IV- The law of maximum profit and the principal contradiction in the imperialist epoch

Return to The New Democratic Revolution is the main force of the World Proletarian Revolution

IV- The law of maximum profit and the principal contradiction in the imperialist epoch

In the previous section we criticized the erroneous political and social conceptions of the leadership of UOC (MLM) regarding imperialism. We seek to demonstrate the complete opposition between the theses of a supposed “progressive tendency of imperialism that sweeps away pre-capitalist modes of production in oppressed countries” and the ideology of the international proletariat, particularly with the contributions and developments of Leninism and Maoism. After all, as the great Lenin established: “Imperialism is (…) everywhere reaction and the extreme intensification (…) of national oppression.”¹

We saw how false the consequences of this position of UOC (MLM) are, as it considers that the export of capital from imperialism to oppressed countries was responsible for sweeping away feudality. That, therefore, the agrarian problem was resolved in these countries in this way and that the fundamental social contradiction in the countryside is not between peasants and landlords, but rather between the rural proletariat and the agrarian bourgeoisie. This leads the leadership of the UOC (MLM) to advocate a semi-anarchist agrarian program that defends the need to convince poor peasants to collectivize their property and production. This question is ABC for the Marxist-Leninist-Maoists of oppressed countries.

In this section we will criticize the economic foundations of this erroneous conception of the leadership of the UOC (MLM). We wage this fight not with the sole objective and necessity to “demonstrate serious errors” in the UOC (MLM) formulations, but mainly because these are issues of utmost importance for the ICM. In this sense, the two-line struggle against the erroneous positions of the UOC (MLM) serves, mainly, to raise the communists’ understanding of the particularities of imperialism and to develop the ideology of the international proletariat with a view to providing solutions to new problems posed by the course of the World Proletarian Revolution. Among these, we highlight theoretical problems such as understanding the issue of ground rent in semi-colonial countries in the imperialist stage and the current role of the peasantry in the World Proletarian Revolution. A theoretical question related to immediate, political-military, practical problems of how communists should face Yankee imperialism’s policy of emptying the countryside, aiming to hinder the development of protracted people’s war. These are issues in which burning ideological problems reside in, which go far beyond the current controversy, but which the current two-line struggle demands them to be highlighted and dwell on.

1- Maximum profit as a particularity of monopoly capitalism

From the point of view of political economy, the leadership of the UOC (MLM) maintains, as seen previously, that capitalism in the imperialist stage, in addition to being monopolistic, would have become “an internationalized mode of production” ²; that imperialism “has chained all countries – with their specific modes of production – into a single world economy” ³. We have previously demonstrated that this mentioned chain already took place in the stage of free competition of capital, with the development of the unity of opposites “large-scale industry and capitalist world market”. Conceiving imperialism as a “internationalized mode of production” ⁴, in the sense of understanding that in this stage of world capitalism, “imperialism has broken national borders and has faced class against class in the world arena” ⁵, constitutes a major deviation from Marxism-Leninism-Maoism. Understanding, as the UOC (MLM) does, that the contradiction proletariat versus bourgeoisie, in the imperialist stage, becomes “a single contradiction that the entire proletariat of the world faces against the bourgeoisie of the world” ⁶ may sound to some like a “leftist” phrase but which is nothing more than an old Trotskyist apologetic formulation of imperialism and pure rightism.

Lenin highlights that imperialism results from the concentration of production with which: “Competition becomes transformed into monopoly. The result is immense progress in the socialization of production”, but, “appropriation remains private” ⁷. This progress in the socialization of production, therefore, does not occur as advocated by Mr. Avakian through “The integration of colonies into a new global framework that allows imperialist capital to expand and restructure itself at international level with greater profits and transform the production relations of oppressed countries to adapt them to its demands.” ⁸ Chairman Mao takes a position for the conclusion of the Communist International that “Imperialism, with all its financial and military might, is the force in China that supports, inspires, fosters and preserves the feudal survivals, together with their entire bureaucratic-militarist superstructure.” ⁹ Saying that imperialism is a “internationalized mode of production, which by integrating colonies into a new global framework transforms production relations”, or that it “sweeps away pre-capitalist modes of production”, is nothing more than an apology for imperialism, of mystification of a supposed “progressive tendency” of it.

One of the particular features of imperialism is that it advances the socialization of production through the elevation of national oppression and not by overcoming it, through the conservation of feudal survivals, and not by transforming or sweeping them away, as defended by the revisionist Avakian and the leadership of the UOC (MLM). For Lenin, the progress of socialization of production under imperialism implies that “(…) monopolist capital has intensified all the contradictions of capitalism (…). It is sufficient to mention the high cost of living and the tyranny of the cartels. This intensification of contradictions constitutes the most powerful driving force of the transitional period of history, which began from the time of the final victory of world finance capital.” ¹⁰ As imperialism is the reaction everywhere, it intensifies contradictions and does not resolve them; It allows, however, for the proletariat to lead the resolution of all these contradictions (even those pending from the bourgeois revolution) and, therefore, marks the beginning of the New Epoch, the epoch of the World Proletarian Revolution.

