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 hays out directly in production, he does not demand the customary interest but the customary profit. He does not tend the landowner any capital on which the latter is to pay the “customary” interest. He may borrow capital himself, or else lie 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 ||521| the productivity of the land thus engendered by capital, later coincides with its “natural” productivity, 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.)

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 properly 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” (l.c., 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 he land” (l.c., p. 165)

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 at productivity, that is, plots of land with the same degree of fertility. Them as population increases, land of an inferior quality begins to be exploited, or mew outlays of capital, proportionately less productive than before, are made upon the same plot of land” (l.c., p. 157)

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.” ([Sociale Briefe on von Kirchmann, Dritter Brief], p. 222.)

Anderson already said cultivation improves the land. [Rodbertus continues.]

“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 food 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” (l.c., 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” (l.c., 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 Herr 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 in Herr Rodbertus (l.c., 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…”

||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 to-day’s entrepreneurs, it must appear as an ‘outlay’ in order to be capital” (l.c., 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”, 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” (l.c., 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.

Done with.

  1. ||499| For instance, when Ricardo’s theory (see above) convinces him that a rise in wages above their minimum does not raise the value of the commodities, he says so in a straightforward manner. Malthus wants to bold down wages so flint the bourgeois may profit. |499||
  2. In the manuscript: “encouragement of foreign importation”, instead of “encouraging the importation of corn from abroad”—Ed.
  3. In the manuscript: “to place” instead of “for the purpose of feeding.”—Ed.
  4. The work surpasses the material.” —Ed.
  5. In the manuscript: “the—Ed.
  6. but not the general average of rent” is a summary by Marx of the contents of the subsequent passages—Ed.
  7. In the manuscript: “could”—Ed
  8. In this paragraph Marx reproduces in his own words the contents of a longer passage from Hopkins’s book On Rent of Land, p. 94.—Ed.
  9. In the manuscript: “landlords”.—Ed
  10. This passage has been condensed by Marx.—Ed.
  11. a “It is somewhat extraordinary” is in the manuscript condensed to: “strange”.—Ed.
  12. In the manuscript: “simultaneously” instead of “at the same time”.— Ed.
  13. In the manuscript: “machinery”.—Ed.
  14. In the manuscript: “landlord”.—Ed.
  15. Instead of “in others 10 per cent”, in the manuscript: ‘“in others not 10”—Ed.
  16. In the manuscript: “when”—Ed.
  17. Instead of “added to the very important circumstance, of good roads being already formed in the neighbourhood’, in the manuscript: “‘in addition good roads in the neighbourhood, etc”—Ed.
  18. In the manuscript: “expendet”—Ed.
  19. In the manuscript: “the 18th century” instead of “this century”.—Ed.
  20. In the manuscript: ” the productivity of the soil” instead of “that productiveness”. —Ed.
  21. Von Kirchmann. —Ed.
  22. Original and annual advances. —Ed.