A grave fault of almost the whole Social-Democratic press on the question of the agrarian programme in general, and a shortcoming of the debate at the Stockholm Congress in particular, is that practical considerations prevail over theoretical, and political considerations over economic.[1] Most of us, of course, have an excuse, namely, the conditions of intensive Party work under which we discussed the agrarian problem in the revolution: first, after January 9, 1905, a few months before the outbreak (the spring “Third Congress of the R.S.D.L.P.” of Bolsheviks in London in 1905 and the Conference of the Minority held at the same time in Geneva), and then on the day after the December uprising,[5] and in Stockholm on the eve of the First Duma. But at all events this shortcoming must, be corrected now, and an examination of the theoretical aspect of the question of nationalisation and municipalisation is particularly necessary.
Above we quoted the current formulation of the now generally recognised proposition, “All the Narodnik groups are advocating nationalisation of the land.” As a matter of fact, this current formulation is very inexact and there is very little in it that is “generally recognised”, if by this we mean a really identical conception of this “nationalisation” among the representatives of the various political trends. The mass of the peasantry demand the land spontaneously, for they are oppressed by the feudal latifundia. and do not associate the transfer of the land to the people with any at all definite economic ideas. Among the peasantry there is only a very urgent demand, born, so to speak, from suffering:.and hardened by long years of oppression—a demand for the revival, strengthening, consolidation, and expansion of small farming; a demand that the latter be made predominant, and nothing more. All that the peasant visualises is the passing of the landlord latifundia into his own hands; in this struggle the peasant clothes his hazy idea of the unity of all peasants, as a mass, in the phrase: ownership of the land by the people. The peasant is guided by the instinct of the property owner, who is hindered by the endless fragmentation of the present forms of medieval landownership and by the impossibility of organising the cultivation of the soil in a manner that fully corresponds to “property owning” requirements if all this motley medieval system of landownership continues. The economic necessity of abolishing landlordism, of abolishing also the “fetters” of allotment landownership—such are the negative concepts which exhaust the peasant idea of nationalisation. What forms of landownership may eventually be necessary for renovated small farming, which will have digested, so to speak, the landlord latifundia, the peasant does not think about.
The negative aspects of the concept (or hazy idea) of nationalisation undoubtedly also predominate in Narodnik ideology, which expresses the demands and the hopes of the peasantry. The removal of the old obstacles, the clearing out of the landlord, the “unfencing” of the land, the removal of the fetters of allotment ownership, the strengthening of small farming, the substitution of “equality, fraternity, and liberty” for “inequality” (i. e., the land lord latifundia) —that expresses nine-tenths of Narodnik ideology. Equal right to land, equalised laud tenure, socialisation—all these are merely different forms of expression of the same ideas; and all are mainly negative concepts, for the Narodnik cannot conceive the new order as a definite system of social-economic relationships. The Narodnik regards the present agrarian revolution as a transition from serfdom, inequality, and oppression in general, to equality and liberty, and nothing more. That is the typical narrow-mindedness of the bourgeois revolutionary who fails to see the capitalist features of the new society he is creating.
In contrast to the naïve outlook of Narodism, Marxism investigates the new system that is arising. Even with the fullest freedom of peasant farming and with the fullest equality of small proprietors occupying the peoples, or no man’s, or “God’s” land—we have before us a system of commodity production. Small producers are tied and subjected to the market. Out of the exchange of products arises the power of money; the conversion of agricultural produce into money is followed by the conversion of labour-power into money. Commodity production becomes capitalist production. And this theory is not a dogma, but a simple description, a generalisation of what is taking place in Russian peasant farming too. The freer that farming is from land congestion, landlord oppression, the pressure of medieval relations and system of landownership, bondage, and tyranny, tile more strongly do capitalist relationships develop within that peasant farming. That is a fact to which the whole of the post-Reform history of Russia undoubtedly testifies.