Let us now see how the leadership of the UOC (MLM) seeks to economically justify its conception of imperialism and the particular type of capitalist development in oppressed countries. In their most recent criticism of our Party and the ICL, they state that:

“Imperialism has made the growth of the reserve army even more drastic and has taken advantage of the ‘cheapness and abundance of available or vacant wage-workers ’ as well as of the relative backwardness of the other productive forces in the oppressed countries, cheapness which, as we have already said, means super-exploitation of the proletariat in the oppressed countries, and relative backwardness which in turn is reproduced in that it is compensated in super-profits for the imperialists and the native ruling classes .” ¹¹

They state that imperialism takes advantage of the growth of the reserve army to super-exploit the proletariat in the “oppressed countries”, thus ensuring super-profits for the imperialists “and the native ruling classes”. They say that the semi-colonial bourgeoisies earn super-profits just like imperialism, in the same way that they claim that these bourgeoisies achieve the same rate of profit as finance capital. As Lenin demonstrates in his studies on imperialism, super-profit becomes a particularity of finance capital, in the phase of monopoly capitalism.

Imperialist profit as monopolist profit, as we will see in detail, is necessarily exclusivist, because of it, monopoly corporations and imperialist states fight against each other for the loot of oppressed countries by making them colonies and semi-colonies, precisely to guarantee the best condition in competition and, thus, be able to ensure captive markets for their corporations’ goods and, at the same time, sources of raw materials and energy, in addition to the super-exploitation of workers which is provided by the conditions of backwardness that imperialism impose on these countries and the hindrance of their independent development. Monopoly implies the exclusivity of certain more favorable conditions for the production and circulation of goods. Free competition, its opposite, corresponds theoretically, at least, to equal conditions of competition. This economic reasoning used by the UOC (MLM) has already been previously formulated by old revisionists, but before discussing the authorship of this artifice, let us first see how it is in total opposition to Leninism, which thus analyzes the particularity of the imperialist monopoly, in relation to the England’s monopoly on manufacturing industry in the 19th century:

“On the threshold of the twentieth century we see the formation of a new type [compared to British monopoly in the 19th century] of monopoly: firstly, monopolist associations of capitalists in all capitalistically developed countries; secondly, the monopolist position of a few very rich countries, in which the accumulation of capital has reached gigantic proportions. An enormous “surplus of capital” has arisen in the advanced countries.” ¹²

Lenin makes it clear that accumulation of capital in enormous proportions occurs in a few very rich countries, never in all countries. Because the reason for the formation of this “surplus of capital” lies precisely in the monopolistic conditions of which oppressed countries are deprived. The condition of privileged monopolist is the economic basis of the inter-imperialist contradiction, the powers dispute among themselves for the privileges that allow monopoly profits, as explained above. To assume that an oppressed country can accumulate capital with the same rate of profit as the imperialist bourgeoisie is to completely oppose the economic foundations of the Leninist theory of imperialism. Lenin treats the inter-imperialist dispute over monopoly status as follows:

“Any country which has more colonies, capital and armies than ‘we’ have, deprives ‘us’ of certain privileges, certain profits or super-profits. Just as among individual capitalists’ super-profits go to the one whose machinery is superior to the average (…) so among nations the one that is economically better off than the others gets super-profits.” ¹³

In other words, super-profits, the rate of accumulation obtained by imperialists, can only be achieved by depriving the competing power of certain privileges. Let alone in relation to colonial and semi-colonial countries, therefore, it is complete nonsense to assert that the ruling classes of these countries can earn super-profits just like imperialism. Monopoly is essentially exclusivist; this is one of its particularities. However, the monopoly of what production conditions ensures these super-profits? Lenin gives us this answer:

“The imperialism of the beginning of the twentieth century completed the division of the world among a handful of states, each of which today exploits (in the sense of drawing super-profits from) a part of the ‘whole world’ (…) each of them occupies a monopolist position in the world market thanks to trusts, cartels, finance capital and creditor and debtor relations; each of them enjoys to some degree a colonial monopoly (…)” ¹⁴

The issue is extremely clear: a handful of states exploit a part of the world to obtain super-profits; they earn these super-profits precisely because they occupy a monopolistic position in the world market, thanks to the high concentration of productive capital in trusts; they earn monopoly profits because they are colonial monopolists. How could the colonial or semi-colonial bourgeoisie achieve the same rate of profit as the financial oligarchy, to the point of becoming an exporter of capital? The economic formulations of the leadership of the UOC (MLM) reach this point, indicating that the bourgeoisie of the semi-colonial and colonial countries are becoming exporters of capital: the bourgeoisie of the ‘oppressed capitalist countries’ has achieved “a great accumulation of capital by making it excessive there as well”, one cannot “evade its real monopoly character and imperialist aspirations.” ¹⁵

To consider this possibility is to make apology for imperialism, it is to say that “imperialist integration” allows all bourgeoisies to grow in the same proportion. As Marx analyzes in Capital, when dealing with the concentration and centralization of capital, this harmonious growth was not possible even in the stage of free competition, because as he demonstrates, the largest capitals always tend to expropriate the smallest, thus centralizing, increasingly, the capital in the hands of a smaller number of bourgeoisie. The imperialist stage results precisely from this extremely high concentration of capital. This therefore makes it impossible for a bourgeoisie with less capital to accumulate enough to become a competitor to the imperialist bourgeoisie in the market of capital export. Judging that the bourgeoisies of different countries freely associate and share the entire social surplus value among themselves is the silliest fantasy of liberalism and the most perverse illusion spread by revisionism.

