Anti-Duhring, Part II, Political Economy, X – From The Critical History - Part 1

As noted in the Introduction, this section was written by Marx. In the earlier editions, Engels had to severely cut it, but, as he explains in his Preface to this Edition, he was able to restore it to Marx's initial contribution. Although it was written by Marx, it appears in Engels' name. I will continue on that basis, as though the words are those of Engels.

“Finally, let us take a glance at the Critical History of Political Economy, at “that enterprise” of Herr Dühring's which, as he says, “is wholly without precedent”. Perhaps here at last we shall find the definitive and most rigorously scientific treatment which he has so often promised us.” (p 290)

One of the main discoveries in this sphere that Duhring proclaimed, was that “economic science”, is “an enormously modern phenomenon.” By “enormously modern phenomenon”, Duhring means starting only in the late 19th century. In fact, as Marx sets out, in Capital I, philosophers had tried to wrestle with the concept of value going back, at least, 2000 years. Both in Greece and in China, at around the same time, they had sought to reconcile the two aspects of value – use-value and exchange-value – represented by the commodity. But, these societies were still ones in which direct production predominated. The majority of production was of products to be directly consumed not exchanged as commodities.

As Marx explains in Capital I, a product has value, i.e. it is the product of labour, and labour is value, value is labour. This value is necessarily individual value, because each individual use-value is unique. It is not general, abstract labour that produces it, but some specific, concrete labour, and, even more than that. If labourer A produces a kilo of yarn, on a given day, it may take them 8 hours. The next day, they may take 8.5 hours, the day after only 7.5 hours. Each kilo they produce is not only unique, in its use-value, i.e. the quality of the yarn, but, also, in its individual value, the labour-time taken for its production.

For the product, consumed by the producer, in conditions of direct production, this does not matter. As Marx describes, in Capital and Theories of Surplus Value, in the product, use-value and value (the basis of exchange-value) are inextricably linked. The producer only produces products if they are use-values for them, and the value of these products, the labour-time, they require to produce them (individual value), is what it is. They only expend this labour-time if they conclude the use-value resulting from it is worthwhile. So, in societies where such direct production still predominated, it is clear why the distinction between the product, and the commodity is somewhat a mystery to be unravelled.

But, commodity production and exchange – mostly exchange between communities not individuals – has existed for at least 7,000 years, as Engels sets out in his Supplement to Capital III. That inextricable connection of use-value and value of the product – I want this use-value, and its worth the labour-time to produce it – now appears differently, in relation to the commodity. I do not, want this use-value, but I recognise that it has value, and this value can be realised in exchange for other use-values I do want. Its value, now, “appears on its face”, as Marx puts it, in Capital I, as its exchange value or price.

It is not surprising, therefore, that, even when we come to the period of Classical Political Economy, of Smith, Mill, Say and Ricardo, confusion still persists, in relation to the nature of the commodity, as against the product, and it is manifest in Mill's Law of Markets, popularised as Say's Law. It continued to see in generalised commodity production and exchange the conditions that existed under direct production, where only the surplus products was exchanged, or, later, where, under conditions of barter, commodities were deliberately produced to be exchanged for others for such consumption, i.e. C – C.

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The real relation is obscured for Duhring, because he limits his world view to what he saw in Prussia, where the landowners did engage in capitalist farming, and employed managers. But, even in Prussia, there were capitalist farmers who paid ground-rent. What Duhring can provide no objective, scientific explanation of, therefore, is what determines the amount of this ground-rent, in these cases. He can only see it in terms of the original relation, of the appropriation of the total surplus labour by the landlord. Instead of rent being a deduction from profit, equal to surplus profit, Duhring sees the profit being a deduction from the landlord's rent. But, he has no basis for determining what that deduction from rent should be.

“What does Herr Dühring do? He pretends that he does not have the slightest inkling of the division of the surplus-product of agriculture into farmer’s profit and ground-rent, and therefore of the whole theory of rent of classical political economy; that the question of what farmer’s profit really is has never yet been raised “with this precision”, in the whole of political economy and that he is dealing with an entirely unexplored subject about which there is no knowledge but only illusion and uncertainty.” (p 289)

Had Duhing had to apply his theory to England, it would have collapsed immediately, because, there, the landlords had long since ceased to have a social function in production and capitalist farming predominated. But, even in Prussia, his theory cannot explain the relations between rent and profit, when it comes to the capitalist farmers. Assume that, as he says, the full surplus takes the form of rent, and that the landlord, then, hands back (in reality reduces the rent by an amount) to the farmer, a portion of it for having applied their capital. In effect this reduces profit to nothing more than interest. It is as though the capitalist farmer lends capital to the landlord, and the landlord pays interest to the capitalist farmer. Except the capital is not loaned. The farmer owns the capital – though they may have, themselves, borrowed to acquire it, and pay interest to the lender – and expects to obtain the average rate of profit for employing it. So, if the amount the landowner “hands back” to the farmer is not equal to the average profit that could be obtained, there would be no basis for the farmer having advanced the capital in the first place!