Consequently, the concept of nationalisation of the land, in terms of economic reality, is a category of commodity and capitalist society. What is real in this concept is not what the peasants think, or what the Narodniks say, but what arises from the economic relations of present society. Nationalisation of the land under capitalist relations is neither more nor less than the transfer of rent to the state. What is rent in capitalist society? It is not income from the land in general. It is that part of surplus value which re— mains after average profit on capital is deducted. Hence, rent presupposes wage-labour in agriculture, the transformation of the cultivator into a capitalist farmer, into an entrepreneur. Nationalisation (in its pure form) assumes that the state receives rent from the agricultural entrepreneur who pays wages to wage-workers and receives average profit on his capital—average for all enterprises, agricultural and non-agricultural, in the given country or group of countries.
Thus, the theoretical concept of nationalisation is inseparably bound up with the theory of rent, i. e., capitalist rent, as the special form of income of a special class (the landowning class) in capitalist society.
Marx’s theory distinguishes two forms of rent: differential rent and absolute rent. The first springs from the limited nature of land, its occupation by capitalist economies, quite irrespective of whether private ownership of land exists, or what the form of landownership is. Between the individual farms there are inevitable differences arising out of differences in soil fertility, location in regard to markets, and the productivity of additional investments of capital in the land. Briefly, those differences may be summed up (without, however, forgetting that they spring from different causes) as the differences between better and worse soils. To proceed. The price of production of the agricultural product is determined by the conditions of production not on the average soil, but on the worst soil, because the, produce from the best soil alone is insufficient to meet the demand. The difference between the individual price of production and the highest price of production is differential rent. (We remind the reader that by price of production Marx means the capital expended on the production of the product, plus average profit on capital.)
Differential rent inevitably arises in capitalist agriculture even if the private ownership of land is completely abolished. Under the private ownership of land, this rent is appropriated by the landowner, for competition between capitals compels the tenant farmer to be satisfied with the average profit on capital. When the private ownership of land is abolished, that rent will go to the state. That rent cannot be abolished as long as the capitalist mode of production exists.
Absolute rent arises from the private ownership of land. That rent contains an element of monopoly, an element of monopoly price.[2] Private ownership of land hinders free competition, hinders the levelling of profit, the formation of average profit in agricultural and non-agricultural enterprises. And as agriculture is on a lower technical level than industry, as the composition of capital is marked by a larger proportion of variable capital than of constant capital, the individual value of the agricultural product is above the average. Hence, by hindering the free levelling of profits in agricultural enterprises on a par with non-agricultural enterprises, the private ownership of land makes it possible to sell the agricultural product not at the highest price of production, but at the still higher individual value of the product (for the price of production is determined by the average profit on capital, while absolute rent prevents the formation of this “average” by monopolistically fixing the individual value at a level higher than the average).
Thus, differential rent is inevitably an inherent feature of every form of capitalist agriculture. Absolute rent is not; it arises only under the private ownership of land, only under the historically[3] created backwardness of agriculture, a backwardness that becomes fixed by monopoly.
Kautsky compares these two forms of rent, particularly in their bearing on the nationalisation of the land, in the following propositions:
“As differential rent, ground rent arises from competition. As absolute rent, it arises from monopoly.... In practice, ground rent does not present itself to us divided in parts; it is impossible to say which part is differential rent and which part is absolute rent. More over, it is usually mixed with the interest on capital expended by the landowner. Where the landowner is also the farmer, ground rent appears as a part of agricultural profit.
“Nevertheless, the distinction between the two forms of rent is extremely important.
“Differential rent arises from the capitalist character of production and not from the private ownership of land.
“That rent would continue to exist even under nationalisation of the land, as demanded [in Germany] by the advocates of land reform, who would nevertheless preserve the capitalist mode of agriculture. In that case, however, rent would no longer accrue to private persons, but to the state.
“Absolute rent arises out of the private ownership of land, out. of the antagonism of interests between the landowner and the rest. of society. The nationalisation of the land would make possible the abolition of that rent and the reduction of the price of agricultural produce-by an amount equal to that rent. [Our italics.]
