The Agrarian Question and the Critics of Marx

The Agrarian Question and the Critics of Marx

The Agrarian Question and the “Critics of Marx”

Vladimir Ilyich Lenin

The Agrarian Question and the “Critics of Marx”

“... To argue ... that dogmatic Marxism has been jolted from its positions in the sphere of agrarian questions would be like forcing an open door... ." So spoke Russkoye Bogatstvo[7] last year through the mouth of Victor Chernov (1900, No. 8, p. 204). What a peculiar quality this “dogmatic Marxism” possesses! For many years now scientists and very learned people in Europe have been gravely declaring (and newspaper scribes and journalists have been repeating it over and over again) that Marxism has been jolted from its positions by “criticism”, and yet every new critic starts from the beginning, all over again, to bombard these allegedly destroyed positions. Mr. Chernov, for example, in the periodical Russkoye Bogatstvo, as well as in the collec tion, At the Clorious Post, in a two-hundred-and-forty-page-long “discussion” of Hertz’ work[1] with his reader, “forces an open door”. Hertz’ work, which has been given such a lengthy exposition, is itself a review of Kautsky’s book, and has been translated into Russian. Mr. Bulgakov, in keeping with his promise to refute this very same Kautsky, has published a whole two-volume study. Now, surely, no one will ever be able to find the remnants of “dogmatic Marxism”, which lies crushed to death beneath this mountain of critical printed matter.

I

The “Law” of Diminishing Returns

Let us first of all examine the general theoretical physiognomy of the Critics. Mr. Bulgakov published an article in the periodical Nachalo[8] criticising Kautsky’s Agrarian Question in which he at once exposed his stock of “critical” methods. He charged down on Kautsky with the dash and abandon of a veritable cavalier and “scattered” him to the winds. He put into Kautsky’s mouth what he had not said, he accused him of ignoring the very circumstances and arguments which he, Kautsky, had expounded with precision, and he presented to the reader as his own the critical conclusions drawn by Kautsky. With the air of an expert, Mr. Bulgakov accused Kautsky of confounding technology with economics, and in doing so betrayed, not only incredible confusion, but also a disinclination to .read to the end the page he quotes from his opponent’s book. Needless to say, this article from the pen of the future professor is replete with outworn gibes against socialists, against the “theory of collapse”, against utopianism, against belief in miracles, etc.[2] Now, in his doctoral thesis (Capitalism and Agriculture, St. Petersburg, 1900), Mr. Bulgakov settled all his accounts with Marxism and brought his “critical” evolution to its logical conclusion.

Mr. Bulgakov makes the “law of diminishing returns” the corner-stone of his “theory of agrarian development”. We are treated to quotations from the works of the classics who established this “law” (according to which each additional investment of labour and capital in land produces, not a corresponding, but a diminishing quantity of products). We are given a list & the English economists who recognise this law. We are assured that it “has universal significance”, that it is “an evident and absolutely undeniable truth”, “which needs only to be stated clearly”, etc., etc. The more emphatically Mr. Bulgakov expresses himself, the clearer it becomes that he is retreating to bourgeois political economy, which obscures social relationships by imaginary “eternal laws”. Indeed, what does the “evidentness” of the notorious “law of diminishing returns” amount to? If each successive investment of labour and capital in land produced, not a diminishing, but an equal quantity of products, there would be no sense in extending the area of land under cultivation; additional quantities of grain, would be produced on the same plot of land, however small, and “it would be possible to carry on the agriculture of the whole globe upon one dessiatine of land”. This is the customary (and the only) argument advanced in favour of this “universal” law. A little thought, however, will prove to anyone that this argument is an empty abstraction, which ignores the most important thing—the level of technological development, the state of the productive forces. Indeed, the very term “additional (or successive) investments of labour and capital” presupposes changes in the methods of production, reforms in technique. In order to increase the quantity of capital invested in land to any considerable degree, new machinery must be invented, and there must be new methods of land cultivation, stock breeding, transport of products, and so on and so forth. Of course, “additional investments of labour and capital” may and do take place on a relatively small scale even when the technique of production has remained at the same level. In such cases, the “law of diminishing returns” is applicable to a certain degree, i.e., in the sense that the unchanged technique of production imposes relatively very narrow limits upon the investment of additional labour and capital. Consequently, instead of a universal law, we have an extremely relative “law”—so relative, indeed, that it cannot be called a “law”, or even a cardinal specific feature of agriculture. Let us take for granted: the three-field system, cultivation of traditional grain crops, maintenance of cattle to obtain manure, lack of improved grassland and improved implements. Obviously, assuming that these conditions remain unchanged, the possibilities of investing additional labour and capital in the land are extremely limited. But even within the narrow limits in which some investment of additional labour and capital is still possible, a decrease in the productivity of each such additional investment will not always and not necessarily be observed. Let us take industry—flour-milling or ironworking, for example, in the period preceding world trade and the invention of the steam-engine. At that level of technical development, the limits to which additional labour and capital could be invested in a blacksmith’s forge, or in a wind- or water-mill, were very restricted; the inevitable thing that happened was that small smithies and flour- mills continued to multiply and increase in number until the radical changes in the methods of production created a basis for new forms of industry.

