II.4. Property and Rent

In each historical epoch property is differently developed, and in a series of social relations entirely different. Thus, to define bourgeois property is nothing other than to explain all the social relations of bourgeois production.

To pretend to give a definition of property as of an independent relation, a separate category, an abstract and eternal idea, can only be an illusion of metaphysics or of jurisprudence.

M. Proudhon, while professing to speak of property in general, deals only with property in land, the rent of land.

“The origin of rent, as property, is, so to speak, extra-economic; it exists in certain psychological and moral considerations which are only remotely connected with the production of wealth.” (Vol. II., p. 266.)

Thus M. Proudhon recognises his inability to comprehend the economic origin of rent and of property. He acknowledges that this incapacity obliges him to have recourse to psychological and moral considerations, which are indeed only remotely connected with the production of wealth, being closely allied to the exigencies of his historical views. M. Proudhon affirms that in the origin of property there is something mystic and mysterious. But to see mystery in the origin of property, that is to say, to transform the relation of production itself to the distribution of the instruments of production into a mystery, is that not, to use the language of M. Proudhon, to renounce all pretension to economic science?

M. Proudhon is “compelled to recall that at the seventh epoch of economic evolution—credit—the fiction having caused the reality to vanish, human activity threatening to lose itself in space, it became necessary to attach it more closely to nature; but rent was the price of this new contract.”

“The man with forty crowns” represents a Proudhon to come: “My Lord the creator, if you please: each is master in his world; but you will never make me believe that this world where we are is of glass.” In such a world, where credit was a means for losing one’s self in space, it is quite possible for property to be necessary in order to attach man to nature. In the world of real people, where property in land always precedes credit, the horror vacui of M. Proudhon could not exist.

The existence of rent once admitted, whatever may have been its origin, it is contradictorily debated between farmer and landlord. What is the last term of this debate—in other words, what is the mean quota of rent? Here is what M. Proudhon says:

“The theory of Ricardo answers this question. At the beginning of society, when man, newly arrived on earth, had before him only immense forests, when the earth was vast and industry was in its infancy, rent was nil. Land, not yet cultivated by labor, was an object of utility; it was not a value in exchange. It was common, not social. Little by little the multiplication of families and the progress of agriculture caused the price of land to make itself felt. Labor gave its value to the soil: from that sprang rent. The more fruitful a field, with the same quantity of labor, the more it was esteemed; moreover, the tendency of the proprietors was always to attribute to themselves the whole of the fruits of the soil, less the wages of the cultivator, that is to say less the cost of production. Thus property followed in the train of labor to take from it all that which, in the product, exceeded the actual cost. Property fulfilled a mystic duty by representing the community face to face with the cultivator. In the design of Providence the cultivator is nothing but a responsible laborer, who must give an account to society of all that he reaps in excess of his legitimate wages..... By essence and destination, therefore, rent is an instrument of distributive justice, one of the thousand means which economic genius puts into operation in order to arrive at equality. It is an immense valuation executed contradictorily by the landlords and farmers, without the possibility of collision, in a superior interest, and the definite result of which must be to equalise the possession of the land between the exploiters of the soil and the industrial community..... It required nothing less than this magic of property to drag from the cultivator the excess of the product which he could not be prevented from regarding as his, and of which he believed himself to be the sole author. Rent, or rather property, broke down agricultural egoism and created a solidarity to which no power, no partition of the land, could have given birth..... At present, the moral effect of property secured, it only remains to distribute the rent.”

All this jumble of words may be reduced to this: Ricardo says that the excess of the price of agricultural products over their cost of production, including the ordinary profit and interest of capital, gives the measure of the rent. M. Proudhon does better. He makes the proprietor intervene, as a deus ex machina, who drags from the cultivator all the excess of his production over the actual cost of production. He makes use of the intervention of the proprietor, to explain property, of the landlord, to explain rent. He answers the problem by restating the same problem and increasing it by a syllable.

We may further observe that in determining rent by the difference of fertility of the soil, M. Proudhon assigns to it a new origin, since land, before being estimated according to the different degrees of fertility, “was not,” according to him, “a value in exchange, but was common.” What has it now become, this fiction of rent which sprang from the necessity of attaching to earth man who was likely to lose himself in the infinity of space?

Let us now extricate the doctrine of Ricardo from the providential, allegorical and mystical phrases in which M. Proudhon has been careful to envelop it.