“To proceed: the second distinction between differential rent and absolute rent is that the former is not a constituent part affecting the price of agricultural produce, whereas the latter is. The former arises from the price of production; the latter arises from the excess of market price over price of production. The former arises from the surplus,, from the super-profit, that is created by the more productive labour on better soil, or on a better located plot. The latter does not arise from the additional income of certain forms of agricultural labour; it is possible only as a deduction from the available quantity of values for the benefit of the landowner, a deduction from the mass of surplus value—therefore, it implies either a reduction of profits or a deduction from wages. If the price of foodstuffs rises, and wages rise also, the profit on capital diminishes. If the price of foodstuffs rises without an increase in wages, then the workers suffer the loss. Finally, the following may happen— and this may be regarded as the general rule—the loss caused by absolute rent. is borne jointly by the workers and the capitalists.”[4]
Thus, the question of the nationalisation of the land in capitalist society falls into two essentially distinct parts: the question of differential rent, and that of absolute rent. Nationalisation changes the owner of the former, and undermines the very existence of the latter. Hence, on the one hand, nationalisation is a partial reform within the limits of capitalism (a change of owners of a part of surplus value), and, on the other hand, it abolishes the monopoly which hinders the development of capitalism as a whole.
Unless a distinction is made between these two sides, i. e., the nationalisation of differential rent and of absolute rent, it is impossible to understand the economic significance of the question of nationalisation in Russia. This brings us, however, to P. Maslov’s repudiation of the theory of absolute rent.
[1] In my pamphlet Revision of the Agrarian Programme of the Workers’ Party, which I defended at Stockholm, there are very definite (although brief, as the pamphlet itself is) references to the theoretical premises of a Marxist agrarian programme. I pointed out in that pamphlet that “the bare repudiation of nationalisation” would be a “theoretical distortion of Marxism” (p. 16 of the old edition, p. 41 of this edition). (See present edition, Vol. 10, p. 181.— Ed.) See also my Report on the Stockholm Congress, pp. 27-28 of the old edition (p. 63 of this edition). (See present edition, Vol. 10, p. 346.—Ed.) “From the strictly scientific point of view, from the point of view of the conditions of development of capitalism in general, we. must undoubtedly say—if we do not want to differ from Volume III of Capital—that the nationalisation of the land is possible in bourgeois society, that it promotes economic development, facilitates competition and the influx of capital into agriculture, reduces the price of grain, etc.” See also the same report, p. 52 (see present edition, Vol. 10, p. 378. —Ed.): “In spite of their promises, they [the Right wing of Social-Democracy] do not carry the bourgeois-democratic revolution in agriculture to its ‘logical’ conclusion, for the only ‘logical’ (and economic) conclusion under capitalism is the nationalisation of the land, which abolishes absolute rent.” —Lenin
[2] In Part 2 of Volume II of Theories of Surplus Value, Marx reveals the “essence of different theories of rent”: the theory of the monopoly price of agricultural produce and the theory of differential rent. He shows what is true in both those theories, insofar as absolute rent contains an element of monopoly. See p. 125 concerning Adam Smith’s theory: “it is quite true” that rent is monopoly price, insofar as the private ownership of land prevents the levelling of profit. by fixing profit at a level higher than the average.[6] —Lenin
[3] See Theories of Surplus Value, Vol. II, Part I (German original), p. 259: “In agriculture, manual labour still predominates, while the capitalist mode of production develops industry more quickly than agriculture. However, that is a historical distinction which may disappear.” (See also p. 275, and Vol. II, Part 2, p. 15.)[7] —Lenin
[4] K. Kautsky, The Agrarian Question, German original, pp. 79-80. —Lenin
[5] Lenin is referring to the discussion of the agrarian question at the First Conference of the R.S.D.L.P. held in Tammerfors December 12-17 (25-30), 1905. The report on this question was made by Lenin. In furtherance of the decision of the Third Congress of the Party, the Conference found it necessary to include in the programme an item calling for support of the peasants’ revolutionary measures, including confiscation of all state, church, monastery, crown, and privately owned lands. The Conference drew special attention to the need for an independent organisation of the rural proletariat and for showing the latter that its interests could not be reconciled with those of the rural bourgeoisie.
[6] Karl Marx, Theorien über den Mehrwert, 2. Teil, Berlin, Dietz Verlag, 1959, S. 336.
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