Thus, the “law of diminishing returns” does not at all apply to cases in which technology is progressing and methods of production are changing; it has only an extremely relative and restricted application to conditions in which technology remains unchanged. That is why neither Marx nor the Marxists speak of this “law”, and only representatives of bourgeois science like Brentano make so much noise about it, since they are unable to abandon the prejudices of the old political economy, with its abstract, eternal, and natural laws.

Mr. Bulgakov defends the “universal law” by arguments deserving only of ridicule.

“What was formerly a free gift of Nature must now be produced by man: the wind and the rain broke up the soil, which was full of nutritive elements, and only a little effort on the part of man was required to produce what was needed. In the course of time, a larger and larger share of the productive work fell to man. As is the case everywhere, artificial processes more and more take the place of natural processes. But while in industry this expresses man’s victory over Nature, in agriculture it indicates the increasing difficulties of an existence for which Nature is diminishing her gifts.

“In the present case it is immaterial whether the increasing difficulty of producing food is expressed in an increase in human labour or in an increase of its products, such as instruments of production, fertilisers [Mr. Bulgakov wishes to say that it is immaterial whether the increasing difficulty of producing food finds expression in an increased expenditure of human labour or in an increase in the products of human labour]; what is important is that food becomes more and more costly to man. This substitution of human labour for the forces of Nature and of artificial factors of production for natural factors is the law of diminishing returns” (16).

Evidently, Mr. Bulgakov is envious of the laurels of Messrs. Struve and Tugan-Baranovsky, who arrived at the conclusion that it is not man who works with the help of machines, but machines that work with the help of man. And like those critics, he sinks to the level of vulgar political economy by talking about the forces of Nature being superseded by human labour, and so forth. Speaking generally, it is as impossible for human labour to supersede the forces of Nature as it is to substitute pounds for yards. Both in industry and in agriculture., man can only utilise the forces of Nature when he has learned how they operate, and he can facilitate this utilisation by means of machinery, tools, etc. That primitive man obtained all he required as a free gift of Nature is a silly fable for which Mr. Bulgakov would be howled down even by first-term students. Our age was not preceded by a Golden Age; and primitive man was absolutely crushed by the burden of existence, by the difficulties of the struggle against Nature. The introduction of machinery and of improved methods of production immeasurably eased man’s struggle against Nature generally, and the production of food in particular. It has not become more difficult to produce food; it has become more difficult for the workers to obtain it because capitalist development has inflated ground-rent and the price of land, has concentrated agriculture in the hands of large and small capitalists, and, to a still larger extent, has concentrated machinery, implements, and money, without which successful production is impossible. To explain the aggravation of the workers’ condition by the argument that Nature is reducing her gifts can mean only that one has become a bourgeois apologist.

“In accepting this law,” continues Mr. Bulgakov, “we do not in the least assert that there is a continuously increasing difficulty in food production; nor do we deny progress in agriculture. To assert the first, and to deny the second, would be contrary to obvious facts. This difficulty does not grow uninterruptedly, of course; development proceeds in zigzag fashion. Discoveries in agronomics and technical improvements convert barren into fertile land and temporarily remove the tendency indicated by the law of diminishing returns” (ibid.).

Profound, is it not?

Technical progress is a “temporary” tendency, while the law of diminishing returns, i.e., diminishing productivity (and that not always) of additional investments of capital on the basis of an unchanging technique, “has universal significance”! This is equal to saying that the stopping of trains at stations represents the universal law of steam transport, while the motion of trains between stations is a temporary tendency paralysing the operation of the universal law of immobility.

Finally, extensive data clearly refute the universality of the law of diminishing returns—data on the agricultural as well as the non-agricultural population. Mr. Bulgakov himself admits that “if each country were restricted to its own natural resources, the procuring of food would call for an uninterrupted relative increase [note this!] in the quantity of labour and, consequently, in the agricultural population” (19). The diminution in the agricultural population of Western Europe, accordingly, is explained by the fact that the operation of the law of diminishing returns has been counteracted by the importation of grain.

