I already had occasion In 1901, in Zarya (published abroad), to refer to Maslov’s wrong conception of the theory of rent in dealing with his articles in the magazine Zhizn[1] [8]
The debates prior to and in Stockholm, as I have already said, were concentrated to an excessive degree on the political aspect of the question. But after Stockholm, M. Olenov, in an article entitled “The Theoretical Principles of the Municipalisation of the Land” (Obrazovaniye, 1907, No. 1), examined Maslov’s book on the agrarian question in Russia and particularly emphasised the incorrectness of Maslov’s economic theory, which repudiates absolute rent altogether.
Maslov replied to Olenov in an article in Obrazovaniye, Nos. 2 and 3. He reproached his opponent for being “impudent”, “bumptious”, “flippant”, etc. As a matter of fact, in the sphere of Marxist theory, it is Pyotr Maslov who is impudent and stupidly bumptious, for it is difficult to imagine a greater display of ignorance than the smug “criticism” of Marx by Maslov, who persists in his old mistakes.
“The contradiction between the theory of absolute rent and the whole theory of distribution expounded in Volume III,” writes Mr. Maslov, “is so glaring that one can only account for it by the fact that Volume III is a posthumous publication containing also the rough notes of the author.” (The Agrarian Question, 3rd ed., p. 108, footnote.)
Only a person who understands nothing about Marx’s theory of rent could write a thing like that. But the patronising condescension with which the incomparable Pyotr Maslov treats the author of those rough notes is truly superb! This “Marxist” is too superior to think it necessary to familiarise himself with Marx before trying to teach other people, to study at least the Theories of Surplus Value, published in 1905, in which the theory of rent is made so plain that even the Maslovs should be able to grasp it!
Here is Maslov’s argument against Marx:
“Absolute rent is said to arise from the low composition of agricultural capital.... As the composition of capital affects neither the price of the product, nor the rate of profit., nor the distribution of surplus value among the entrepreneurs in general, it cannot create any rent. If the composition of agricultural capital is lower than that of industrial capital, differential rent results from the surplus value obtained in agriculture; but that makes no difference as far as the formation of rent is concerned. Consequently, if the ‘composition’ of capital changed, i.t would not affect rent in the least. The amount of rent is not in the least determined by the character of its origin, but solely by the above mentioned difference in the productivity of labour under different conditions” (op. cit., pp. 108.09. Maslov’s italics).
It would be interesting to know whether the bourgeois critics of Marx” ever went to such lengths of frivolity in their refutations. Our incomparable Maslov is completely muddled; and lie is muddled even when he expounds Marx (incidentally, that is also a habit of Mr. Bulgakov and all other bourgeois assailants of Marxism, who, however, differ from Maslov in that they are more honest, since they do not call themselves Marxists). It is not true to say that according to Marx absolute rent results from the low composition of agricultural capital. Absolute rent arises from the private ownership of land. This private ownership creates a special monopoly having nothing to do with the capitalist. mode of production, which can exist on communal as well as on nationalised land.[2] The non-capitalist monopoly created by the private ownership of land prevents the levelling of profits in those branches of production which are sheltered by this monopoly. In order that “the composition of capital shall not affect the rate of, profit” (there should be added: the composition of an individual capital, or of the capital of an individual branch of industry; here too Maslov expounds Marx in a muddled way), in order that the average rate of profit may be formed, the profits of all the separate enterprises and of all the separate spheres of industry must be levelled. The levelling takes place through free competition, through the free investment of capital in all branches of production without distinction. Can that freedom exist where there is non-capitalist monopoly? No, it cannot. The monopoly created by the private ownership of land hinders the free investment of capital, hinders free competition, hinders the levelling of the disproportionately high agricultural profit (arising from the low composition of agricultural capital). Maslov’s objection reveals an utter lack of understanding, which is. particularly obvious when, two pages further on, we come across a reference to... brickmaking (p. 111); here, too, the technical level is low, the organic composition of capital is below the average, as in the case of agriculture, and yet there is no rent!
There cannot be any rent in brickmaking, esteemed “theoretician”, because absolute rent arises not from the low composition of agricultural capital, but from the monopoly created by the private ownership of land, which prevents competition from levelling the profits of “low composition” capital. To repudiate absolute rent means repudiating the economic significance of the private ownership of land.
Maslov’s second argument against Marx is this:
“Rent from the ‘last’ investment of capital. Rodbertus’s rent and Marx’s absolute rent, will disappear because the tenant can always make the ‘last’ investment the ‘last but one’ if it produces anything besides the ordinary profit” (p. 112).
Pyotr Maslov muddles things, “impudently” muddles them.
