The struggle to abolish groundrent

A model of pure capitalism where there are only two classes, capitalists and workers, assumes that agriculture forms only a branch of industry completely under the sway of capital. In other words we abstract from the category of groundrent, from the existence of landlords. But how are the results of this analysis modified once this assumption is dropped?

Modern, purely capitalist, groundrent is simply a tax levied on the profits of capital by the landlord. To the landlord ‘the land merely represents a certain money assessment which he collects by virtue of his monopoly from the industrial capitalist’ (Marx, 1959, p. 618). When Marx refers to the levelling of surplus value to average profit he says:

This appropriation and distribution of surplus value, or surplus product, on the part of capital, however, has its barrier in landed property. Just as the operating capitalist pumps surplus labour, and thereby surplus value and surplus product in the form of profit, out of the labourer, so the landlord in turn pumps a portion of this surplus value ... out of the capitalist in the form of rent. (p. 820)

Rent thus plays a role in depressing the level of the average rate of profit, it speeds up the breakdown tendency of capitalism. Spokesmen of capitalism have always been hostile to groundrent because ‘landed property differs from other kinds of property in that it appears superfluous and harmful at a certain stage of development, even from the point of view of capitalism’ (p. 622). Ricardo’s writings were directed against the interests of the landlords and their supporters. The land reform movements of the latter part of the nineteenth century sprang fundamentally from the same source.