Rent, in the Ricardian sense, is property in land in the bourgeois state—that is to say, feudal property which has been subjected to the conditions of bourgeois production.

We have seen that, according to Ricardo, the price of all products is finally determined by the cost of production including in that industrial profit—in other terms, by the time of labor employed. In the manufacturing industry the price of the product obtained by the minimum of labor regulates the price of all other commodities of the same kind, provided that the least costly and most productive instruments of production may be multiplied to infinity, and that, therefore, free competition necessarily creates a market price—that is to say, a common price—for all the products of the same kind.

In agricultural industry, on the contrary, it is the price of the product obtained by the greatest amount of labor which regulates the price of all the products of the same kind. In the first place, we cannot, as in manufacturing industry, multiply at will the instruments of production of the same degree of productivity—that is to say, the soils of the same degree of fertility. Then, in proportion as population grows, it is necessary to exploit soils of inferior quality, or to expend on the same soil additional capital proportionately less productive than the first. In either case a larger quantity of labor is expended in order to obtain a product proportionally smaller. The needs of the population having rendered this increase of labor necessary, the product of the soil more costly to cultivate has its sale forced as well as that of the more cheaply cultivated soil. Competition levels the market price, and the product of the better soil will fetch as high a price as that of the inferior soil. It is the excess of the price of the products of the superior soil over their cost of production which constitutes rent. If there were always at disposal soils of the same degree of fertility, if, as in manufacturing industry, recourse could always be had to the less costly and more productive machinery, or if the second expenditure of capital produced as much as the first, then the price of agricultural products would be determined by the price of the commodities produced by the better instruments of production, as we have seen in the price of manufactured articles. But also, from this moment, rent would have disappeared.

For the theory of Ricardo to be generally true, it is further necessary that capital could be freely applied to the different branches of industry; that a strongly developed competition between the capitalists should have reduced profits to an equal rate; that the farmer should be no more than an industrial capitalist who asks for the employment of his capital upon the land, a profit equal to that which he would draw from his capital applied to any manufacture; that agricultural exploitation should be subject to the régime of the great industry; in fine, that the landed proprietor himself should aim at nothing more than the monetary revenue.

Rent may no longer exist, as is the case in Ireland, although farming there has been developed to an advanced degree. Rent being the excess, not only over wages, but over the industrial profit, it cannot exist where the revenue of the proprietor is only a previous deduction from wages.

But, far from making of the exploiter of the soil, of the farmer, a simple laborer, and “dragging from the peasant the excess of the product which he cannot be prevented from regarding as his own,” rent sets before the landed proprietor the industrial capitalist, instead of the slave, the serf, the tributary, the wage-worker.

Further, a considerable time elapsed before the feudal farmer was replaced by the industrial capitalist. In Germany, for example, this transformation did not begin until the last third of the eighteenth century. It is only in England that this relation between the industrial capitalist and the landed proprietor has been fully developed.

So long as there was only the cultivator of M. Proudhon there was no rent. When there is rent the peasant is not the farmer, but the workman, the employé of the farmer. The degradation of the cultivator reduced to the position of simple workman, day-laborer, wage-worker, laboring for the industrial capitalist; the intervention of the industrial capitalist, exploiting the land like any other factory; the transformation of the landed proprietor from a petty sovereign into a vulgar usurer: those are the different relations expressed by rent.

Rent, in the Ricardian sense, is patriarchal agriculture transformed into commercial industry, industrial capital applied to the land, the bourgeoisie of the towns transplanted into the country. Rent, instead of “attaching man to nature,” has only attached the exploitation of the land to competition. Once constituted as rent, landed property itself is the result of competition, since thenceforward it depends upon the saleable value of agricultural products. As rent, landed property is mobilised and becomes an effect of commerce. Rent is possible only from the moment in which the development of the industry of the towns and the social organisation resulting therefrom force the landlord to have regard only to venal profit, to the monetary relation of his agricultural products; to see, in fine, in his landed property, only a machine for making money. Rent has so perfectly detached the landed proprietor from the soil, from nature, that he scarcely needs to know his lands, as we see in England. As to the farmer, the industrial capitalist and the agricultural laborer, they are no more attached to the soil which they cultivate than the capitalist and the workman in manufacture are attached to the cotton or the wood they use; they have regard only for the price of their exploitation, for the monetary product. To that fact is due the jeremiads of the reactionary parties who fervently pray for the return of feudalism, for the happy patriarchal life, for the simple and noble manners of our ancestors. The subjection of the soil to the laws which rule every other industry is and will always be the subject of interested condolences. Thus we might say that rent is the motive force which has cast idyllism into the historical movement.