In the first place, to put Rodbertus on a par with Marx on the question of rent is to display crass ignorance. Rodbertus’s theory is based on the assumption that the erroneous calculations of the Pomeranian landlord (“not to count” the raw product in agriculture!) are obligatory also for the capitalist farmer. There is not a grain of historism in Rodbertus’s theory, not a grain of historical reality, for he takes agriculture in general, regardless of time and place, agriculture in any country and in any epoch. Marx takes a special historical period in which capitalism has promoted technical development in industry more quickly than in agriculture; Marx takes capitalist agriculture restricted by non-capitalist private ownership of land.
Secondly, the reference to the tenant who “can always” make the last investment of capital the last but one shows that our incomparable Pyotr Maslov has failed to under stand, not only Marx’s absolute rent, but his differential rent as well! That is incredible, but it is a fact. During the term of his lease the tenant “can always” appropriate, and always does appropriate, all rent if he “makes the last investment the last but one”, if—to put it more simply and (as we shall see in a moment) more correctly—he invests fresh capital in the land. During the term of the lease, private ownership of land ceases to exist for the tenant: by paying rent, he has “ransomed himself” from that monopoly and it can no longer hinder him.[3] That is why, when a fresh investment of capital in his land yields the tenant additional profit and additional rent, it is the tenant, not the landowner, who appropriates that rent. The landowner will begin to appropriate that additional rent only after the tenant’s lease has expired, when a new lease is drawn up. What mechanism will then transfer the additional rent from the pocket of the tenant farmer to that of the landowner? The mechanism of free competition, since the fact that the tenant receives not only average profit but also super-profit (=rent) will attract capital to this unusually profitable enterprise. Hence it is clear, on the one hand, why, all other things being equal, a long lease is to the advantage of the tenant and a short lease to the advantage of the landlord. Hence it is clear, on the other hand, why, for example, after the repeal of the Corn Laws, the English landlords introduced a clause in their leases compelling the farmers to spend not less than £12 (about 110 rubles) per acre on their farms, instead of £8, as formerly. The landlords thus took into account the progress in socially necessary agricultural technique which took place as a result of the repeal of the Corn Laws.
The question now arises: what form of additional rent does the tenant appropriate during the term of his lease? Is it only absolute rent, or is it also differential rent? It is both. For had Pyotr Maslov taken the trouble to under stand Marx before “criticising the rough notes” so amusingly, he would have known that differential rent is obtained riot only from different plots of land, but also from different outlays of capital on the same plot.[4]
Thirdly (we apologise to the reader for wearying him with this long list of blunders which Maslov commits in every sentence; but what else can we do if we have to deal with such a “prolific” Konfusionsrat—a “muddled counsellor”, as the Germans say?)—thirdly, Maslov’s argument about the last and last but one investment is based on the notorious “law of diminishing returns”. Like the bourgeois economists, Maslov recognises that law (and, to make it look important, even calls this stupid invention a fact). Like the bourgeois economists, Maslov connects that law with the theory of rent, declaring with the audacity of one who is utterly ignorant of theory, that “if it were not for the fact that the productivity of the last outlays of capital diminishes, there would be no such thing as ground rent” (p. 114).
For a criticism of this vulgar bourgeois “law of diminishing returns” we refer the reader to what I said in 1901 in opposition to Mr. Bulgakov.[5] On that question there is no essential difference between Bulgakov and Maslov.
To supplement what I said in opposition to Bulgakov I will quote just one more passage from the “rough notes” in Volume III, which reveals the Maslov-Bulgakov criticism in all its splendour.
