(Karl Kautsky)
Karl Kautsky was an outstanding leader of Social Democratic Party in Germany during 1880-1910, whose Die Agrarfrage (The Agrarian Question) published in 1899, was hailed by Lenin as a significant work on the question of small peasants. Kautsky’s assessment of the survival of peasant production alongside capitalist production, instead of the presumed decimation under growth of capitalist relations of production in agriculture, presented a programmatic challenge before the Social Democrats to evolve a worker-peasant alliance. He saw continuation of peasantry which is totally subsumed under capitalist mode of production. Kautsky fell out of favour after he opposed October Revolution and was largely forgotten for a very long time until his work was rediscovered in 1980s. His work is now being considered extremely useful to understand agrarian question worldwide. We present a summary of central argument of his book which is useful for the Indian debate on agrarian question.
Marx’s method of understanding agrarian question is not how the big farmers would swallow the small nor to ask whether small landholders have a future. Rather, it has to consider all the changes through which agriculture has passed over the course of capitalist mode of production, how capital is seizing hold of agriculture, revolutionizing it, making old forms of production and property untenable and creating the necessity of new ones.
Peasant and Decline of Feudal Period
[A] medieval peasant household was a self-sufficient entity not only in producing the output but also in the means of reproduction. What happened in the markets impinged only on the farmer’s comforts and luxuries, but not his existence. This self-sufficient and cooperative household, previously indestructible, now became subject to market upheavals. With the development of towns and commercialization, this peasant’s life changed. Growth of unknown destinations for the agricultural commodities brought new opportunities that lured the peasant. Yet, direct sale to final consumer became ever more difficult with increasing ‘commodity’ character of agricultural production. Merchants who mediated gained far more leverage to manipulate and took advantage. Dealers in grain and cattle were soon joined by the usurer.Market uncertainty added to the weather uncertainty that made mayhem of markets. Increasing availability of consumption and production loans, not available till now, turned into instruments of integration of peasants into new system. The commodities of urban industry that reached the village also sowed the seeds of dissolution of the traditional peasant family. With growing dependence on markets, and cash needs, but with no availability of surplus land, peasant households had to reduce its size by pushing out members to work outside its farm. The Peasant farm is then cut to the minimum, managed mostly by the family labour. Once farming yields to the logic of surplus, the only saleable commodity that remains is labour power. The peasants now work for large farms. Small farms jostle with large farms,and struggle to survive rather than lose the small parcel of the land. Development of capitalist production in towns would speed up the transformation of the peasant life in the village.
Modern Agriculture
The contribution of modern science and industrialization since mid-nineteenth century in changing agriculture has been remarkable. The introduction of deep ploughing after the arrival of steam ploughs and electrical ploughs, knowledge of microorganisms (with the invention of microscope), discovery and use of fertilizers, increased knowledge of soil nature, have all tremendously increased the productivity in agriculture. Intensive cultivation has almost replaced extensive cultivation thereby overcoming the land constraint in increasing production. The development of soil, chemical, botanical, veterinary and agricultural sciences in Europe have unleashed productivity in agriculture, which in turn demanded investment in infrastructure, machinery and adoption of new practices in farm management. The growth of engineering and metallurgical sciences and invention of steam engine transformed transport that reduced not only human drudgery but also the labour cost besides saving time. A sector that was devoid of any progress for centuries suddenly became a revolutionary branch of modern industry. Agricultural sciences were introduced as vocational course. Agriculture was completely transformed, not merely in the sense of being more productive, it turned into an enterprise of conserving costs and increasing profits.
Capitalist Character of Agriculture
This modern agriculture cannot exist without money, capital and the generalized character of commodity production. Law of value, which decides the relative value and price through competition, gets established gradually. This does not of course suggest that prices would necessarily reflect the value of the commodity or labour embodied. While it is the use value that should determine the value on any good, it is the exchange value that determines the value in practice. The exchange value is determined by both relative demand for the commodity as well as the extent of labour involved, i.e., the cost of production, the necessary condition of determining the value of any good. However, the price which is the market device to reflect the value need not conform to the latter. Price can deviate from the value, even falling below the cost of production, if the supply overshoots the demand. This dichotomous tendency of price and value under capitalist economy is the fundamental route/ basis of translating surplus value into money value.
