A monopoly price exists basically because demand exceeds what can be supplied. A buyer is prepared to offer a higher price that has no relation to the price of production, and unlike temporary fluctuations in market price, it is not possible to reduce the market price by increasing supply.
“A vineyard producing wine of very extraordinary quality which can be produced only in relatively small quantities yields a monopoly price. The wine-grower would realise a considerable surplus-profit from this monopoly price, whose excess over the value of the product would be wholly determined by the means and fondness of the discriminating wine-drinker. This surplus-profit, which accrues from a monopoly price, is converted into rent and in this form falls into the lap of the landlord, thanks to his title to this piece of the globe endowed with singular properties.” (p 775)
In this case, the rent arises because of the monopoly price. But, as was argued previously, a landowner will not allow a capitalist to make profits from using their land, without paying a rent. If making an average profit is impossible due to the need to pay this rent, then capitalists will not seek to bring such land into use. So, supply will be lower than it would otherwise have been.
This applies whether the land is to be used for agriculture or some other purpose. Only as above, where the landowner uses their own land, for productive purposes, does this not apply.
This was one reason that, in the 19th century, many representatives of capital argued for land to be nationalised. Only when prices rise to such a level that the land can be brought into use and pay the rent, whilst also retaining the average profit, will the supply be increased. But, had the land been brought into use sooner, supply would have risen and prices would have fallen. Here, it is the rent which causes an artificial restriction of supply.
“That it is only the title of a number of persons to the possession of the globe enabling them to appropriate to themselves as tribute a portion of the surplus-labour of society and furthermore to a constantly increasing extent with the development of production, is concealed by the fact that the capitalised rent, i.e., precisely this capitalised tribute, appears as the price of land, which may therefore be sold like any other article of commerce. The buyer, therefore, does not feel that his title to the rent is obtained gratis, and without the labour, risk, and spirit of enterprise of the capitalist, but rather that he has paid for it with an equivalent. To the buyer, as previously indicated, the rent appears merely as interest on the capital with which he has purchased the land and consequently his title to the rent.” (p 775-6)
In other words, possession has been turned into title of ownership. Its clear that no one can claim exclusive ownership to any particular piece of the Earth's surface. The most anyone can claim is that they staked such a claim on it prior to anyone else, but staking a first claim is no logical or ethical basis for ownership. It is, as Rousseau describes in “The Social Contract”, only a state of possession. But, possession and ownership are two different things.
Slave “owners” possessed slaves, but did this mean they had an ethical right to own them? No. And, if the original slave trader had no ethical or legal right to own another human being, they cannot create such a right simply by selling the slave to someone else. No matter how many times slaves are sold as commodities it does not create a right to ownership where none could have existed to begin with. In the same way, if I buy a stolen car, I have no legal ownership. That resides with its actual owner.
The same applies to land. No one can own land, because there could have been no original ethical or legal right to possession. The fact that such possession was exercised, sometimes by force, for long periods, and passed down through inheritance could equally give no legal right to ownership. So, when land is sold, it is no different to selling a stolen car or a slave.
What, in fact, gave the title of ownership of a slave, was the production relations of the time, which led to such slave owning societies. The legal right, irrespective of the moral right, flowed from the productive and social relations. Similarly, what creates the title of ownership of land – where in the past people were considered to belong to the land, and not vice versa – was the development of feudal society. In societies where the Asiatic Mode of Production dominated, for example, the land was in the possession of the state, and village communes.
Where that feudal land ownership conflicts with the needs of capital, as capitalist productive relations dominate, it leads to similar demands for land nationalisation, until the landlords and capitalists become more closely merged.
“What created it in the first place were the production relations. As soon as these have reached a point where they must shed their skin, the material source of the title, justified economically and historically and arising from the process which creates social life, falls by the wayside, along with all transactions based upon it. From the standpoint of a higher economic form of society, private ownership of the globe by single individuals will appear quite as absurd as private ownership of one man by another. Even a whole society, a nation, or even all simultaneously existing societies taken together, are not the owners of the globe. They are only its possessors, its usufructuaries, and, like boni patres familias, they must hand it down to succeeding generations in an improved condition.” (p 776)
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