In the imperialist stage, the super-profit of finance capital is the maximum profit, exclusive to monopolies and imperialist states. We will begin the study of maximum profit departing from the economic foundations established by Marx and Engels regarding the relationship between production, circulation and distribution of the wealth of a society. Capitalist profit and its derivation, imperialist maximum profit, belong to the sphere of distribution analyzed as by Marx. Understanding these foundations of Marxist political economy is essential for us to understand why the transformation of free competition capitalism into monopoly capitalism implies a transformation of the law of profit in the capitalist mode of production, that is, the transformation of the law of average profit into the law of maximum profit.

1.1 – The particularity of the capitalist mode of production according to Marx

Contrary to what the leadership of the UOC (MLM) claims, imperialism does not result in a qualitative change in the capitalist mode of production. In general, the mode of production continues with the same fundamental characteristics analyzed by Marx. This does not mean that qualitative changes have not occurred in the sphere of production, on the contrary, it is precisely in this sphere that the qualitative changes analyzed by Lenin begin, as well as in the sphere of circulation:

“Half a century ago, when Marx was writing Capital, free competition appeared to the overwhelming majority of economists to be a ‘natural law’. (…) by a theoretical and historical analysis of capitalism [Marx] had proved that free competition gives rise to the concentration of production, which, in turn, at a certain stage of development leads to monopoly. Today, monopoly has become a fact.” ¹⁶

Monopolist production and monopoly in the sphere of circulation, key economic characteristics of the imperialist epoch, do not change the essence of the capitalist mode of production. So much so that the fundamental contradiction of the capitalist process continues to be between social production and private appropriation, and its social expression continues to be the contradiction between the proletariat and the bourgeoisie. The essence of the productive process continues to be the one highlighted by Marx, in The Poverty of Philosophy: “I have (…) shown, for the first time, that Division of Labor as practiced in manufactures, is a specific form of the capitalist mode of production.” ¹⁷ That is, the segmentation of the productive process, of one same act of work, into a succession of combined partial acts, this is the specific form that the division of labor acquires in the capitalist mode of production. The division of labor predates the capitalist mode of production, but it is only at this historical stage that it acquires the aforementioned specificity. The division of labor in manufacturing, therefore: “is a special creation of the capitalist mode of production.” ¹⁸

It is this specific form of the capitalist mode of production, prior to machine tools, that creates the new social productive power:

“In such cases the effect of the combined labor could either not be produced at all by isolated individual labor, or it could only be produced by a great expenditure of time, or on a very dwarfed scale. Not only have we here an increase in the productive power of the individual, by means of co-operation, but the creation of a new power, namely, the collective power of masses.” ¹⁹

The fact that the productive process is divided on a planetary scale, that the socialization of production has massively increased, does not correspond to the qualitative change in the productive sphere in the imperialist epoch. After all, as Marx analyzes, the international division of labor and its consequences had already occurred in the stage of free competition, as Marx analyzes:

“By constantly making a part of the hands “supernumerary,” modern industry, in all countries where it has taken root, gives a spur to emigration and to the colonization of foreign lands, which are thereby converted into settlements for growing the raw material of the mother country; just as Australia, for example, was converted into a colony for growing wool. A new and international division of labor, a division suited to the requirements of the chief centers of modern industry springs up, and converts one part of the globe into a chiefly agricultural field of production, for supplying the other part which remains a chiefly industrial field.” ²⁰

What, therefore, are the changes in the economic basis of imperialism resulting from the huge concentration of capital? To answer this question, let us take Engels’ analysis of the development of the contradiction between the mode of production and the mode of circulation in capitalism.

As we saw in the first section of this text, it is in the work of Engels, Anti-Dühring, that the fundamental contradiction of capitalist society being between the social character of production and private capitalist appropriation appears formulated in a more complete and developed way. Later, in Socialism: Utopian and Scientific, Engels would complement this analysis by laying the foundations from which Lenin would formulate his theory of imperialism. In this work, Engels analyzes how the rebellion of the mode of production against the mode of circulation is at the basis of the crises of overproduction and, ultimately, leads to the formation of trusts and monopolies:

“In these crises, the contradiction between social production and capitalist appropriation ends in a violent explosion. The circulation of commodities is for the moment reduced to nothing; money, the means of circulation, becomes an obstacle to circulation; all the laws of commodity production and commodity circulation are turned upside down. The economic collision has reached its culminating point: the mode of production rebels against the mode of exchange.” ²¹

This rebellion of the mode of production against the mode of circulation is the demand of the social productive forces for full recognition of their social and not private condition:

“Thus, on the one hand the capitalist mode of production stands convicted of its own incapacity to continue the administration of these productive forces. On the other hand, these productive forces themselves press forward with increasing power towards the abolition of the contradiction, to their deliverance from their character as capital, towards the actual recognition of their character as social productive forces.” ²²

Thus, from this economic conflict between the mode of production and the mode of circulation, important changes arise in the economic basis of capitalist society:

“It is this counterpressure of the productive forces (…) against their character as capital, this increasingly compulsive drive for the recognition of their social nature, which forces the capitalist class itself to treat them more and more as social productive forces, as far as this is at all possible within the framework of capitalist relations. The period of industrial boom with its unlimited credit inflation no less than the crash itself operating through the collapse of large capitalist establishments drives towards that form of the socialization of larger masses of means of production which we find in the, various kinds of joint-stock companies.” (Engels)

However, more than this formal recognition, the rebellion of social productive forces determines a change in the content of the mode of circulation in capitalist society:

“At a certain stage of development this form, too, no longer suffices; the large-scale producers in one and the same branch of industry in a country unite in a “trust”, an association for the purpose of regulating production. They determine the total amount to be produced, parcel it out among themselves and thus enforce the selling price fixed beforehand. (…) In the trusts, free competition changes into monopoly and the planless production of capitalist society capitulates before the planned production of the invading socialist society.” ²³

The contradiction between social production and private ownership invariably results in cyclical crises of overproduction in the capitalist economy; These crises, in turn, imply the rebellion of the mode of social production against the mode of circulation, free competition. The result of this contradiction is masterfully pointed out by Engels: “free competition changes into monopoly”, the anarchy of capitalist social production capitulates in the face of the planned production of the nascent socialist mode of production. The rebellion of the social productive forces against the mode of appropriation and the capitalist mode of circulation is already the transition to another regime, as defined by Lenin, fully developing the ideas of the great Engels:

“(…) certain of its [of capitalism] fundamental characteristics began to change into their opposites, (…) Economically, the main thing in this process is the displacement of capitalist free competition by capitalist monopoly. Free competition is the basic feature of capitalism, and of commodity production generally; monopoly is the exact opposite of free competition, but we have seen the latter being transformed into monopoly before our eyes, (…) At the same time the monopolies, which have grown out of free competition, do not eliminate the latter, but exist above it and alongside it, and thereby give rise to a number of very acute, intense antagonisms, frictions and conflicts. Monopoly is the transition from capitalism to a higher system (…) the deepest economic foundation of imperialism is monopoly.” ²⁴

The concentration of production, in the productive sphere, determines the qualitative modification of the capitalist mode of circulation. The monopoly imposes itself and dominates, but free competition continues to exist alongside and below the monopoly; the stage in the capitalist process changes. As Chairman Mao highlights: in a given process of development or at a given stage, the principal aspect is one, but “at another stage or in another process the roles are reversed.” ²⁵ Imperialism is not characterized, therefore, as a new mode of production, because if it were so it would change the process; What occurs, however, is a profound change in the productive sphere and in the mode of circulation. That is, a higher stage of development of capitalism. Let’s see what other changes in the economic base of society these changes determine. To do this, let us follow Engels’ analysis of the relationship between the mode of production, mode of circulation and mode of distribution of capitalism.

1.2 The mode of production and the mode of circulation determine the mode of distribution in a society

Marx and Engels elaborate a complete critical theory of the capitalist economy, covering all its spheres: production, circulation, distribution and consumption; defining the sphere of production as the principal one that therefore determines the others, and ultimately, the totality of these spheres as the material basis of society determines its superstructure. In the Introduction to For the Critique of Political Economy, Marx analyzes the dialectical relationship between these economic factors, however, this text was never published by the founders of communism. It will be in Anti-Dühring, with an analysis of the relationship between these spheres of the economy, that they will present the determination of the mode of distribution by the dialectical relationship between the mode of production and the mode of circulation in a more complete way:

“(…) it was seen that all past history (…) was the history of class struggles; that these social classes warring with each other are always the products of the relations of production and exchange — in a word, of the economic relations of their epoch; that therefore the economic structure of society always forms the real basis, from which, in the last analysis, the whole superstructure of legal and political institutions as well as of the religious, philosophical, and other ideas of a given historical period is to be explained.” ²⁶

He specifies the economic structure of society as relations of production and relations of exchange. And he defines political economy as:

“The science of the laws governing the production and exchange of the material means of subsistence in human society. Production and exchange are two different functions. Production may occur without exchange, but exchange – by the fact that it is only an exchange of products– cannot occur without production.” ²⁷

Rigorously supporting Marx’s postulates, he shows the dialectical relationship between production and circulation, and, at the same time, the ultimate determination of production in relation to circulation. He exemplifies their mutual conditioning as follows:

“Each of these two social functions [production and circulation] is subject to the influence of what are for a large part special external factors, and consequently each has what are also for a large part its own special laws. But on the other hand, they constantly determine and influence each other to such an extent that they might be termed the abscissa and the ordinate of the economic curve.” ²⁸

Finally, Engels establishes the relationship between both: production and circulation with the mode of distribution of a given society, that is, how it is distributed among the members of the social body, among the social classes of a given social formation, the productive results of the whole:

“The nature and mode of distribution of the products of a specific historical society are simultaneously given with the nature and mode of production and [mode of] exchange in that society and with its historical preconditions.” ²⁹

And also:

“(…) distribution is always the necessary result of the relations of production and exchange in a particular society, as well as of the historical preconditions of this society; so much so that when we know these relations and preconditions, we can definitely infer the prevailing mode of distribution in this society.” ³⁰

We saw previously that the specific form of the capitalist division of labor is the division of the same productive activity within the same production unit; that this division results in the creation of a new productive power, the collective power, which together with the social means of production (machines) shape social production. The mode of circulation specific to capitalist production is free competition. And the mode of distribution or appropriation of the social product is capitalist private property, as Marx defines:

“The capitalist mode of appropriation, the result of the capitalist mode of production, produces capitalist private property.” ³¹

The capitalist mode of distribution, or the elements that characterize the bourgeois mode of distribution, have two aspects. The first one deals with the distribution of the new value produced in the productive process between capital and labor. The second deals with the distribution of surplus value appropriated by the capitalist in this same productive process, or the distribution of surplus value between the productive branches, its distribution in the forms of entrepreneur ‘s profit, interest and ground rent.