Markets existed for centuries in history. Those markets were based on simple commodity production, which involved direct interaction of producers and consumers facing each other. Such markets existed in conjunction with feudalism, guilds, etc. The capitalist commodity production which superseded the simple commodity production is at its culmination point. Workers, who were erstwhile producers, are now alienated from means of production, and become available for surplus value to be expropriated. The involvement of this intermediary who/that now links the value and the price led to the obscuring of the law of value. The now universally operative price, distorts the value by modifying its operation.
Just as Marx explained, the price determined by the market does not necessarily conform to the value of the commodity, a distortion that indeed helps the capitalist to convert the surplus value into profit. Price of an agricultural commodity, in fact should be comprised of three components, wage, rent and profit. It is usually to be set by the least productive farm, owing to higher cost of production. However, under competitive conditions and excess supply, the market determined price tends to erode the profit and even to non-recovery of cost of production. Agricultural markets pose this risk too often due to the specifically unpredictable nature of agricultural production which depends on weather, pests etc. Even though such a risk is equally faced by large and the small peasantry, the ability of the latter to receive the shock is limited. The position of tenant farmers is even more vulnerable. The capitalist owner-cultivator is cushioned by higher surplus that includes absolute rent (which is retained) in addition to surplus extracted from labour. Still the price crashes in agricultural output market may erode these advantages.
Agricultural capitalist enjoys profit from sources other than surplus labour, which is the ground rent, except when he is a tenant. Ground rent involves two components, absolute rent and differential rent. Absolute rent is determined by the least productive land and differential rent determined by relative levels of productivity of the rest of the lands. As the demand for food rises, the ground rent is likely to rise. Unlike the machinery which needs replacement, land is not a kind of capital which has a replacement cost. Hence, rent simply accrues to the landlord due to the property right alone rather than for any contribution. Capitalist farmer, who also owns the land enjoys a profit which involves the surplus value plus the ground rent built into the price.
Technical Superiority of Large Farms over Small Farms
Feudal lords previously cultivated their own lands using human and animal labour with their servile peasant labour, making few improvements to the land. The arrival of capitalist agriculture changes this very structure. The same peasants now become proletarians; the farms now produce for market with a view to earn profit, and farm owners adopt modern means to optimize costs and increase productivity.
Large size farms have several advantages over the small farms in this regard. First, large farms have greater share of cultivated area than small farms, for having lesser land lost in fencing, boundaries and bunding. Second, they can afford deployment of modern agricultural machinery like steam ploughs, reapers, seed drills, threshers, horse-drawn ploughs and transport carriages compared to small farms. Use of machinery not only increases the quality of operation but saves time which is a critical factor in farming. Third, with increased educational training in agricultural sciences, large farms would employ technically qualified farm managers, who have the necessary knowledge to change cropping pattern according to changing demand conditions, use appropriate farm management practices, optimize costs and increase productivity. Fourth, modern management of large farms allows better planning, operational efficiency, scale economy, book-keeping, and meticulous cost monitoring. Compared to these advantages, a small peasant holding may be economically more efficient at a micro scale. But the size of the large farm reduces the average cost of overheads, and increases the profits proportionately, making them superior to the small farms. Finally, access to banking system and larger savings make large farms undertake high risk investments.
Overwork and Under Consumption of Small Farmers
Small farmers have two weapons set against the large farms. First, they provide industrious care in farming i.e.,. they spare no effort in exploiting themselves to the utmost. Second, as the fragility of small independent peasant is ever greater than even that of agricultural labour, the small peasants not only flog themselves into this drudgery, but their family members too. Everyone has to share the yoke as there is no distinction between the farm and the household –which includes men, women, sons, daughters and even old people. They subject their own children to utmost harsh labour. Except culturally imposed holidays, every day is a working day for them. The demand for eight-hour appears quite modest in comparison.
