The Development of Capitalism in Agriculture: The Theories of Kautsky, Lenin, and Chayanov

In this field as in others, social democracy reduced Marxism to an economistic level. The end of the nineteenth century in Europe saw the beginning of the third phase of the capitalist development in agriculture.

However, let us do justice to the Second International. While the popular version of social democracy saw the concentration of landownership as the only trend of evolution in agriculture, Karl Kautsky analyzed the capitalist domination of agriculture in more subtle and surprisingly modern terms in The Agrarian Question. Kautsky first noted the fact of resistance to concentration. He expanded on this, showing the contrast between the small peasant farm and the big capitalist farm in terms of ‘‘the harder work... on the part of the worker who produces on his own account, in contrast with the wage earner.” He drew the conclusion, as regards the small peasant, that ‘‘when the price obtained for his products, after deducting his expenses, is sufficient to pay for his labor, he can manage to live; he can forgo profit and ground rent.” Kautsky explicitly analyzed the problem of the relations between capitalism and agriculture in terms of political class alliances, in terms not of simple development of capitalist agriculture but of domination of industrial capitalism over noncapitalist or precapitalist rural forms and in terms of actual dispossession although, in theory, landownership was retained. Kautsky went on to describe the small peasant as ‘‘a serf of industrial capital.” He gave the specific example of the firm of Nestle at Vevey whose ‘‘inhabitants are outwardly owners of their lands but no longer free peasants.” Kautsky also analyzed the competition from overseas products, noting that ‘‘we can divide into two cate­gories the countries whose agriculture produces at lower cost than European agriculture: the plantations of oriental despots and the free or former colonies.” We shall be looking into these questions later.

As we know, Lenin borrowed extensively from Kautsky.¹¹ Thus it is with the assumption of the law of increasing concentration that he examined the devel­opment of capitalism in agriculture in Russia.

However, it was Chayanov who made a shrewd and penetrating analysis of the interaction between capitalism and agriculture.^{[16] [17]} Chayanov began with an analysis of the peasant mode of production which is noncapitalist, based on family units of peasant workers—owners of their land whose product is intended mainly for family consumption, although a small fraction of it is sold (to pay taxes and to satisfy an urban demand which in return offers manufactured goods in competition with cottage-industry products). In this mode, he noted, it is not possible to differentiate between the factors of production (land, capital, labor) as is very artificially done in the marginalist theory. The basic unit is both the production and the consumption, and commodity trading is of marginal importance: rural econ­omists are fully aware that peasant life is not simply concerned with production, as is the industrial enterprise; it is as much a way of life as a mode of production. With this in mind, Chayanov introduced the idea that the organization of production (the quantities of the various products, how intensive the method should be, etc.) depends on how the family’s needs are balanced against the hardship involved in the labor. This balance between the two factors is itself dependent on the size of the family (the ratio between nonproductive and productive members) and the size of the family plot. And since the size of the family alters in the course of time, as does the plot of land with every succession, Chayanov concluded that the rural world has a particular evolutionary differential rate which he termed “demographic differentiation” in contrast with the class differentiation emphasized by Kautsky and Lenin.

Chayanov’s theory has not generally been well received.

In my view, the real problem lies elsewhere. It is to understand the nature of this peasant mode of production and its position among the various types of social formations. The following observations address that end.

First, this mode as presented by Chayanov belongs to the family of small commodity modes of production: the producer who owns his means of production (land and implements) trades his products (at least a part of them) with other commodity producers placed in a similar situation. But although these modes of production occur frequently throughout history it is never on their own and still less in a dominant position. In Chayanov’s view (reinforced by the studies of Daniel Thorner) a peasant economy of this type would become a predominant reality when a certain number of conditions are met: statistical predominance of the rural population, the vast majority of them being small freeholders; trade between town and countryside based on the specialization of rural crafts and urban manufactured products and involving only a minor proportion of agricultural products; a state system of the ‘peasant’ type, etc. These conditions would seem to have been fulfilled only in very special cases, since the state system is not generally based on the peasants but on a ruling class which exacts a tribute rather than taxes from the peasant communities. We should therefore analyze the social formation in question in terms of tributary society.