Ricardo, after having supposed bourgeois production as necessary in order to determine rent, applies it nevertheless to landed property in every epoch in every country. These are the errors of all economists who regard the conditions of bourgeois production as eternal categories. From the providential object of rent, which is, for M. Proudhon, the transformation of the cultivator into a responsible workman, he goes on to the equalitarian reward of rent.

Rent, as we have just seen, is constituted by the equal price of the products of lands of unequal fertility in such wise that a hectolitre of wheat which has cost 10 francs is sold for 20 francs if the cost of production rises, for an inferior soil, to 20 francs. So long as necessity compels the purchase of all the agricultural products put upon the market, the market price is determined by the highest cost of production. It is, therefore, this equalisation of price, resulting from competition and not from the different fertility of soils, which secures for the proprietor of the superior soil a rent of 10 francs for each hectolitre which his farmer sells.

Let us for a moment suppose that the price of the wheat is determined by the labor-time necessary to produce it, and that in consequence the hectolitre of wheat obtained from the superior soil would be sold at 10 francs, while that obtained from the inferior soil would cost 20. That admitted, the mean market price would be 15 francs; while, according to the law of competition, it is 20 francs. If the mean price was 15 francs there would be nothing for distribution, either equalitarian or other, as there would be no rent. Rent exists only in consequence of the fact that the hectolitre of wheat, which cost the producer 10 francs, is sold for 20 francs. M. Proudhon supposes the equality of the market price, with unequal cost of production, in order to arrive at the equalitarian distribution of the product of inequality.

We can understand such economists as Mill, Cherbulliez, Hilditch, and others, demanding that rent should be handed over to the State to be used for the remission of taxation. That is only the frank expression of the hate which the industrial capitalist feels for the landed proprietor, who appears to him as a useless incumbrance, a superfluity in the otherwise harmonious whole of bourgeois production.

But to first take twenty francs for the hectolitre of wheat in order to afterwards make a general distribution of the ten francs too much charged to the consumers,—that would indeed be sufficient to make the social genius pursue its zigzag way in melancholy, ready to knock its head against any corner.

Rent becomes, under the pen of M. Proudhon, “an immense land valuation made independently by the landlords and the farmers in a superior interest, the definite result of which must be to equalise the possession of the land between the exploiters of the soil and the manufacturing classes.”

In order for any valuation whatever, determined by rent, to be of practical utility, it is necessary always to remain in the conditions of existing society.

But we have demonstrated that the farm rent, paid by the farmer to the landlord, expresses almost exactly the rent only in those countries most advanced in industry and commerce. Yet this farm rent often includes the interest paid to the landlord for the capital incorporated in the land. The situation of soils, the neighborhood of towns, and very many other circumstances, influence the farm hire and modify the rent. These arbitrary reasons will suffice to prove the inexactitude of a land valuation based on rent.

On the other hand rent cannot be a constant indication of the degree of fertility of any land, since the modern application of chemistry constantly changes the nature of the soil, while it is only in recent years that geological knowledge has begun to destroy all the old estimate of relative fertility. It is only about twenty years ago that vast areas in the eastern countries of England were brought into cultivation, they had been left uncultivated for want of appreciating correctly the relations between the nature of the upper soil and of the lower stratum.

Thus history, so far from giving, in rent, a valuation completely formed, simply changes, completely reverses, the valuations already formed.

In fine, fertility is not so much a natural quality as might reasonably be supposed, but is intimately related to existing social conditions. A soil may be very fertile for the raising of corn, yet, nevertheless, the state of the market may induce the cultivator to turn it into an artificial prairie and thus render it barren. M. Proudhon has improvised his valuation, which is not even worth the ordinary valuation, simply in order to give a corporeal form to the providentially equalitarian object of rent.

“Rent,” continues M. Proudhon, “is the interest paid for a capital which never perishes, namely land. And as this capital is not susceptible of any increase as to its material but only to an indefinite improvement in its use, it results that, while the interest or profit on a loan (mutuum) tends to constantly diminish in consequence of the abundance of capital, rent tends to constantly increase by the perfection of the industry from which results the improvement in the usages of the soil...... Such, in its essence, is rent.” (Vol. II., p. 265.)

