The Capitalist Class. By Karl Kautsky (continued)

Specially translated for the Socialist Party of Great Britain and approved by the Author.


Now whence does the capitalist class draw its income ? The owners of merchant’s capital and usurer’s capital derived their profit and interest originally by way of deductions from the property of persons dependent upon their assistance and mediation, and belonging to various sections of the community. The owners of industrial capital, however, obtain their profit by exploiting the propertyless wage-workers. But as the capitalist mode of production develops, so industrial capital gains the ascendancy over other kinds of capital, and subjects these to its service, as we have seen. This, however, is possible only by assigning to merchant’s and usurer’s capitals part of the surplus-value wrung from the wage-workers. Owing to this development the surplus-value produced by the proletarians became to a greater degree the only source from which the entire capitalist class derive their incomes. Just aa handicraft and peasant agriculture lose in economic significance and decreasingly influence the character of present-day Society, so do the old forms of merchant’s and usurer’s capital, which obtained their profit from the exploitation of non-capitalist sections of the community, lose their importance. To day there are already States without handicraft and peasantry—England for example. But none of the modern States is thinkable without the great industries. Anyone desirous of understanding modern forms of capitalism must start from industrial capital. It is in surplus-value, which is produced by capitalist industries, that is to be sought the most important and increasingly prominent sources of all profit.

We have in the previous chapter become acquainted with surplus-value, which is produced by the industrial proletarians and appropriated by the capitalists. We have also observed how the amount of surplus-value produced by each worker is increased by adding to the worker’s labour burden, by the introduction of labour-saving machinery and cheaper labour, etc. At the same time with the development of capitalist industry the number of the exploiters proletarians grows and the amount of surplus-value going to the capitalist class increases by leaps and bounds.

But as, unfortunately, “life’s joys are vouchsafed unmixed to no mortal,” the capitalist class have to divide their surplus-value, although this dividing is most hateful to them ; they must part with portions to the ground landlords and to the State. And the share taken by these two partners grows from year to year.



When we talk about the sections of the community who are becoming more and more the sole owners and exploiters, the monopolists of the means of production, we must distinguish between capitalists and landowners ; for the land is a means of production of a peculiar kind. It is the most indispensable of all: without it human activity is impossible. Even navigators of the sea or air need a point of departure and landing. But the soil is also a means of production incapable of increase at will. Yet until now it has not happened in a large area that every bit of soil has been cultivated by its inhabitants. Even in China there are still large plots of uncultivated laud.

Under the domination of peasant proprietorship in Europe during the middle ages the peasant owned his farm and agricultural land. Water, woodland, and pasture land were communal property, and uncultivated soil was so plentiful that everybody could be allowed to take possession of and cultivate such land as he had begun to bring into cultivation from the wilderness. Then commenced the development of commodity production with the consequences of which we have already become acquainted. The products of the soil became commodities. That reacted on the soil, which was also made a commodity possessing value. The single peasant communities and associations now endeavoured to restrict the circle of their members, and the latter began to regard the land they owned in common and partly (as in the case of forests and grazing land) also used in common, no longer as common property of the community and therefore inalienable, but as a kind of joint private property belonging only to the existing members and their heirs; property from which all members who subsequently joined the community were excluded. They were desirous of making the land a monopoly. But someone else came to covet the property of the community, namely, the feudal lord, who had been the protector of the common property. If this property in land, that had become so valuable was to be made private property, then he was anxious that it should pass into his possession. In most directions, especially where agriculture on a large scale was developed, the feudal lord succeeded in seizing the peasants’ common property. Peasant-hunting, the driving of some peasants from their homesteads, followed. Nearly all the soil, even that not under cultivation, now passed into private possession: the ownership of land became the privilege of the few. Thus owing to the economic development, particularly to the formation of large property in land, the soil had become a monopoly long before the existing area of cultivation was exhausted, and much before over-population could have been talked about. If, therefore, the land occupies an exceptional position as a means of production because it is incapable of being increased at will, that is not in consequence of all the available soil being already under cultivation, but is due to the fact—at least in civilised countries—that it has already been taken possession of by a minority. There a monopoly of quite a peculiar character arises. While the capitalist class has a monopoly of the means of production, there is within the capitalist class no monopoly of certain means of production by certain members of that class—at least, no permanent monopoly. Whenever a ring of capitalists is formed for monopolising a certain important invention—for instance, a new machine—other capitalists may always come along, who could also purchase this machine, or surpass the same by meariK of a new invention, or imitate it sooner or later. All this is impossible regarding property in land. Landowners have a monopoly not only as far as the non-possessing class is concerned, but also from the standpoint of the capitalist class.

The peculiar character of property in land is developed most acutely in England, where a small number of families bave possession o£ all the land, to which they hold on firmly and do not sell. Who ever requires land obtains the same on lease for a certain rent called ground-rent. (Strictly speaking, “rent” ard “ground-rent” are not synonymous. “Rent” generally includes a portion of interest on capital. For our purpose here, however, “rent” and “‘ground-rent” may be used as identical terms.) A capitalist desirous of having a factory or dwelling-house built, or of establishing a mine or a farm in England, cannot as a rule, purchase the land, but may only rent the same on lease.

In Germany the capitalist is mostly also the ground landlord ; the manufacturer owns the land upon which his factory stands ; the mine proprietor is also the owner of the land in which the pits are sunk ; while the owner of large tracts of agricultural land on the continent of Europe cultivates the same mostly on his own account instead of letting it to a farmer. When the capitalist carries on agriculture on his own soil, when he himself is ground landlord, he need naturally not share his surplus-value with another, But that does not materially alter the case; for he has, generally, only become ground landlord by paying to the previous owner of the farm a capital, the interest on which corresponds to the amount of ground-rent. Hence he pays the ground-rent anyhow, and in the one form as in the other it diminishes his profit.

But the monopoly character of landed property becomes more acute, the stronger the demand for land grows. As population increases, so the capitalist class become more in need of property in land. To the same extent ground-rent grows, that is to say, the total amount of ground rent paid in capitalist Society. The ground-rent of every farm need not increase. A farm yields under otherwise equal conditions the more ground rent the more fertile and the more favourably situated (lor instance, nearer to the market) it happens to be.

Into the laws of ground-rent we can, of course, not enter here. The opening up of new and fertile land can therefore cause the ground-rent of exhausted soil to go down ; the ground-rent of newly opened-up land will, however, only grow so much the more. Thus improvements in the means of transit may depress the ground-rent of a nearly situated area in favour of a more distant one. Both cases have happened during the last two decades. American ground-rents have risen, and indeed (in so far as agricultural protective tariffs have not acted in an opposite direction) at the expense of West European ground-rents. This, how ever, only applies to land used for agricultural purposes. In the towns ground-rent is everywhere rising most rapidly ; for the capitalist mode of production drives the great mass of the population more and more into the towns. Unfortunately, by this aggregation the profit of the industrial capitalists suffers nothing compared with the growing physical and mental degeneration of the toiling masses. And here we encounter the housing of the workers as a new source of their sufferings; but this is not the place to enter into that.

(To be continued)

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