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To illustrate, Engels quotes Adam Smith from The Wealth of Nations.

“The revenue derived from labour is called wages. That derived from stock, by the person who manages or employs it, is called profit... The revenue which proceeds altogether from land, is called rent, and belongs to the landlord... When those three different sorts of revenue belong to different persons they are readily distinguished; but when they belong to the same they are sometimes confounded with one another, at least in common language. A gentleman who farms a part of his own estate, after paying the expense of cultivation, should gain both the rent of the landlord and the profit of the farmer. He is apt to denominate, however, his whole gain, profit, and thus confounds rent with profit, at least in common language.” (p 287)

For Duhring, the real relation is turned on its head, with rent representing the primary form of surplus-value, and a part of it being handed to capital as a secondary form. Duhring says,

“The farmer's earnings depend on the exploitation of the “rural labour-power” and are therefore obviously a “part of the rent” by which the “full rent”, which really should flow into the landowner’s pocket, “is reduced”.” (p 288)

On this basis, for Duhring, the only difference between ground-rent and profit is that the former is the form of the surplus in agriculture, and the latter in industry.

“It was inevitable that Herr Dühring should arrive at this uncritical and confused view. We saw that his starting-point was the “truly historical conception”, that domination over the land could be based only on domination over man. Therefore, as soon as land is cultivated by means of any form of subjugated labour, a surplus arises for the landlord, and it is precisely this surplus which is the rent, just as in industry the surplus of the labour product over and above the earnings of labour constitutes the earnings of capital.” (p 288-9)

Engels quotes Duhring to that effect.

“Thus it is clear that ground-rent exists on a considerable scale wherever and whenever agriculture is carried on by means of any form of subjugation of labour.” (p 289)

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Anti-Duhring, Part II, Political Economy, IX Natural Laws of Economics. Ground-Rent - Part 6 of 8

As Marx sets out in Theories of Surplus Value, Chapter 21, as industrial production increased in the towns and cities, as capital expanded, the lack of a similar capitalist development in agriculture meant that agricultural output lagged behind. Exceptions were in relation to sheep farming, which expanded on an extensive rather than intensive basis, and cattle breeding. The consequence was that as supply lagged demand, agricultural prices rose. Existing peasant producers sought to expand output by increasingly destroying the longer-term fertility of the land.

“It is in the nature of capitalist production that it develops industry more rapidly than agriculture. This is not due to the nature of the land, but to the fact that, in order to be exploited really in accordance with its nature, land requires different social relations. Capitalist production turns towards the land only after its influence has exhausted it and after it has devastated its natural qualities.”

The labour-intensive nature of agricultural production meant that it produced large amounts of surplus value, in relation to the capital advanced. It had a higher than average rate of profit, meaning it produced surplus profit/rent. It is only on that basis that capital begins to invade agricultural production, and to put it on a rational, scientific basis, which, also, begins to undo some of the damage done by the earlier over farming and destruction of the soil.

“Here, therefore, we have the three classes of bourgeois society and the form of income peculiar to each: the landlord, drawing ground-rent; the capitalist, drawing profit; and the labourer, drawing wages. It has never occurred to any English economist to regard the farmer’s earnings as a kind of wages, as seems to Herr Dühring to be the case; even less could it be hazardous for such an economist to assert that the farmer’s profit is what it indisputably, obviously and tangibly is, namely, profit on capital. It is perfectly ridiculous to say that the question of what the farmer’s earnings actually are has never been raised in this definite form. In England there has been no need so much as to raise this question; both question and answer have long been present in the facts themselves, and since Adam Smith there has never been any doubt about them.” (p 286-7)

In Germany, the landowners did, often, still cultivate their own lands, employing managers to undertake the work on their behalf. But, as Marx had already set out in Capital, this does not change the fundamental position, once capital has invaded this agricultural production. The fact that, once capitalist production in industry grew to a size that the individual capitalist could not carry out the role of functioning capitalist, and had to employ professional managers paid a wage, had not changed the basic social relation that capital employed wage-labour, and produced surplus value, which assumed the form of profit. Similarly, if a landowner, also, produces on a capitalist basis, employing wage-labour, which produces surplus-value/profit, this profit is a different revenue from rent or interest, whether the landowner recognises it as such or not.

It is only the surplus profit that forms rent, which is one reason that, where no such surplus profit exists, landlords were led to operate it themselves accepting only profit.