An excellent explanation, indeed! Our pundit has forgotten a detail, namely, that a relative diminution in the agricultural population is common to all capitalist countries, both agricultural and grain-importing. The agricultural population is relatively diminishing in America and in Russia. It has been diminishing in France since the end of the eighteenth century (see figures in the same work of Mr. Bulgakov, II, p. 168). Moreover, the relative diminution of the agricultural population sometimes becomes an absolute diminution, whereas the excess of grain imports over exports was still quite insignificant in the thirties and forties, and only after 1878 do we cease to find years in which grain exports exceed grain imports.[3] In Prussia there was a relative diminution in the agricultural population from 73.5 per cent in 1816 to 71.7 per cent in 1849, and to 67.5 per cent in 1871, whereas the importation of rye began only in the early sixties, and the importation of wheat in the early seventies (ibid., Part II, pp. 70 and 88). Finally, if we take the European grain-importing countries, e.g., France and Germany during the last decade, we shall find that there has been undoubted progress in agriculture side by side with an absolute diminution in the number of workers engaged in farming. In France this number dropped from 6,913,504 in 1882 to 6,663,135 in 1892 (Statistique agricole, Part II, pp. 248.51), and in Germany from 8,064,000 in 1882 to 8,045,000 in 1895.[4] Thus, it may be said that the entire history of the nineteenth century, by a multitude of data on countries of the most varied character, proves irrefutably that the “universal” law of diminishing returns is absolutely paralysed by the “temporary” tendency of technological advance which enables a relatively (and sometimes absolutely) diminishing rural population to produce an increasing quantity of agricultural products for an increasing mass of population.

Incidentally, this mass of statistical data also refutes the two following main points of Mr. Bulgakov’s “theory”: first, his assertion that the theory that constant capital (implements and materials of production) grows more rapidly than variable capital (labour-power) “is absolutely inapplicable to agriculture”. With an air of importance Mr. Bulgakov declares that this theory is wrong, and in proof of his opinion refers to: (a) “Professor A. Skvortsov” (celebrated mostly for having ascribed Marx’s theory of the average rate of profit to ill-intentioned propaganda); and (b) the fact that under intensive farming the number of workers employed per unit of land increases. This is an example of the deliberate refusal to understand Marx which fashionable Critics constantly display. Think of it: the theory of the more rapid growth of constant capital as compared with variable capital is refuted by the increase of variable capital per unit of land! And Mr. Bulgakov fails to notice that the very statistics he himself offers in such abundance confirm Marx’s theory. In German agriculture as a whole the number of workers employed diminished from 8,064,000 in 1882 to 8,045,000 in 1895 (and if the number of persons engaged in agriculture as a subsidiary occupation is added, it in creased from 11,208,000 to 11,623,000, i.e., only by 3.7 per cent). In the same period, livestock increased from 23,000,000 to 25,400,000 (all livestock expressed in terms of cattle), i.e., by more than 10 per cent; the number of cases in which the five most important agricultural machines were employed increased from 458,000 to 922,000, i.e., more than doubled; the quantity of fertilisers imported increased from 636,000 tons (1883) to 1,961,000 tons (1892), and the quantity of potassium salts from 304,000 double centners to 2,400,000.[5] Is it not clear from this that constant capital has increased in relation to variable capital? This, quite apart from the fact that these summary figures to a great extent conceal the progress of large-scale production. We shall deal with this point later.

Secondly, the progress of agriculture simultaneously with a diminution, or a negligible absolute increase, in the agricultural population completely refutes Mr. Bulgakov’s absurd attempt to revive Malthusianism. The first of the Russian “ex-Marxists” to make this attempt was probably Mr. Struve, in his Critical Remarks; but he, as always, never went beyond hesitant, half-expressed, and ambiguous remarks, which he did not carry to their logical conclusion or round off into a complete system of views. Mr. Bulgakov, however, is bolder and more consistent; he unhesitatingly converts the “law of diminishing returns” into “one of the most important laws of the history of civilisation” (sic! p. 18). “The entire history of the nineteenth century ... with its problems of riches and poverty would be unintelligible without this law.” “I have not the least doubt that the social question as it is posed today is materially linked with this law.” (Our strict scientist hastens to make this declaration on page 18 of his “Inquiry”!)... “There is no doubt,” he declares at the end of his work, “that where over-population exists, a certain part of the poverty that prevails must be put under the heading of absolute poverty, the poverty of production and not of distribution” (II, 221). “The population problem, in the special form in which it presents itself to us as a result of the conditions of agricultural production, is, in my opinion, the principal obstacle—at the present time at any rate—in the way of any extensive application of the principles of collectivism or co-operation in agricultural enterprise” (II, 265). “The past leaves to the future a heritage in the shape of a grain problem more terrible and more difficult than the social problem—the problem of production and not of distribution” (II, 455), and so on and so forth. There is no need for us to discuss the scientific significance of this “theory”, which is inseparably connected with the universal law of diminishing returns, since we have already examined this law. The fact that critical flirtation with Malthusianism in its logical development has inevitably resulted in a descent to the most vulgar bourgeois apologetics is proved by the above-quoted arguments, which Mr. Bulgakov has presented with a frankness that leaves nothing to be desired.

