Economic and Philosophic Manuscripts of 1844

Rent is a primary means by which capitalists extract wealth without having to work. They make money for reasons that have nothing to do with their skills or efforts but only the fact of ownership. The value of the land does in part depend on its fertility or the presence of other natural resources, but capitalism makes the mistake of confusing the value of whatever is on the land with the money due to the landowner for the use of that land, even though the landlord is in no way responsible for its value. Marx turns to the struggle between tenant and landlord, which he describes as the most important in ordering capitalist society. The goal of landlords is to provide their tenants with just enough to maintain a productive stock of materials and pay wages for laborers and other production costs, along with any profits commensurate with local practice. Everything else goes to the landowner, and it does not take long before rents match and then exceed the overall value of the property. Landlords are at an advantage because they have a permanent and exclusive claim on the property, so they can grant and without leases on its usage at their discretion. This then allows them to amass profits over time which further tips the balance in their favor.

The value of rent varies based on different kinds of products. Food production is usually efficient enough to outpace labor costs and furnish a healthy rent for the landlord, especially because there is a constant and universal demand for it. It is not the food that generates high rents but rather the infrastructure around it that improves and cultivates the land. As land becomes more productive, the landlord can increase rents, since technological development helps to add value while keeping labor and production costs relatively low. Adam Smith concludes from this a mutual interest between landowner and society since technological improvement should improve the overall quality of life while also making the landlord wealthy. In reality, the landowner is mostly interested in exerting a monopoly, and economic development helps them to achieve it. Growing wealth usually entails a growing population, and landlords will make sure to squeeze as many people as possible onto existing properties rather than invest in additional housing, while at the same time lowering wages due to intensifying competition for jobs.

Just as Marx did with labor and capital, he proceeds from the fundamental antagonism between rival groups. Like capitalists, large landowners can accrue revenue based on interest payments, so that they make money off of money, while smaller landowners have to invest more of their own capital into improving the quality of the property. Large properties are uniquely equipped to control certain aspects of production, such as the raising of livestock, which then influences the entire supply chain, even for properties not under their control. This makes it possible for the large landowner to shift their production to drive down the rents of the small landowner until effectively turning them into a wholly owned subsidiary. The result is the fusion of the landowner and the capitalist so that the owners of agricultural land and the industrial means of production become the same.

The alienation of the laborer from the land is not a new phenomenon. Medieval Europe featured a system of serfdom in which workers were essentially assets, and ownership of the land was hereditary. For some, this era carries an element of romantic nostalgia, as feudal landlords made little effort to improve the land, and serfs may have even had a greater right to the fruits of their labor than modern workers. Marx insists that the entire notion of private property, whether in its medieval or modern variant, is the cause of social exploitation by turning both land and people into economic assets. The main difference is that medieval ownership was bound up in the person of the lord, whereas the modern capitalist is just a vessel for their money, which truly dominates. Any effort to regulate private property and divide it into many hands would not succeed because capitalism has an inevitable tendency toward monopoly. In Marx’s view, only the abolition of private property can restore the organic connection between workers, their labor, and the earth. For this to happen, capitalism must undergo a process of self-destruction, just as feudalism did. The large landowners of the past planted the seeds of their destruction by driving people from the countryside into the cities, feeding the system of industrial capitalism that would ultimately consume them. Sooner or later, the beneficiaries of monopoly capitalism will become so extravagant and complacent, while those around them starve, that revolution will become inevitable.