The first law of this mode of distribution is that, as a rule, the worker sells his labor power to the capitalist for its exchange value; When purchasing it, the capitalist acquires the right to consume the use value of labor power throughout the productive day. However, the particularity of this commodity (labor power) is that the consumption of its use-value results in the production of more value. This new value produced by the laborer in a working day is divided into two parts: the first constitutes the value necessary for the reproduction of his labor power, the second constitutes a value in excess. The necessary value [value of labor power] corresponds to the wage, the excess value is the surplus value appropriated by the capitalist.

The second law of the capitalist mode of distribution is that which deals with the distribution of surplus value. According to Marx, surplus value is distributed among capitalists according to the magnitude of their capital, regardless of whether they are employed in productive branches with greater or lesser organic composition of capital. Thus, a capitalist does not appropriate the surplus value directly extracted by him from his workers. The free circulation of capital, free competition between them, determines that the totality of social surplus value is distributed among capitalists according to an average rate of profit. This is the average profit that is earned by capitalists in proportion to the magnitude of their capital.

According to the analyzes of Engels and Lenin, at the end of the last decade of the 19th Century and the beginning of the 20th Century, substantial transformations occurred in the productive sphere and in the capitalist mode of circulation. In the first, there is a very high concentration of production, the establishment of trusts and monopolies in certain branches of the economy, which determine the transformation of free competition into monopoly. According to Engels’ dialectical formula, given a mode of production and a mode of circulation it is possible to deduce a corresponding mode of distribution. Social production of goods and free competition thus determine the laws of capitalist distribution. The aforementioned transformations in the productive sphere and in the capitalist circulation mode determine, in turn, modifications in the distribution mode in the monopolistic stage of capital, imperialism. What are these changes and what do the great leaders of the international proletariat tell us about this issue?

1.3 Two particularities of the mode of distribution in imperialism: permanent super-exploitation and maximum profit

Lenin establishes very clearly the two changes in the mode of distribution in the imperialist stage. He demonstrates how the concentration of capital, cartels, monopolies, in the sphere of production and the fusion of this industrial capital with banking capital, originating financial capital, allows it to earn super-profits, which are precisely profits above the average profit, thus subverting the law that regulates the distribution of surplus value in capitalism at the stage of free competition:

“Monopoly yields super-profits, i.e., a surplus of profits over and above the capitalist profits that are normal and customary all over the world.” ³²

These monopolist profits are what he later classifies as “super-profits gained by finance Capital.” ³³

Super-profits, in themselves, do not constitute a phenomenon exclusive to imperialism, they are a common phenomenon in the stage of free competition in capitalism. Whenever a given capitalist exploits more favorable production conditions than his competitors, he can earn a super-profit or an excess surplus value. The determination of the price of a commodity is its value, which corresponds to the socially necessary labor time to produce it; Whenever a capitalist manages to produce it in working time below the socially necessary average, he can earn a super-profit. However, as soon as these production conditions become universal, such as a new machine or a new method of exploiting the proletariat (a more intense pace of production, for example), the production time of all competitors tends to be balanced and that relative difference is eliminated. Eliminated until a new method of obtaining excess surplus value emerges. The search for excess surplus value is the main variable of competition between capitalists in the same productive branch.

The particularity of super-profit in the imperialist era is that it crystallizes as an exclusive form of financial capital, as there are exclusive production conditions that only the capital of the great imperialist powers, that is, financial capital, can obtain. These conditions of production are achieved by imperialism through the export of capital to oppressed countries, because in these, as Lenin highlights: “capital is scarce, the price of land is relatively low, wages are low, raw materials are cheap.” ³⁴ In other words, financial capital can only earn super-profits by establishing monopolistic control over these production conditions in colonies and semi-colonies.

As Lenin and Engels highlight, the transformation of free competition into monopoly does not eliminate competition between capitals. On the contrary, it intensifies, rises, transforms the commercial wars of the national states of the 17th and 18th centuries into the wars of the imperialist powers at the turn of the 19th century to the 20th century and beyond. The financial capital of one power competes with the financial capital of another in the search for these super-profits, in the dispute for those production conditions that allow this benefit to be achieved. This is the economic basis for the partition and repartition of the world, the dispute for monopolistic control of colonies and semi-colonies with the plundering of their natural wealth and the possibility of permanently super-exploiting their proletariat and other workers. The role of the local big bourgeoisie of oppressed countries, which has become a big bourgeoisie tied to international financial capital, will always be “subaltern” and lackey to it; it is not integrated, it is totally dependent and subjugated and it willingly accepts this subjugation.

Comrade Stalin, developing Leninism, drawing important economic conclusions after the end of World War II, makes a decisive contribution to the analysis of imperialism:

“It is said that the average profit might nevertheless be regarded as quite sufficient for capitalist development under modern conditions. That is not true. The average profit is the lowest point of profitableness, below which capitalist production becomes impossible. But it would be absurd to think that, in seizing colonies, subjugating peoples and engineering wars, the magnates of modern monopoly capitalism are striving to secure only the average profit. No, it is not the average profit, nor yet super-profit — which, as a rule, represents only a slight addition to the average profit – but precisely the maximum profit that is the motor of monopoly capitalism.” ³⁵

This is the first particularity of the mode of distribution in the imperialist stage: the goal of the imperialist bourgeoisie, of monopoly capitalism, is not the average profit, nor an ephemeral super-profit, but rather the maximum profit. If the economic law of capital in the stage of free competition is the search for profit, that of monopoly capital is the search for maximum profit, that profit above which there can be no other. It is also clear that this maximum profit is monopolized by financial capital, as it is only possible to obtain it if colonies are seized, people are subjugated and wars are engineered. We will deal with other consequences of this concept established by Comrade Stalin, but first we will analyze another particularity of the mode of distribution in the imperialist stage: the permanent super-exploitation of the proletariat of oppressed nations.