In a further essay we shall examine data from several new sources cited by our Critics (who constantly din into our ears that orthodox Marxists fear specification) and show that Mr. Bulgakov generally stereotypes the word “over population”, the use of which relieves him of the necessity of making any kind of analysis, particularly of analysing the class antagonisms among the “peasantry”. Here we shall confine ourselves to the general theoretical aspect of the agrarian question and touch on the theory of rent. “As for Marx,” writes Mr. Bulgakov, “we must say that in Volume III of Capital, in the form in which we have it now, he adds nothing worthy of attention to Ricardo’s theory of differential rent” (87). Let us bear this “nothing worthy of attention” in mind and compare the Critic’s verdict with the following statement made by him previously: “Notwithstanding his obvious opposition to this law [the law of diminishing returns I, Marx appropriates, in its fundamental principles, Ricardo’s theory of rent, which is based on this law” (13). Thus, according to Mr. Bulgakov, Marx failed to see the connection between Ricardo’s theory of rent and the law of diminishing returns, and therefore he never carried his argument to its logical conclusion! In regard to such a statement we can say but one thing—that no one distorts Marx to the degree that the ex-Marxists do and no one is so incredibly un... un... unabashed in ascribing to the writer he is criticising a thousand and one mortal sins.

Mr. Bulgakov’s assertion is a glaring distortion of the truth. Actually, Marx not only saw the connection between Ricardo’s theory of rent and his erroneous doctrine of diminishing returns, but quite definitely exposed Ricardo’s error. Anyone who has read Volume III of Capital with even a grain of “attention” could not but have observed the fact, very much “worthy of attention”, that it was precisely Marx who freed the theory of differential rent from all connection with the notorious “law of diminishing returns Marx demonstrated that the unequal productivity of different investments of capital in land was all that was necessary for the formation of differential rent. The question as to whether the transition is from better land to worse land or vice versa, as to whether the productivity of the additional investments of capital in land diminishes or increases, is absolutely immaterial. In actual practice, all sorts of combinations of these varying cases take place; and it is utterly impossible to subject these combinations to a single general rule. For example, Marx first of all describes the first form of differential rent, which arises from the unequal productivity of capital invested in unequal plots of land, and he explains his case by tables (concerning which Mr. Bulgakov severely rebukes Marx for his “excessive predilection for clothing what are often very simple thoughts in a complicated mathematical garb”. This complicated mathematical garb is simply the four rules of arithmetic, and the very simple ideas, as we see, were completely misunderstood by our learned professor). After analysing these tables, Marx draws the conclusion: “This takes care of the first false assumption regarding differential rent—still found among West, Malthus, and Ricardo—namely, that it necessarily presupposes a movement toward worse and worse soil, or an ever-decreasing fertility of the soil. It can be formed, as we have seen, with a movement toward better and better soil; it can be formed when a better soil takes the lowest position that was formerly occupied by the worst soil; it can be connected with a progressive improvement in agriculture. The precondition is merely the in equality of different kinds of soil ." (Marx does not speak here of the unequal productivity of successive investments of capital in land, because this gives rise to the second form of differential rent; in this chapter he speaks only of the first form of differential rent.) “So far as the increase in productivity is concerned, it [differential rent—Ed. I assumes that the increase in absolute fertility of the total area does not eliminate this inequality, but either increases it, leaves it unchanged, or merely reduces it” (Das Kapital, III, 2, S. 199).[9] Mr. Bulgakov failed to see the radical difference between Marx’s theory of differential rent and Ricardo’s theory of rent. He preferred to rummage in Volume III of Capital for “a fragment which would rather suggest the idea that Marx was by no means opposed to the law of diminishing returns” (p. 1.3, footnote). We apologise to the reader for having to devote so much space to a passage that is quite immaterial to the question that concerns us and Mr. Bulgakov. But what can one do when the heroes of modern criticism (who have the insolence to charge orthodox Marxists with resorting to rabulous disputation) distort the absolutely clear meaning of a doctrine to which they are opposed by quoting passages out of context and in faulty translations? Mr. Bulgakov quotes the passage that he found as follows: “From the standpoint of the capitalist mode of production, a relative increase in the price of (agricultural) products always takes place, since [we ask the reader to pay particular attention to the words we have italicised I these products cannot be secured unless an expenditure is incurred, a payment made, which was not previously made.” Marx goes on to say that elements of Nature entering as agents into production, costing nothing, represent a free gift of Nature’s productive power of labour; but if for the production of an additional product it is necessary to work without the help of this natural power, a new capital outlay is required, which leads to an increase in the cost of production.