Mercantilist Europe, from the Renaissance to the end of the eighteenth century, was eminently suited to the development of a peasant economy of this type.

This peasant economy, largely characteristic of seventeenth-century France, survived during the three centuries of transition from feudalism to capitalism, alongside the mercantilist commercial and manufacturing economy. Physiocracy, as we have seen, is broadly the political economy of this period.

This is not, however, the only form of transition to capitalism. In Eastern Europe, the peasant economy was linked with the large-estate economy in which production was mostly sold, in particular to the more urbanized Western Europe. It is certainly not nonsensical to speak of peasant economies belonging to the family of simple petty-commodity modes! We find similar examples in the history of other peoples and other parts of the world. New England was basically such < a peasant economy, as, under other circumstances, was agriculture in the Arab world and some regions of precolonial Sahelian Africa.

One of Chayanov’s most important discoveries concerning this mode of production relates to the price of land. The commercialization of its produce leads to land itself becoming a commodity subject to commercial dealings, whereas this did not occur in the direct tributary modes or in the feudal mode, characterized by the inalienable right of the peasant to the soil. Chayanov noted that in those modes the price of land was not equivalent to the capitalization of rent (which did not exist) but to the work required to satisfy the needs of the family.

His second observation was that the peasant mode of production, once inte­grated into a capitalist formation, is stripped of its content and dominated by the capitalist mode of production.

This observation is very important because it means that this peasant mode cannot be studied outside the context of the overall formation within which it falls. To speak of capitalist competition amounts to assuming that the small peasant must bring his prices into line with those of the most efficient agrarian capitalist competitors, whether nationals or foreigners in the form of the import of com­petitive products (American wheat in competition with English wheat is a classic example). What then did a reduction in peasants’ earnings mean? That: (1) ground rent (rent imputed to ownership) was abolished; and (2) the rewards to labor— which amounted to the product prices—came into line with the value of prole­tarian labor power.

Thus dominant capital wiped out rent, i.e., abolished landownership. It prole- tarianized the peasant worker. The latter certainly remained the formal owner of the land but was no longer its effective owner. On the surface, the peasant remained a commodity producer who offered products on the market, but in actual fact, was a seller of labor power, this sale being masked under the cover of commodity production. Thus the peasant was actually reduced to the status of a person working at home under the domestic system.

Chayanov elucidated these points without always establishing all the links between the various elements of his theory. Comparing the results of regionally organized agricultural production without private landownership (organization based on the state’s possibility of detailing agricultural producers to work on individual plots of land) with the results of a system with recognized landown­ership (Von Thiinen’s assumption), Chayanov deduced that the first case gave rise to a greater intensification and a faster growth of production, hence capable of satisfying greater urban demand.

He laid bare the mechanisms which stripped the peasants of their effective ownership of the land, leaving them only with nominal ownership. From an internal analysis of the various elements entering into production costs, he noted that the optimum farm was not necessarily the largest farm: under the conditions existing in Russia, the optimum was about 5,000 acres for extensive cereal cultivation and 1,235 acres for intensive cultivation of the same crop. Capital domination is therefore not explained by the unlimited concentration of land­ownership. It occurred, Chayanov pointed out, through vertical concentration, i.e., by placing food industries over a group of medium-range peasant farms. By controlling the sale of the produce, these industries could effectively manipulate the level of remuneration of the peasant. Postwar French agricultural economists have been greatly influenced by these views.^[18]

Chayanov’s analysis of the mechanisms by which the capitalist mode domi­nated the peasant economy introduces new elements which were disregarded in the narrow feconomistic analysis of social democracy. Chayanov in fact noted that ground rent was high when the land was of poor quality and the rural population of high density. This is easily explained in the logic of his system where the peas­ant—who was not a capitalist entrepreneur—accepted in that case even lower rewards for his labor. Hassan Riad has analyzed the dialectics of ‘‘class differ­entiation” and ‘‘population differentiation” in Egypt along the same lines as Chayanov: evolution conditioned by the combined forces of population pressure together with increasing commercialization of agriculture in Egypt led to a con­tinual increase in the rates of ground rent between 1880 and 1952.^[19]

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