As seen previously, the super-exploitation of labor is also not exclusive to the monopolistic stage of capital, the imperialist one. We saw how this brutal form of exploitation emerged in England, was analyzed by Marx and constituted a way of accelerating capitalist accumulation. However, the continued super-exploitation of labor has at least two economic-social consequences. Continuously paying the labor force below its value invariably leads to the languishing of the class, and a reduction in life expectancy, etc. The capitalist can only adopt this form of exploitation if there is the renewal of a constant excess of overpopulation, as this way, this mass outside the labor market replaces the one that is languishing due to continuous super-exploitation. Population is a decisive economic factor for super-exploitation.

On the other hand, continued super-exploitation leads to social explosions of the working class, which would rather die fighting than starve to death under the lash of the capitalists. This was the case in England, in the 19th century, with the outbreak of the Chartist movement and the trade unions, and this was the case in continental Europe, mainly from 1848 onward. Still in the stage of free competition, England’s monopolistic condition in the production of manufactured goods, until the middle of the 19th century, allowed it to earn super-profits that began to be used to bribe a certain layer of the working class in its country, aiming to reduce social tensions in its own territory. This phenomenon was characterized by Marx and Engels as the emergence of a “labor aristocracy”.

Developing Marxism, Lenin will demonstrate that in the imperialist stage the super-profits earned by financial capital make it possible for the generalization of this “worker aristocracy” in all the states of that handful of countries that oppress the remaining immense majority of the world’s nations. He thus establishes a direct link between the emergence of imperialism and the temporary predominance of opportunist rule on the labor movement in oppressive countries. At the same time, he highlights the impossibility of prolonging this bribery to this layer of the proletariat for a long time. Imperialism is the inevitable tendency towards crises, the dispute between powers over the repartition of the world and competition between monopoly corporations in their respective countries, and this situation also causes instability in the labor aristocracy.

This way, also in the mode of distribution of the new value created, in the dispute between capital and labor, there is a change in the laws that were in force in the free competition stage. While in this stage super-exploitation was transitory, in the imperialist stage it also crystallizes and becomes more or less permanent for the proletariat of the oppressed countries. Imperialism thus imposes a much worse living condition for the proletariat of semi-colonies than for the proletariat of imperialist countries. They thus aim to obtain super-profits from exported capital and “social peace” in their own territory. They thus seek to make part of the proletariat of their own country complicit in the oppression and national subjugation of oppressed countries.

But as already seen, super-exploitation is not exclusive to oppressed countries. This happens in two senses: firstly, this super-exploited proletariat is a source of surplus value, mainly for the profit of financial capital and, only to a lesser extent, for big capital in oppressed countries; second, the proletariat of oppressed countries is also super-exploited within the territories of the imperialist powers. Today the existence of the immigrant proletariat is decisive for maintaining industrial production, commerce and the service sector in imperialist countries. There would be no Yankee economy without the presence of the Mexican, Colombian, in the end Latin American and Caribbean proletariat in its territory; there would be no German industry without the Turkish and Kurdish proletariat; there would be no trade and service sector in Europe without the proletariat of India, Bangladesh, Vietnam, Senegal, Nigeria, Ecuador, Brazil, etc.

This mass of immigrant workers is a direct source of surplus value and is super-exploited, as the imperialist bourgeoisie takes advantage of their precarious legal condition to impose degrading conditions of exploitation on them, extracting from them a much higher rate of surplus value than from the national proletariat. But at the same time, this immigrant mass serves as pressure on the country’s proletariat, putting downward pressure on wages and allowing the ruling classes to foment all kinds of reactionary, chauvinist and fascist ideology that aims to blame these immigrants for the increase in unemployment and lower wages.

On the one hand, maximum profit crystallizes as a way of distributing the surplus value of financial capital; on the other, the super-exploitation of the proletariat is characterized as a permanent form on the masses of semi-colonial countries, whether they live in their countries of origin or work in imperialist territories.

1.4 Maximum profit is the economic law of monopoly capital

Imperialist maximum profit is a particular form of capitalist super-profit. As seen, in the super profit characteristic of the free competition stage, capitalists who have the best production conditions earn this form of profit. When these conditions are not subject to monopolization, such as the expansive force of heated water used in the steam engine, taking up Marx’s example, they are universalizable, they can be used by all competing capitalists; As soon as the most advantageous production condition disappears, super-profit ceases to exist. In the imperialist stage, super-profit acquires particular characteristics that transform it into maximum profit. This is because transformations in the productive sphere determine that the gigantic concentration of capital implies that certain productive branches can only be exploited in a capitalist manner exclusively by capital of extremely high magnitude. The exploitation of these branches, therefore, becomes a monopoly of these extremely concentrated capitals. Lenin, in his study of imperialism, points out how this phenomenon firstly appears in heavy industry; and Engels had already shown this particularity necessary for capitalism in the construction of railways, for example.

