Anti-Duhring, Part II, Political Economy, IX Natural Laws of Economics. Ground-Rent - Part 5 of 8

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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Anti-Duhring, Part II, Political Economy, IX Natural Laws of Economics. Ground-Rent - Part 3 of 8

Here, Duhring fails to distinguish between the capitalist farmer and the peasant farmer. The peasant farmer must utilise the land for their own subsistence. They must pay whatever rent is required by the landlord to do so. However, even here, as Marx set out in Capital, this is not just an arbitrary amount. The origin of this rent arises as tribute, and its material basis is the surplus product/labour of the peasant. But, the position of the capitalist farmer is quite different. As with any capitalist, they do not have to apply their capital to the land. Incidentally, this is why capitalist production had to first arise in the towns rather than agriculture. It is the urban capitalist production which not only establishes an average industrial rate of profit, and so the basis of surplus profit/rent, but also means that capital does not have to be employed on the land if that average profit can't be made.

They could apply it to textile production, or any other sphere, where the highest rate of profit can be obtained. So, the capitalist farmer does not start from the position of having to pay a given amount of rent, and so taking what is left as their income. Rather, the position is reversed. Capital is only employed on the land if the rate of profit obtained is greater than the average industrial rate of profit. So, even if the farmer obtained the average rate of profit, but had to pay rent, they would end up with less than the average rate of profit. They would invest that capital elsewhere. It is only the profit of capital invested on the land that is greater than the average industrial rate of profit that can form rent.

So, Duhring is quite wrong in saying, in relation to capitalist production, as against feudal production, or the position of the peasant farmer, that “it is not customary to regard tenants' earnings as the main income and ground-rent as a balance.” For capitalist production, that is precisely what the relation is.

Duhring says,

“... in the theory of ground-rent the case in which the land is worked by the owner is not separately treated, and no special emphasis is laid on the difference between the amount of rent in the case of a lease and where the owner produces the rent himself. At any rate no one has found it necessary to conceive the rent resulting from owner-cultivated land as divided in such a way that one portion represents as it were the interest on the landed property and the other the surplus earnings of enterprise.” (p 286)

No one in Prussia maybe, but the distinction between these different revenues had been made in English Political Economy, at least from the time of Adam Smith. It forms the basis of Ricardo's theory of rent, and was even more explicitly set out by Marx.

Duhring, again basing himself on Prussian agriculture, as with Rodbertus, reduces the capitalist farmer to the position of being merely a professional manager employed by the landlord, and so reduces the profit to “a form of wages”. He says,

“Apart from the tenant’s own capital which he brings into the business, it would seem that his specific earnings are mostly regarded as a kind of wages. It is however hazardous to assert anything on this subject, as the question has never been raised with this precision.” (p 286)

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Anti-Duhring, Part II, Political Economy, IX Natural Laws of Economics. Ground-Rent - Part 2 of 8

Duhring's Law No. 2 reads,

“Division of Labour: “The separation of trades and the dissection of activities raises the productivity of labour”. (p 284)

Engels notes,

“In so far as this is true, it has likewise been a commonplace since Adam Smith. How far it is true will be shown in Part III.” (p 284)

Duhring's other fundamental laws of economics are:

“Law No. 3.“Distance and transport are the chief causes which hinder or facilitate the co-operation of the productive forces”.

Law No. 4. “The industrial state has an incomparably greater population capacity than the agricultural state”.

Law No. 5. “In the economy nothing takes place without a material interest”.” (p284)

Engels notes that, in terms of method, these economic laws remain true to Duhring's approach, set out earlier, in relation to Philosophy. In other words, a small number of axioms held to be universally and eternally true, as with formal logic or mathematics, but which, thereby, are equally banal, and lacking in content. They represent simply a superficial description, like a still photograph of the world, as perceived at a given time. And, as Engels describes, this world, perceived by Duhring, much as was the case with Rodbertus, analysed by Marx in Theories of Surplus Value, is, in fact, only the world of Prussia, a world that no longer existed, even in Prussia.

This becomes clear when Duhring discusses ground-rent.

“We shall not consider those points which Herr Dühring has merely copied from his predecessor Carey; we are not concerned with Carey, nor with defending Ricardo's views on ground-rent against Carey’s distortions and stupidities. We are only concerned with Herr Dühring, who defines ground-rent as “that income which the proprietor as such draws from the land”.” (p 285)

But, Duhring, like Rodbertus, describes a world in which the landlord still occupied a role in social production. In other words, a wold in which feudal production continues, and the landlord directly exploits the labour employed on the land, and appropriates the surplus product/value, thereby.

That world no longer existed. In Britain, it had disappeared long ago, as it was the capitalist farmer that took over the social function of the landlord in rural production. From that point, it is the capitalist farmer that directly exploits labour, and also, thereby, appropriates the surplus product/value.

Duhring says,

“if one wanted to press the analogy further, the earnings left to the tenant after payment of ground-rent must correspond to the balance of earnings of capital left with the entrepreneur who puts the capital to use after he has paid interest. But it is not customary to regard tenants' earnings as the main income and ground-rent as a balance.” (p 285-6)

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Anti-Duhring, Part II, Political Economy, IX Natural Laws of Economics. Ground-Rent - Part 1 of 8

Engels cites Duhring's “fundamental laws” of economics.