Concerning this mode of “quoting” we have three remarks to make. First, Mr. Bulgakov himself introduced the word “since”, which gives his tirade the definite sense of establishing some kind of “law”. In the original (Das Kapital, III, 2, S. 277-78)[10] Marx does not say “since” but “when”. When something is paid for which formerly did not have to be paid for, there is a relative increase in the price of the product. Is that proposition anything like a recognition of the “law” of diminishing returns? Secondly, Mr. Bulgakov inserts in parentheses the word “agricultural”. In the original text the word does not appear at all. In all probability, with the frivolousness characteristic of the Critics, Mr. Bulgakov decided that in this passage Marx could be speaking only of agricultural products, and therefore hastened to give his readers an “explanation” that is a complete misrepresentation. In point of fact, Marx in this passage speaks of products generally; in the original, the passage quoted by Mr. Bulgakov is preseded by the words: “But, in general, the following is to be noted.” Freely bestowed natural forces may also enter into industrial production—in the same section on rent Marx gives the example of a waterfall which for a certain factory takes the place of steam power—and if it is necessary to manufacture an additional quantity of products without the aid of these freely bestowed natural forces, there will always be a relative increase in the price of the products. Thirdly, we must examine the context in which this passage occurs Marx discusses in this chapter differential rent obtained from the worst cultivated soil, and he examines as always two absolutely equivalent, two absolutely equally possible cases: the first case—increasing productivity of successive investments of capital (S. 274-76),[11] and the second case—decreasing productivity of such investments (S. 276-78).[12] In regard to the second of the possible cases, Marx says: “Concerning decreasing productiveness of the soil with successive investments of capital, see Liebig.... But, in general, the following is to be noted” (our italics). There follows the passage “translated” by Mr. Bulgakov, stating that when what was formerly obtained gratis has now to be paid for, there is always a relative increase in the price of the product.

We shall leave it to the reader to judge the scientific conscientiousness of the Critic who turned Marx’s remark about one of the possible cases into a recognition of this case by Marx as some sort of general “law”.

And the following is the conclusion at which Mr. Bulgakov arrives concerning the passage he has discovered:

“This passage, of course, is vague....” Of course! By substituting one word for another, Mr. Bulgakov has rendered it utterly meaningless! "... but it cannot be understood otherwise than as an indirect or even direct recognition [listen well! I of the law of diminishing returns. I am unaware that Marx has expressed himself openly on the latter in any other place” (I, 14). As an ex-Marxist, Mr. Bulgakov is “unaware” that Marx openly declared the assumptions of West, Malthus, and Ricardo—that differential rent presupposes a transition to worse land or diminishing returns—to be utterly false.[6] He is “unaware” that in the course of his voluminous analysis of rent Marx points out scores of times that he regards diminishing and increasing productivity of additional investments of capital as equally possible cases!

Vladimir Ilyich Lenin

The Agrarian Question and the “Critics of Marx”

II

The Theory of Rent

Mr. Bulgakov has completely failed to understand Marx’s theory of rent. He is convinced that he has shattered this theory by the two following arguments: (1) According to Marx, agricultural capital enters into the equalisation of the rate of profit, so that rent is created by a surplus profit that exceeds the average rate of profit. Mr. Bulgakov considers this to be false because the monopoly of land ownership eliminates free competition, which is necessary for the process of equalising the rate of profit. Agricultural capital does not enter into the process of equalising the rate of profit. (2) Absolute rent is merely a special case of differential rent, and it is erroneous to distinguish the one from the other. The distinction is based upon a completely arbitrary twofold interpretation of one and the same fact, namely, the monopoly ownership of one of the factors of production. Mr. Bulgakov is so convinced of the crushing effect of his arguments that he cannot refrain from pouring forth a stream of vehement words against Marx, such as petitio principii, [An argument based on the conclusion from a proposition that has still to be proved.—Ed.] non-Marxism, logical fetishism, Marx’s loss of capacity for mental flights, and so forth. And yet both those arguments are based on a rather crude error. The same one-sided vulgarisation of the subject which induced Mr. Bulgakov to raise one of the possible cases (diminishing productivity of additional investments of capital) to the level of the universal law of diminishing returns brings him in the present instance to employ the concept “monopoly” uncritically and to convert it into something universal. In doing so, he confuses the results which accrue under the capitalist organisation of agriculture from the limitedness of land, on the one hand, and from private property in land, on the other. These are two different things, as we shall explain.