Overwork begins once labour for the producer’s immediate consumption turns into labour for the market, impelled by the goad of competition. Competing through lengthening working day goes hand in hand with technical backwardness. As an enterprise that cannot fight off competition through technical innovation is forced to resort to imposition of even greater demands on its workers. The possibility of prolonging work time will in turn work as an obstacle to technical progress. Child labour becomes the norm, which undermines their education and capacity to enter skilled labour.
The miserliness of the peasant begins when their farms fall under the sway of competition, denying them even smallest of pleasures and comforts of life. The small peasant passes the most miserable existence that can ever be imagined. Sometimes, wage labourers are healthier than the small peasant, because he neglects consuming even the minimal diet. The low equilibrium of anemic peasant is supported by a malnourished child labour and undernourished old members of the family on demand.
The existence of drudgery also brings its own rewards: the peasant can manage under the most miserable conditions. One has to confess that as far as the subhuman diet of the small peasant is concerned, it is no more an advantage of the small farm than its superhuman industriousness. Both testify to economic backwardness and represent obstacle to economic progress.
The greater care taken by the small peasantry in their work is ruinous for them due to their drudgery and excess frugality. While it’s true that workers working for themselves exercise more care towards work than working for others, this is not necessary for a large farm which is equipped with means, capital, technology and organizational capacity. The other weapons of the small farmers’ arsenal –over-work, undernourishment and accompanying ignorance offset the effects of the greater care.
The Cooperative System
The cooperative system is of an undeniable importance to the survival of small farmers. But, the question is whether the small farmers see its advantages and agree to it. Even if they agree, how far can the cooperatives survive? Most functional cooperatives are credit cooperatives that operate in allied activities such as dairy and sugar. Mere credit cooperatives have limited benefits. Production cooperatives need lot more coordination among farmers even as they can substantially increase the bargaining power over the price. And cooperative would benefit farmers only when they are directly involved in running it. The experience is such that large farms are much more keen in forming cooperatives than small farmers, though they benefit all. Peasants rarely come together and form cooperatives by themselves, more proximate reason being lack of trust among themselves and inability to shift to an outside agency over the household.
However, lack of organizational discipline and lack of democracy in organizing cooperatives would not favour small farms. Large farmers can engage in cooperative activity much more easily than small peasants for a variety of reasons such as, they are relatively few in number who can coordinate well among themselves, and will have necessary leisure and social capital. The current evidence in Germany and France suggests either gradual or abrupt closure of the cooperatives. There are are very few cooperatives that withstood the test of time. It is not that peasants have not benefited from them. Small peasants, besides lacking skills, also suffer from attitudinal problems like pettiness, lack of mutual trust & cooperative spirit and too much attachment to their property. Hence, peasants do not naturally come together to try the cooperative alternative between the compelled transition of small farmers to large farms.
Limits of Capitalist Enterprise
In spite of conclusive evidence of inherent superiority of large farms, we also have to explain the existence and sometimes proliferation of small farms beyond Germany, including those in England, and France. Even bourgeois economists right from Adam Smith and Sismondi have expressed their approval of small farms over hitherto existing latifundiums where tenants farmers precariously existed under duress. In England small farms did not decline, in Germany mid-size farms increased, in France small farms proliferated, during 1840-1890. Number of large farms increased only in the USA, which had a different history. This contradictory statistics indeed suggests there is no necessary link between size of the farm and capitalist relations in agriculture. They certainly call for need for further research. We must understand that even in industry, there is no linear decline or demise of small enterprise. There are always pockets in which small enterprise survived taking advantage of their abilities to survive (p.144).
Further, unlike in industry, large scale farming is not always superior in agriculture, which is contingent on nature of crop, relative requirement and availability of mechanization. There are crops that require close and compact monitoring which are better managed by small farmers (p-148). Similarly, shortage of labour power and high wages can make capitalist farms impossible at times. Before the mechanization solves the labour shortage issue, small farms need advantage of unpaid family labour to compete in the market.
Large farms can also have vested interest in keeping small farms alive, which assures them labour supply in the country-side by preventing complete migration of labour. It also keeps the wages in check, small farmers who get part of substance from their farms tend to accept lower wages. It is not uncommon to see large farms to coexist with small farms in several regions.