“Law No. 1. “The productivity of economic instruments, natural resources and human energy is increased by inventions and discoveries.”” (p 283)

Unlike Marx, who locates the role of productivity and technological innovation as stemming from an actual Natural Law – The Law of Value – Duhring's Law No.1 is banal. For Marx, The Law of Value acts as the motor of historical evolution, in the same way that The Law of Natural Selection is the motor of biological evolution. The Law of Value means that society must always seek to reduce unit values, in order to increase its production of use-values/real wealth. To do that, it must raise social productivity, a large part of which is technological innovation.

As Marx describes, for example, in The Poverty of Philosophy, it is this technological innovation which, then, results in the development of new productive relations, and these new productive relations create new forms of property, new social classes as the personification of this property, and so new social relations – a social revolution.

But, Duhring has no such material, historical basis for his law. He has no such means of setting out why societies seek to raise productivity at all. Why do they bother, rather than just continuing as they are? Moreover, as Engels notes, not all technological innovations do raise productivity. Engels points to the masses of paper in patent offices of things that were never taken up. Heath Robinson was renowned for his contraptions, none of which had practical application. Again, here, it is The Law of Value that is determinant, because it is only those innovations that actually do reduce unit values that pass the test of natural selection.

And, here, too, as Marx and Engels set out, in Capital III, it is the historically specific nature of capitalist production that determines the form in which that is manifest. Under capitalism, it is not enough simply that a new machine reduces the unit value of commodities, it must reduce those values – labour-time required for production- by such an amount that it is greater than the savings in wages that it brings about.

The importance of this can be seen from the previous discussion. In other words, the value of commodities (setting aside the constant capital) is not only equal to wages, but wages plus the surplus value. Again, here is the distinction between the social cost of production (value) of the commodities, as against the private cost of production (wages) to the capitalist. It is why, as Marx sets out in Capital and Connolly set out in relation to the cooperative at Ralahine, workers' cooperatives always have an incentive to be early adopters of such technologies, because, for the workers, the social cost of production is the same as their private cost of production, i.e. the labour they must expend.

For the individual capitalist firm, the only point of introducing a new machine is to reduce its individual costs of production, and so increase its profit. So, the machine must cost less than the wages saved. But, for the workers, the point of a new machine is only that it lightens the burden of their labour, enables them to produce more whilst working less.

“If “the triumph of the higher scientific method” in economics, as in philosophy, consists only in giving a high-sounding name to the first commonplace that comes to one’s mind, and trumpeting it forth as a natural law or even a fundamental law, then it becomes possible for anybody, even the editors of the Berlin Volkszeitung, to lay “deeper foundations” and to revolutionise science.” (p 283-4)

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Anti-Duhring, Part II, Political Economy, VIII – Capital and Surplus Value (Concluded) - Part 13 of 13

According to Duhring, who adopts from Adam Smith's cost of production theory of value, the value of commodities consists of two components, the costs of production, including wages, and the net product, which constitutes the master's income.

“And what is the “net product” constituting “the master's income” but the surplus of the product of labour over and above the wages, which, despite their quite superfluous disguise as a remuneration, must generally assure the worker's subsistence and possibility of propagation even with Herr Dühring? How can the “appropriation of the most important part of the product of labour-power” be carried out unless, as Marx shows, the capitalist extorts from the worker more labour than is necessary for the reproduction of the means of subsistence the latter consumes, that is, unless the capitalist makes the worker work a longer time than is necessary for the replacement of the value of the wages paid the labourer?” (p 280)

For Duhring, the determination of the value of the commodity becomes subjective and so arbitrary. It is the consequence of a cost of production theory of value in which the value/price of a commodity is derived simply as an exercise in the summation of these different factor costs.

“Thus the prolongation of the working-day beyond the time necessary for the reproduction of the labourer’s means of subsistence, Marx’s surplus-labour — this, and nothing but this, is concealed behind Herr Dühring's “utilisation of labour-power”; and his “net product” falling to the master — how can it manifest itself otherwise than in the Marxian surplus-product and surplus-value?” (p 280)

For Marx, there are objective, material constraints. The physical working-day is limited to 24 hours, but, itself, is reduced by the time required for the rest and recuperation required by the worker. The normal working day is limited by the fact that, beyond a certain degree of duration or intensity, the labour-power, itself, wears out more quickly, and so the value of labour-power/wages rises, reducing the amount of surplus value. So a limit on the amount of new value that can be produced, in a day, is set. At the same time, the value of labour-power is also objectively determined by the labour-time required to reproduce the labourer. Consequently, the difference between these two values – the new value created by labour and the value of labour-power – determines the amount of surplus-labour/value, which means it is no longer a subjective or arbitrary amount.

“And what, apart from its inexact formulation, is there to distinguish the Dühringian rent of possession from the Marxian surplus-value? For the rest, Herr Dühring has taken the name “rent of possession” (“Besitzrente“) from Rodbertus, who included both the ground-rent and the rent of capital, or earnings of capital, under the one term rent, so that Herr Dühring had only to add "possession" to it. So that no doubt may be left about his plagiarism, Herr Dühring sums up, in his own way, the laws of the changes of magnitude in the price of labour-power and in surplus-value which are developed by Marx in Chapter XV (Capital page 539, ff.), and does so in such a manner that what falls to the rent of possession must be lost to wages, and vice versa, he thus reduces the particular Marxian laws, which are so rich in content, to a tautology without content, for it is self-evident that one part of a given magnitude falling into two parts, cannot increase unless the other decreases.” (p 280-1)

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