This time, M. Proudhon sees in rent all the attributes of interest, so far as it arises from a capital of a specific nature. This capital is land, eternal capital, “which is not susceptible of any increase as to its material, but only to an indefinite improvement in its use.” In the progressive march of civilisation interest has a constant tendency to fall, while rent constantly tends to rise. Interest falls on account of the abundance of capital; rent rises with the improvements made in industry which have the effect of constantly improving the use of land.

Such is, in its essence, the opinion of M. Proudhon.

Let us begin by examining at what point it is correct to say that rent is the interest on capital.

For the landowner himself rent represents interest on the capital which the land has cost him, or which it would return to him if he sold it. But in buying or selling land, he only buys or sells rent. The price which he has paid in order to acquire the rent is regulated by the general rate of interest and has nothing to do with the nature of rent itself. The interest on capital invested in land is, in general, less than the interest on capital sunk in manufacture or commerce. Thus for him who does not distinguish the interest which land represents to the proprietor from rent itself, the interest on capital in land diminishes much more than the interest on other capitals. But it is not here a question of the price of the sale or purchase of rent, of the saleable value of rent, of capitalized rent, it is a question of rent itself.

The hire of a farm may imply in addition to the rent properly so-called, interest on capital incorporated in the land. Then, the proprietor receives this part of the farm hire not as landlord, but as capitalist; that is, however, not the rent, properly speaking, with which we have to deal.

Land, so long as it is not exploited as a means of production, is not capital. Capital in land can be augmented as well as all other means of production. Nothing is added to the material, to speak the language of M. Proudhon, but the soils which serve as instruments of production are multiplied. By merely applying additional capital to land already transformed into means of production land-capital may be augmented without adding anything to the material land, that is to say to the extent of the land. The material land of M. Proudhon has the bounds of the earth for its limits. As to the eternity which he attributes to land we readily grant that, as matter, it has this quality. As capital, land is not more eternal than any other capital.

Gold and silver, which pay interest, are as durable and eternal as land. If the price of gold and silver falls while that of land rises, that is certainly not due to the more or less eternal nature of land.

Land-capital is a fixed capital, but fixed capital is used up as well as circulating capital. The improvements effected in the soil need to be reproduced and maintained; they only last a certain time, a quality which they possess in common with all other improvements of which use is made in order to transform matter into means of production. If land-capital were eternal certain lands would present an entirely different aspect to that which they bear to-day, and we should see the Roman Campagna, Sicily, and Palestine, in all the splendor of their ancient prosperity.

There are, moreover, cases where land-capital may disappear, even while the improvements remain incorporated in the land.

In the first place this actually happens every time that rent, properly so-called, is extinguished by the competition of new and more fertile soils; further, the improvements which have a value at a certain period, cease to have that value from the moment that they become universal through the development of agricultural science.

The representative of land-capital is not the land-owner but the farmer. The revenue which land gives as capital is industrial interest and profit, and not rent. There are some lands which return this interest and profit, but which pay no rent.

To sum up, land in so far as it gives interest, is land-capital, and, as land-capital, it returns no rent, it does not constitute landed property. Rent results from the social relations in which exploitation is carried on. It cannot result from the nature, more or less fixed, more or less durable, of land. Rent proceeds from society and not from the soil.

According to M. Proudhon “the improvement in the use of land”—a result of “the improvement of industry,” is the cause of the constant rise of rent. This improvement, on the contrary, causes it to periodically fall.

In what, in general, does all improvement consist, whether it be in agriculture or in manufacture? It is to produce more with the same amount of labor, it is to produce as much, or even more, with less labor. Thanks to these improvements the farmer can dispense with the employment of a greater quantity of labor for a product proportionally less. He has no need then to have recourse to the inferior soils, and the portions of capital successively applied to the same land are equally productive. Therefore these improvements, so far from causing a constant rise of rent, as M. Proudhon says, are, on the contrary, so many temporary obstacles which oppose its rise.

The English landowners of the seventeenth century were so sensible of this truth that they strenuously opposed all agricultural progress, for fear of seeing their revenues diminish. (See Petty, an English economist of the time of Charles II.)