Collected Works of V. I. Lenin - Vol. 13 - From Marx to Mao

AGRARIAN PROGRAMME OF SOCIAL-DEMOCRACY297land in general. It is that part of surplus value which remainsafter average profit on capital is deducted. Hence,rent presupposes wage-labour in agriculture, the transformationof the cultivator into a capitalist farmer, into anentrepreneur. Nationalisation (in its pure form) assumesthat the state receives rent from the agricultural entrepreneurwho pays wages to wage-workers and receives averageprofit on his capital—average for all enterprises, agriculturaland non-agricultural, in the given country or group ofcountries.Thus, the theoretical concept of nationalisation is inseparablybound up with the theory of rent, i.e., capitalistrent, as the special form of income of a special class (thelandowning class) in capitalist society.Marx’s theory distinguishes two forms of rent: differentialrent and absolute rent. The first springs from the limitednature of land, its occupation by capitalist economies,quite irrespective of whether private ownership ofland exists, or what the form of landownership is. Betweenthe individual farms there are inevitable differences arisingout of differences in soil fertility, location in regard to markets,and the productivity of additional investments ofcapital in the land. Briefly, those differences may besummed up (without, however, forgetting that they springfrom different causes) as the differences between betterand worse soils. To proceed. The price of production of theagricultural product is determined by the conditions ofproduction not on the average soil, but on the worst soil,because the produce from the best soil alone is insufficientto meet the demand. The difference between the individualprice of production and the highest price of production isdifferential rent. (We remind the reader that by price ofproduction Marx means the capital expended on the productionof the product, plus average profit on capital.)Differential rent inevitably arises in capitalist agricultureeven if the private ownership of land is completelyabolished. Under the private ownership of land, this rentis appropriated by the landowner, for competitionbetween capitals compels the tenant farmer to be satisfiedwith the average profit on capital. When the private ownershipof land is abolished, that rent will go to the state.