“The condition, although not the source, of the appearance of ground-rent,” writes Mr. Bulgakov, “is the same as that which gave rise to the possibility of the monopolisation of land—the fact that the productivity of the land is limited, while man’s growing need for it is limitless” (I, 90). Instead of “the productivity of the land is limited”, he should have said, “land is limited”. (As we have shown, limitedness of the productivity of the land implies “limitedness” of the given technical level, the given state of the productive forces.) Under the capitalist system of society, the limitedness of land does indeed presuppose monopolisation of land, but of land as an object of economy and not as an object of property rights. The assumption of the capitalist organisation of agriculture necessarily includes the assumption that all the land is occupied by separate private enterprises; but it in no way includes the assumption that the whole of the land is the private property of those farmers, or of other persons, or that it is, in general, private property. The monopoly of landownership based on property rights and the monopoly of the land economy are two entirely different things, not only logically, but historically. Logically, we can quite easily imagine a purely capitalist organisation of agriculture in which private property in land is entirely absent, in which the land is the property of the state, or of a village commune, etc. In actual practice we see that in all developed capitalist countries the whole of the land is occupied by separate, private enterprises; but these enterprises exploit not only their own lands, but also those rented from other landowners, from the state, or from village communes (e.g., in Russia, where, as is well known, the private enterprises established on peasant communal lands are principally capitalist peasant enterprises). Not without reason did Marx, at the very beginning of his analysis of rent, observe that the capitalist mode of production meets in its first stages (and subordinates to itself) the most varied forms of landed property: from clan property[5] and feudal landed property down to the property of the peasant commune.

Thus, the limitedness of land necessarily presupposes only the monopolisation of the economy of the land (under the domination of capitalism). The question arises: what are the necessary consequences of this monopolisation in relation to the problem of rent? The limitedness of land results in the price of grain being determined by the conditions of production, not on the average land, but on the worst land under cultivation. This price of grain enables the farmer (= the capitalist entrepreneur in agriculture) to cover his cost of production and gives him the average rate of profit on his capital. The farmer on the better land obtains an additional profit, which forms differential rent. The question as to whether private property in land exists has nothing whatever to do with the question of the formation of differential rent, which is inevitable in capitalist agriculture even on communal, state, or non-private lands. The only consequence of the limitedness of land under capitalism is the formation of differential rent arising out of the difference in the productivity of various investments of capital. Mr. Bulgakov sees a second consequence in the elimination of free competition in agriculture when he says that the absence of this free competition prevents agricultural capital from participating in the formation of average profit. Obviously, he confuses the question of land cultivation with the right of property in land. The only thing that logically follows from the limitedness of land (irrespective of private property in land) is that the land will be entirely occupied by capitalist farmers; but it by no means follows that free competition among those farmers will necessarily be restricted in any way. Limitedness of land is a general phenomenon which inevitably leaves its impress upon the whole of capitalist agriculture. The logical unsoundness of confusing these different things is clearly confirmed by history. We shall not speak of England, where the separation of landownership from land cultivation is obvious, where free competition among farmers is almost limitless, where capital obtained from commerce and industry was and is invested in agriculture on the widest scale. But in all other capitalist countries (not withstanding the opinion of Mr. Bulgakov, who, following Mr. Struve, vainly strives to place “English” rent in a special category) the same process of the separation of landownership from land cultivation is actual, although in extremely varied forms (leases, mortgages). In failing to see this process (strongly emphasised by Marx), Mr. Bulgakov has failed to see the main thing. In all European countries, after the fall of serfdom, we see the decay of landownership based on social-estates, the mobilisation of landed property, the investment of merchant and industrial capital in agriculture, an increase in tenant farming and an increase in the mortgaging of land. In Russia also, despite the most pronounced survivals of serfdom, we see after the Reform[1] increased purchasing of land by peasants, commoners, and merchants, and increased leasing of privately-owned, state, and village communal lands, etc., etc. What do all these phenomena prove? They prove that free competition has entered agriculture—despite the monopoly of landed property and regardless of the infinite variety of its forms. In all capitalist countries at the present time, every owner of capital can invest his money in agriculture (by purchasing or leasing land) as easily, or almost as easily, as he can invest in any branch of commerce or industry.

