Part Six — The Transformation of Surplus Profit into Ground-Rent Chapters 37–47. Differential rent in its two forms, absolute ground-rent, and the genesis of capitalist ground-rent.

Ground-rent is the third great form into which surplus-value is transformed and distributed, and the most extensive Part of the volume. Its problem is set by the results of Part Two. Competition equalizes the rate of profit by letting capital flow freely between branches; but landed property is a monopoly that bars free entry to the land, and this monopoly allows the landowner to intercept, as rent, a surplus profit that would otherwise be competed away. Marx's task is to explain ground-rent strictly within the law of value — to show that rent is not a payment out of nothing, nor a mysterious productivity of the soil, but a portion of surplus-value produced by agricultural labour and appropriated by the landowner by virtue of a monopoly. He distinguishes two great forms. Differential rent arises from differences between plots — in fertility (Form I) or in the productivity of successive capital investments on the same plot (Form II) — which let the better-placed capitals produce below the regulating price of production and pocket a surplus profit that the landlord takes as rent. Absolute rent arises from landed property as such: because the monopoly prevents capital from flowing into agriculture freely, and because agriculture has historically a lower organic composition than industry (so its products contain more surplus-value than their price of production would allow), agricultural products can sell above their price of production, and the excess is absolute rent. Chapter 37 sets up the framework; Chapters 38–44 develop differential rent in exhaustive arithmetical detail; Chapter 45 derives absolute rent; Chapters 46–47 treat the rent of buildings and mines, the price of land, and — closing the whole analysis of rent — the genesis of capitalist ground-rent out of its pre-capitalist forms of labour-rent, rent in kind, and money-rent. The brief holds the essential concepts and movements and reconstructs the long quantitative demonstrations rather than reproducing them.

Marx sets the framework by insisting that capitalist ground-rent presupposes capitalist agriculture: three classes confront one another on the land — the landowner, the capitalist farmer who rents the land and employs wage-labourers, and the agricultural workers. Rent is what the farmer pays the landowner for the use of the soil, over and above the average profit on his capital. The whole analysis therefore concerns not any payment for land but the specific economic form in which a surplus above the average profit is claimed by the owner of a natural monopoly. Marx is emphatic that rent must be explained as a transformed portion of surplus-value, never as a gift of nature: the soil adds use-value, but only labour adds value, and rent is a share of the surplus labour of the agricultural workers, intercepted by landed property. The governing category is surplus profit — profit above the average — which under the monopoly of land is fixed and appropriated as rent.

The chapter opens with the juridical fact on which everything rests.

Landed property presupposes that certain persons enjoy the monopoly of disposing of particular portions of the globe as exclusive spheres of their private will to the exclusion of all others. Once this is given, it is a question of developing the economic value of this monopoly, i.e. valorizing it, on the basis of capitalist production.

Marx, Capital III, page 752.

Its historical presupposition is the separation of the producer from the land, established in Volume I's account of primitive accumulation.

In the section on ‘Primitive Accumulation’ (Volume 1, Part 8) we saw how this mode of production presupposes on the one hand that the direct producers are freed from the position of a mere appendage of the soil (in the form of bondsmen, serfs, slaves, etc.) and on the other hand the expropriation of the mass of the people from the land. To that extent, the monopoly of landed property is a historical precondition for the capitalist mode of production and remains its permanent foundation, as with all previous modes of production based on the exploitation of the masses in one form or the other.

Marx, Capital III, page 753.

Capitalism then completes the divorce, stripping the land relation of every social integument until only the monetary tax of the monopolist remains.

It is one of the great results of the capitalist mode of production that on the one hand it transforms agriculture from a merely empirical set of procedures, mechanically handed down and practised by the most undeveloped portion of society, into a conscious scientific application of agronomy, in so far as this is at all possible within the conditions of private property; that on the one hand it detaches landed property completely from relations of lordship and servitude, while on the other hand it completely separates the land as a condition of labour from landed property and the landlord, for whom moreover this land represents nothing but a certain monetary tax that his monopoly permits him to extract from the industrial capitalist, the farmer. It undoes the connection to such an extent that the landed proprietor can spend his entire life in Constantinople, while his landed property remains in Scotland.

Marx, Capital III, page 754.

And the definition of rent itself arrives with the three classes of the framework.

Ground-rent is thus the form in which landed property is economically realized, valorized. We have together here, moreover, and confronting one another, all three classes that make up the framework of modern society – wage-labourer, industrial capitalist, landowner.

Marx, Capital III, page 756.