“If the landowner also provides the capital and has the farm run for his own account, he pockets the profit on capital in addition to the ground-rent, which is self-evident and cannot be otherwise with the existing mode of production. If Herr Dühring asserts that up to now no one has found it necessary to conceive the rent (he should say revenue) resulting from owner-cultivation as divided into parts, this is simply untrue, and at best only proves his own ignorance once again.” (p 287)

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On this basis, capitalist production creates an average industrial rate of profit. It has no basis for expansion into agricultural production, at this point. Firstly, the peasants provide for themselves via their own direct production. Secondly, capitalist production requires large-scale production, which requires large markets to sell into. Whilst peasants provide for their own needs for food etc., no such large market for agricultural commodities exists. It is only when the growth of capitalist production, in the towns, expands faster, itself spurred by the opening up of global trade, in the 16th and 17th century, that its demand for raw materials, particularly wool, means that existing agricultural production is inadequate. The landlords begin to clear some of their lands, turning them over to sheep etc.

As Marx sets out in Capital III, as markets expanded, the landlords moved from payment of feudal rent as Labour Rent, or Rent in Kind (i.e. handing over agricultural commodities) to Money Rent. As he sets out, Money Rent represents the dissolution of feudal rent itself. The landlords sought money to buy the expanding range of commodities both those produced by urban capitalists and those brought in from abroad by the expanding commercial bourgeoisie. Money rents require the peasants to devote more of their time to the production of commodities for sale in the market, and less to the production of products for their own consumption.

Commodity production and exchange expand once more, as a consequence. But, the cottage industry of the peasants is increasingly undermined by the centralised, larger-scale and more efficient capitalist production in the towns. Increasing numbers of peasants are ruined and must become wage labourers. They must now buy as commodities the the agricultural products they previously produced for themselves. The market expands, and the basis for buying up their land, consolidating it into larger capitalist farms is, thereby, established.

Some of those industrial capitalists who had made their fortunes in the towns and cities, themselves, now, begin to invest capital in agriculture and primary production, as the potential for consolidating large capitalist farms opens up. The process of land enclosures, imposed by law, accelerates this process. But, as set out earlier, capital does not have to invest in agricultural production. It will do so only if it can make at least the average industrial rate of profit, after the payment of any rent.

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Anti-Duhring, Part II, Political Economy, IX Natural Laws of Economics. Ground-Rent - Part 4 of 8

Only when Duhring has to face the reality of the existence of very large capitalist farms is he forced to recognise the fallacy of that position. He goes on,

“Wherever we are dealing with fairly large farms it can easily be seen that it will not do to treat what are specifically the farmer’s earnings as wages. For these earnings are themselves based on the antithesis existing in relation to the rural labour-power, through whose exploitation that form of income is alone made possible. It is clearly a part of the rent which remains in the hands of the tenant and by which the full rent, which the owner managing himself would obtain, is reduced.” (p 286)

So, even here, whilst he recognises that describing the profit obtained as “wages” is untenable, he still views the relation as one in which the landlord appropriates the full rent (surplus value), as though they were themselves working the land and exploiting the labourers, but in which they must allow the capitalist to retain a portion of that rent. As seen before, he has simply changed the nomenclature, but kept the basic concepts the same. If the relation is one in which the rent is appropriated by the landlord, but who allows the capitalist farmer to retain a part of it, how is this different to simply calling what is, in reality, profit wages? Why does the landlord allow the capitalist farmer to retain this portion of rent, whether termed profit or wages?

Engels says,

“The theory of ground-rent is a part of political economy which is specifically English, and necessarily so, because it was only in England that there existed a mode of production under which rent had in fact been separated from profit and interest.” (p 286)

The historical outline is given by Marx in Capital and Theories of Surplus Value. In the 15th century, serfs released from the land moved to the towns, where they become small, independent commodity producers and traders. As Lenin, also, describes, in relation to Russia, following the 1861 Emancipation of the Serfs, this growth of commodity production and exchange, itself, expands the market.

The more producers specialise, and only produce one type of commodity to sell, the more, also, do they increase their own demand for all of those other products they previously produced themselves. All of these products they now buy as commodities, and others specialise in the production of these commodities. This specialisation and social division of labour is synonymous with the expansion of the market, and the realm of exchange-value. This urban industrial production, as a result of this specialisation, quickly begins to undermine the basis of rural domestic industry, and so of direct production, because the peasants always relied on their own domestic industry to supplement their agricultural production.

The competition between the urban commodity producers meant that the winners, the more efficient producers, expanded, which first assumes the form of greater affluence (quantitative change). They acquire better means of production and so on, and have larger families, providing more domestic labour, to produce on a larger scale. The losers are ruined. Their own means of production are bought up (centralised) by the winners. The losers are, then, employed by the winners, and only allowed to use their own, previous means of production, if they agree to provide an amount of free labour to their new employer. The winners, thereby, become capitalists, and the means of production become capital (qualitative change). The losers become proletarians, who only have their labour-power to sell as a commodity. They must, now, buy everything required for their own reproduction as commodities. The market expands again.

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