In arguing against Marx’s theory of differential rent, Mr. Bulgakov says that “all these differences [differences in the conditions of the production of agricultural products] are contradictory and may [our italics] mutually eliminate one another; as Rodbertus pointed out, distance may be counteracted by fertility, different degrees of fertility may be equalised by more intensive cultivation of the more fertile plots” (I, 81). A pity, indeed, that our strict scientist should have forgotten that Marx noted this fact and was able to appraise it not so one-sidedly. Marx wrote: ". . . It is evident that these two different causes of differential rent— fertility and location [of plots of land]—may work in opposite directions. A certain plot of land may be very favourably located and yet be very poor in fertility, and vice versa. This circumstance is important, for it explains how it is possible that bringing into cultivation the land of a certain country may equally well proceed from the better to the worse land as vice versa. Finally, it is clear that the progress of social production in general has, on the one hand, the effect of evening out differences arising from location [of plots of land] as a cause of ground-rent, by creating local markets and improving locations by establishing communication and transportation facilities; on the other hand, it increases the differences in individual locations of plots of land by separating agriculture from manufacturing and forming large centres of production, on the one hand, while relatively isolating agricultural districts [relative Vereinsamung des Landes] on the other” (Das Kapital, III, 2, S. 190).[6] Thus, while Mr. Bulgakov triumphantly repeats the long-known references to the possibility of the mutual elimination of the differences, Marx presents the further problem of the transformation of this possibility into reality and shows that, simultaneously with equalising influences, there are to be observed differentiating influences. The final result of these mutually contradictory influences is, as everyone knows, that in all countries plots of land differ considerably both in fertility and in location. Mr. Bulgakov’s objection merely reveals that he has not given any thought whatsoever to his observations.

Continuing his argument, Mr. Bulgakov says that the conception of the last and least productive investment of labour and capital is “employed uncritically by both Ricardo and Marx. It is not difficult to see what an arbitrary element is introduced by this conception: let the amount of capital invested in land be equal to 1Oa, and let each successive a represent a diminishing productivity; the total product of the soil will be A.Obviously, the average productivity of each a will be equal to A/10; and if the total capital is regarded as a single whole, then the price will be determined precisely by this average productivity” (I, 82). Obviously, we say in reply to this, behind his florid phrases about the “limited productivity of the land” Mr. Bulgakov failed to see a trifle: the limitedness of land. This limitedness, irrespective of the form of property in land, creates a certain kind of monopoly, i.e., since all the land is occupied by farmers, and since there is a demand for the whole of the grain produced on the whole of the land, including the worst land and the remotest from the market, it is clear that the price of grain is determined by the price of production on the worst land (or the price of production connected with the last and least productive investment of capital). Mr. Bulgakov’s “average productivity” is a futile exercise in arithmetic, for the limitedness of land prevents the actual formation of this average. For this “average productivity” to form and to determine the prices, every capitalist must, in general, not only be able to invest capital in agriculture (to the extent that free competition, as we have said, exists in agriculture), but he must be able at all times to establish new agricultural enterprises in addition to those already existing. If this were possible, there would be no difference whatever between agriculture and industry, and rent could not come into existence. But precisely because of the limitedness of land, this is not the case.

To proceed. Until now we have pursued our argument without taking into account the question of property in land; we have seen that this method was necessary for logical considerations, as well as for the reason that historical data show that capitalist agriculture emerged and developed under various forms of landownership. Let us now introduce this new condition. Let us assume that all land is privately owned. How will this affect rent? Differential rent will be collected by the landowner from the farmer on the basis of his right of ownership. Since differential rent is the surplus profit over and above the normal, average profit on capital, and since free competition in the sense of the free investment of capital in agriculture exists (is being created by capitalist development), the landowner will always find a farmer who will be satisfied with the average profit and who will give him the surplus profit. Private property in land does not create differential rent; it merely transfers it from the hands of the farmer to the hands of the landowner. Is the influence of private landownership restricted to that? Can we assume that the landowner will permit the farmer to exploit gratis the worst and most inconveniently located land, which only produces, the average profit on capital? Naturally, not. Landownership is a monopoly, and on the basis of this monopoly the landowner demands payment from the farmer for this land also. That payment will be absolute rent, which has no connection whatever with the difference in productivity of various investments of capital, and which has its genesis in the private owner ship of land. In accusing Marx of making an arbitrary, two fold interpretation of the same monopoly, Mr. Bulgakov did not take the trouble to consider that we are actually dealing with a twofold monopoly. In the first place, we have the monopoly (capitalist) of land economy. This monopoly originates in the limitedness of land, and is therefore inevitable in any capitalist society. This monopoly leads to the determination of the price of grain by the conditions of production on the worst land; the surplus profit obtained by the investment of capital on belier land, or by a more productive investment of capital, forms differential rent. This rent comes into being quite independently of private property in land, which simply enables the landowner to take it from the farmer. In the second place, we have the monopoly of private property in land. Neither logically nor historically is this monopoly inseverably linked with the previous monopoly.[2] There is nothing in this monopoly that is essential to capitalist society and to the capitalist organisation of agriculture. On the one hand, we can quite easily conceive of capitalist agriculture without private property in land; indeed, many consistent bourgeois economists have demanded the nationalisation of land. On the other hand, even in practice we meet with the capitalist organisation of agriculture without private ownership of land, e.g., on state and village-commune lands. Consequently, it is necessary to distinguish between these two kinds of monopolies, as well as to recognise that absolute rent, which is engendered by private property in land, exists side by side with differential rent.[3]