“Rather than tracing to their origin the real natural causes leading to an exhaustion of the soil, which, incidentally, were unknown to all economists writing on differential rent, owing to the level of agricultural chemistry in their day, the shallow conception was seized upon that any amount of capital cannot be invested in a limited area of land; as the Westminster Review, for instance, argued against Richard Jones that all of England cannot be fed through the cultivation of Soho Square”....[9]
This objection is the only argument that Maslov and all other advocates of the “law of diminishing returns” use. If that law did not operate, if succeeding outlays of capital could be as productive as preceding ones, there would then be no need, they argue, to extend the area of cultivation; it would be possible to obtain any quantity of agricultural produce from the smallest of plots by the investment of fresh capital in the land, i. e., it would then be possible for “all of England to be fed through the cultivation of Soho Square”, or to “put the agriculture of the whole globe on one dessiatin”,[6] etc. Consequently, Marx analyses the main argument in favour of the “law” of diminishing returns. He goes on to say:
... “If this be considered a special disadvantage of agriculture, precisely the opposite is true. It is possible to in vest capital here successively with fruitful results, because the soil itself serves as an instrument of production, which is not the case with a factory, or holds only to a limited extent, since it serves only as a foundation, as a place and a space providing a basis of operations. It is true that, compared with scattered handicrafts, large-scale industry may concentrate much production in a small area. Nevertheless, a definite amount of space is always required at any given level of productivity, and the construction of tail buildings also has its practical limitations. Beyond this any expansion of production also demands an extension of land area. The fixed capital invested in machinery, etc., does not improve through use, but, on the contrary, wears out. New inventions may indeed permit some improvement in this respect, but with any given development in productive power, machines will always deteriorate. If productivity is rapidly developed all of the old machinery must be re placed by the more advantageous; in other words, it is lost. The soil, however, if properly treated, improves all the time. The advantage of, the soil, permitting successive investments of capital to bring gains without loss of previous investments, implies the possibility of differences in yield from, these successive investments of capital.” (Das Kapital, III. Band, 2. Teil, S. 314.)[10]
Maslov preferred to repeat the threadbare fable of bourgeois economics about the law of diminishing returns rather than ponder over Marx’s criticism. And yet Maslov has the audacity, while distorting Marx, to claim here, on these very questions, that he is expounding Marxism!
The degree to which Maslov mutilates the theory of rent from his purely bourgeois point of view of the “natural law” of diminishing returns can be seen from the following tirade, which he gives in italics: “If successive outlays of capital on the same plot of land, leading to intensive farming, were equally productive, the competition of new lands would immediately disappear; for the cost of transport affects the price of grain in addition to the cost of production” (page 107).
Thus, overseas competition can be explained only by means of the law of diminishing returns! Exactly what the bourgeois economists say! But if Maslov was unable to read or incapable of understanding Volume III, then at least he should have familiarised himself with Kautsky’s The Agrarian Question, or with Parvus’s pamphlet on the agricultural crisis. Perhaps the popular explanations given by those Marxists would have enabled Maslov to under stand that capitalism raises rent and increases the industrial population. And the price of laud (= capitalised rent) keeps that rent at its inflated level. This applies also to differential rent, so that we see a second time that Maslov failed to understand anything Marx wrote even about the simplest form of rent.
Bourgeois economics accounts for the “competition of new lands” by the “law of diminishing returns”; for the bourgeois, consciously or unconsciously, ignores the social-historical aspect of the matter. Socialist economics (i. e., Marxism) accounts for overseas competition by the fact that land for which no rent is paid undercuts the excessively high grain prices established by capitalism in the old European countries, which raised ground rent to an incredible degree. The bourgeois economist fails to understand (or conceals from himself and others) that the level of rent fixed by the private ownership of land is an obstacle to progress in agriculture, and he therefore throws the blame upon the “natural” obstacle, the “fact” of diminishing returns.
[1] See The Agrarian Question, Part 1, St. Petersburg, 1908, article “The Agrarian Question and the ‘Critics of Marx’", footnote to pp. 178-79. (See present edition, Vol. 5, p. 127.—Ed.) —Lenin
[2] See Theories of Surplus Value, Vol. 11, Part 1, p. 208, where Marx shows that the landowner is an absolutely superfluous figure in capitalist production; that the purpose of the latter is “fully answered” if the land belongs to the state.[11] —Lenin
[3] Had Maslov read the “rough notes” in Volume III at all attentively he could not but have noticed how frequently Marx deals with this. —Lenin
[4] Marx calls the differential rent obtained from the difference in various plots Differential Rent I; and that obtained from the difference in the productivity of additional outlays of capital on the same plot he calls Differential Rent II. In the “rough notes” in Volume Ill, that distinction is brought out in scrupulous detail (Part VI, Chapters 39-43), and one must he a “critic of Marx” after the manner of the Bulgakovs “not to notice” it.[12] —Lenin
[5] See present edition, Vol. 5, pp. 107-19.—Ed.
[6] See “The Agrarian Question and the ‘Critics of Marx’" on the law of diminishing returns. Maslov utters the same nonsense: “The entrepreneur will successively spend all [I] his capital, for example, on one dessiatin, if the new outlays will produce the same profit” (p. 107), etc. —Lenin
[7] This section was published in the newspaper Proletary, No. 33, July 23 (August 5), 1908.
[8] Zhizn (Life)—a monthly magazine, published in St. Petersburg from 1897 to 1901; in 1902, it was published abroad. From 1899 onwards the magazine was the organ of the “legal Marxists”.
[11] Karl Marx, Theorien über den Mehrwert, 2. Teil, Berlin, Dietz Verlag, 1959, S. 36.
[12] Karl Marx, Capital, Vol. III, Moscow, 1959, pp. 634-720.
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