Marx explains the possibility of the formation of absolute rent from the surplus-value of agricultural capital by the fact that in agriculture the share of variable capital in the total composition of capital is above the average (a quite natural assumption in view of the undoubted backwardness of agricultural as compared with industrial technique). This being the case, it follows that the value of agricultural products, generally speaking, is higher than the cost of their production, and that surplus-value is higher than profit. The monopoly of private property in land, however, prevents this surplus from passing wholly into the process of equalising profits, and absolute rent is taken from this surplus.[4]

Mr. Bulgakov is greatly dissatisfied with this explanation and he exclaims: “What kind of thing is this surplus-value, which, like cloth or cotton, or some other commodity, can suffice or not suffice to cover a possible demand? In the first place, it is not a material thing, it is a concept, which serves to express a definite social relationship of production” (I, 105). This contrasting of a “material thing” to a “concept” is a striking example of the scholasticism which is now so freely offered in the guise of “criticism”. What would be the use of a “concept” of the share of the social product if there were not definite “material things” corresponding to that concept? Surplus-value is the money equivalent of the surplus product, which consists of a definite share of cloth, cotton, grain, and of all other commodities (the word “definite” must not, of course, be understood in the sense that science can concretely define that share, but in the sense that the conditions which, in general outline, define the dimensions of this share are known). In agriculture, the surplus product is larger (in proportion to the capital) than in other branches of industry, and this surplus (which does not enter into the equalisation of profit owing to the monopoly of private property in land) may, naturally, “suffice or not suffice to cover the demand” of the monopolist landowner.

We shall not burden the reader with a detailed exposition of the theory of rent which Mr. Bulgakov has created, as he modestly remarks, “by his own efforts”, “pursuing his own path” (I, 111). A few remarks will suffice to characterise this product of the “last and least productive investment” of professorial “effort”. The “new” theory of rent is brewed according to the ancient recipe: “What is worth doing at all is worth doing thoroughly”. Since free competition exists, then without any restrictions (although absolutely free competition has nowhere and at no time existed). Since monopoly exists, there is nothing more to be said. Consequently, rent is not taken from surplus-value, and not even from the agricultural product; it is taken from the product of non agricultural labour; it is simply a tribute, a tax, a deduction from the total social product, a promissory note in favour of the landlord. “Agricultural capital, with its profit, and agricultural labour, agriculture in general as a sphere of investment for capital and labour, are therefore a status in statu* [A state within a state.—Ed.] in the kingdom of capitalism.... All [sic!] definitions of capital, surplus-value, wages, and value generally are imaginary quantities when applied to agriculture” (I, 99).

So, now everything is clear: both capitalists and wage- workers in agriculture are imaginary quantities. But if Mr. Bulgakov at times wanders into the clouds, he, at others, argues not altogether irrationally. Fourteen pages farther on we read: “The production of agricultural products costs society a certain quantity of labour; that is the value of these products.”Excellent. Consequently, at least the “definition” of value is not altogether an imaginary quantity. Farther ’we read: “Since production is organised on a capitalist basis, and since capital stands at the head of production, the price of grain will be determined by the price of production, that is, the productivity of the given labour and capital invested will be calculated according to average social productivity." Fine! Consequently, the “definitions” of capital, surplus-value, and wages are not altogether imaginary quantities. Consequently, free competition (although not absolutely free) exists; for unless capital could flow from agriculture into industry and vice versa, “the calculation of productivity according to average social productivity” would be impossible. Again: “The monopoly in land causes price to rise above value to the limits permitted by market conditions.” Excellent! But where has Mr. Bulgakov seen that tribute, taxes, promissory notes, etc., are dependent upon market conditions? If the monopoly causes price to rise to the limits permitted by market conditions, then the only difference between the “new” theory of rent and the “old” is this: the author, pursuing “his own path”, failed to understand the difference between the influence of the limitedness of land and the influence of private property in land, on the one hand, and the connection between the concept “monopoly” and the concept “the last and least productive investment of labour and capital”, on the other. Is it surprising, therefore, that seven pages farther on (I, 120) Mr. Bulgakov should completely lose sight of “his own” theory and argue about the “method of distributing this [agricultural] product among the landowner, the capitalist farmer, and the agricultural labourers”? A brilliant finale to a brilliant criticism! A remarkable outcome of the new Bulgakov theory of rent, which, henceforth, will enrich the science of political economy!

Vladimir Ilyich Lenin

The Agrarian Question and the “Critics of Marx”

III