The monopolistic exploitation of capital expanded throughout all branches of the economy, determining a qualitative change in the mode of circulation; free competition turned into monopoly. The super-profit that was ephemeral among free-competing capitalists in the same branch of production, initially crystallizes, in certain productive branches, in those that can only be exploited by gigantic amounts of concentrated capital. In these branches, the super-profit of financial capital is transformed into the maximum profit characteristic of imperialism. Lenin gives us two examples of the creation of monopolies in the industrial production of sugar and cement:

“The Sugar Trust set up monopoly prices, which secured it such profits that it could pay (…) dividend (…) about 70 per cent on the capital actually invested at the time the trust was formed!” ³⁶

And:

“Where it is possible to capture all or the chief sources of raw materials, the rise of cartels and formation of monopolies is particularly easy. It would be wrong, however, to assume that monopolies do not arise in other industries in which it is impossible to corner the sources of raw materials. The cement industry, for instance, can find its raw materials everywhere. Yet in Germany this industry too is strongly cartelized. (…) The prices fixed are monopoly prices: 230 to 280 marks a car-load, when the cost price is 180 marks!” ³⁷

The sugar cartel allowed a 70% profit rate after the cartel was formed; The cartelized cement industry, in turn, enables much higher monopoly prices than would normally be the case over production costs. This stabilization of super profit, initially in certain productive branches and soon after, in all branches, indicates its transformation into maximum profit. As Engels makes clear, the relationship between the mode of production and circulation and the mode of distribution is not passive, as one determines the development of the other: “Distribution, however, is not a merely passive result of production and exchange; it reacts just as much on both.” ³⁸, therefore, it is necessary to see in detail the implications of this change in the whole economic base in the imperialist stage.

What is the result of the cement cartel’s monopoly price? Where can the sugar cartel extract this super profit from? Marx demonstrates in detail in Book I, of Capital, that profit cannot be explained from the sphere of circulation. That is, the fact that a producer sells his commodities for a price above its value cannot socially explain the profit. As he demonstrates, in capitalist production, the only source of profit is surplus value, it is unpaid labor, extracted from the worker through the relation of waged production. This does not change in the imperialist stage. The question, however, is that the surplus value appropriated by a capitalist is not the surplus value immediately produced by the workers he exploits. As seen above, a capitalist’s profit is mediated by the distribution of the entire social surplus value produced; This surplus value is distributed between the different branches of production, between the different forms of capital (industrial, banking and commercial), between the different forms of profit (entrepreneur’s profit, interest and ground rent), according to the general rate of profit in a given society.

From the point of view of the relationship between value and price, according to Marx’s formulations, the distribution of surplus value in the stage of free competition occurs as follows. Different capitalists, who produce the same commodity, that is, who are direct competitors, manufacture under different conditions of production. The working time necessary for the production of the commodity varies, therefore, depending on these conditions, the capitalist who has the best condition produces in the shortest time necessary, the one who has the worst condition consumes a longer time. The value of the commodity, however, is not defined by the singular conditions of production, but by the socially necessary labor time. The social value of industrial commodities is determined by the average conditions of production of competing capitalists. In the next topic, we will see that the laws that determine the social value of agricultural and extractive commodities are different in relation to industrial commodities, in agriculture it is not the average condition that determines the social value, but the condition of the worst terrain, but this is a point that requires a separate analysis. Let us continue with the analysis of the production price of industrial goods.

Social value is the productive basis that determines the price of the product on the market. The laws that govern the distribution of social surplus value apply on social value; it is the law of average profit that operates in the case of the free competition stage. So, the production price of a commodity is equal to the social value, or production costs, plus the average profit. The producer with lower production costs, as already noted, will earn an excess profit, which does not constitute the particular form of profit of the monopolistic stage of capital, imperialism.

What happens in imperialism, as indicated in Lenin’s examples, is that, initially, in some productive branches, financial capital imposes a monopoly price, that is, a price above the price of production, thus ensuring a profit higher than the average profit. This surplus profit cannot simply arise from exchange; it therefore implies a change in the distribution of surplus value. In other words, the branches of production that manage to impose a monopoly price over society appropriate a greater portion of the social surplus value than capitalists in other branches. Thus, the monopoly profit of a branch implies a profit below the average profit in the other branches. Lenin emphasizes this change in the distribution of surplus value between the different productive branches in the imperialist stage when he says that:

“(…) the “heavy industries” exact tribute from all other branches of industry.” ³⁹

Before analyzing the sources that ensure the payment of this tribute to the monopolized branches, it is necessary to highlight that the existence of a super profit that crystallizes as maximum profit, as a result of the monopoly of financial capital in production, this condition determines the existence of different rates of profit in the imperialist stage of capitalism. It is not possible to have a maximum profit for all capitals because the monopolist profit of a productive branch will always come at the expense of a decrease in the profit rate of non-monopolized branches. However, with the progressive takeover of the productive branches by financial capital, one by one, they fall under its control and become monopolized branches. When this happens, do imperialist super-profits, or maximum profit, cease to exist? No, “maximum profit that is the motor of monopoly capitalism” and that is why in imperialism competition, far from disappearing, is transformed into the unbridled rivalry of imperialist powers and between corporations in their respective countries in the search for this monopolist profit. Maximum profit, due to its monopolistic nature, is exclusive and can only arise from the violent defeat of the competitor, “employing dynamite” ⁴⁰ against it and the increasing subjugation of colonial and semi-colonial possessions. As the great Lenin highlights:

“Imperialism is monopoly capitalism. Every cartel, trust, syndicate, every giant bank is a monopoly. Super-profits have not disappeared; they still remain. The exploitation of all other countries by one privileged, financially wealthy country remains and has become more intense. A handful of wealthy countries—there are only four of them, if we mean independent, really gigantic, ‘modern’ wealth: England, France, the United States and Germany—have developed monopoly to vast proportions, they obtain super-profits running into hundreds, if not thousands, of millions, they ‘ride on the backs’ of hundreds and hundreds of millions of people in other countries and fight among themselves for the division of the particularly rich, particularly fat and particularly easy spoils. This, in fact, is the economic and political essence of imperialism, the profound contradictions of which Kautsky glosses over instead of exposing.” ⁴¹

Maximum profit, therefore, is only possible for a handful of countries that live by exploiting billions of men and women from all other countries. This is the engine of monopoly capitalism, as maximum profit, as a result of the development of the law of surplus value, became the law that regulates distribution in the imperialist stage. As Stalin states:

“Is the law of value the basic economic law of capitalism? No. The law of value is primarily a law of commodity production. (…) the law of value, of course, plays a big part in the development of capitalist production. But not only does it not determine the essence of capitalist production and the principles of capitalist profit; it does not even pose these problems. Therefore, it cannot be the basic economic law of modern capitalism.” ⁴²

And:

“Most appropriate to the concept of a basic economic law of capitalism is the law of surplus value, the law of the origin and growth of capitalist profit. It really does determine the basic features of capitalist production. But the law of surplus value is too general a law that does not cover the problem of the highest rate of profit (…) the law of surplus value must make more concrete and developed further in adaptation to the conditions of monopoly capitalism.” ⁴³

Maximum profit is the law that determines the monopoly price and the distribution of surplus value in imperialism. Let us now analyze some of the sources that feed this imperialist profit.

1.5 Maximum profit as social tribute paid to financial capital

The expansion of monopoly to all productive branches of the world economy does not make super-profits disappear. While cartels and trusts were exclusive to the branches of heavy industry, this one received a tribute from other productive branches. When monopoly becomes generalized, this tribute begins to be paid by society as a whole:

“Finance capital, concentrated in a few hands and exercising a virtual monopoly, exacts enormous and ever-increasing profits from the floating of companies, issue of stock, state loans, etc., strengthens the domination of the financial oligarchy and levies tribute upon the whole of society for the benefit of monopolists.” ⁴⁴

The increased profit of financial capital in relation to what would be the average profit in the free competition stage is composed of this tribute imposed by the financial oligarchy on the entire society for its benefit. The main source of this tribute is found in the colonies and semi-colonies and, as already seen, this constitutes one of the economic foundations of the struggle for the repartition of the world between the imperialist powers. Everyone wants to ensure for themselves the best conditions for producing this maximum profit. For this reason, Lenin highlights that:

“The struggle among the world imperialisms is becoming more acute. The tribute levied by finance capital on the most profitable colonial and overseas enterprises is increasing.” ⁴⁵

All the militarization of imperialism, all the tendency towards violence, is based and justified by the unbridled race for maximum profit. Therefore, the conclusion of the leadership of the UOC (mlm) that the semi-colonial bourgeoisies would earn a rate of profit equal to the rate of profit of the imperialist bourgeoisies is completely nonsense. After all, as Comrade Stalin explains:

“It is precisely the necessity of securing the maximum profits that drives monopoly capitalism to such risky undertakings as the enslavement and systematic plunder of colonies and other backward countries, the conversion of a number of independent countries into dependent countries, the organization of new wars — which to the magnates of modern capitalism is the ‘business’ best adapted to the extraction of the maximum profit — and, lastly, attempts to win world economic supremacy.” ⁴⁶

It is the search for maximum profit that explains the worsening of national oppression in the imperialist stage, the conversion of independent countries into dependent countries. And we have already seen in Lenin’s explanation what are the economic reasons that allow capital exported from imperialist countries to earn super-profits in semi-colonial countries, after all in these: “capital is scarce, the price of land is relatively low, wages are low, raw materials are cheap.” ⁴⁷ To understand the relationship between the low price of land and cheap raw materials, we first need to deal with the Marxist theory of ground rent, so we will analyze this aspect in the next session. We will deal here with the other two elements: scarce capital and low wages.

When discussing the transformations in the mode of distribution in the imperialist stage, we have already addressed the issue of the super-exploitation of the proletariat of oppressed nations, whether they are working in their nations or as immigrants in imperialist countries. It is only necessary to highlight that the permanent super-exploitation of the proletariat of oppressed nations is the main source of maximum profit for financial capital. In other words, the majority of this tribute paid by the entire society to the financial oligarchy is paid by the proletariat of oppressed countries. As Lenin highlights when analyzing the phenomenon of labor aristocracy in imperialist countries:

“Economically, the difference is that sections of the working class in the oppressor nations receive crumbs from the super-profits the bourgeoisie of these nations obtains by extra exploitation of the workers of the oppressed nations. Besides, economic statistics show that here a larger percentage of the workers become “straw bosses” than is the case in the oppressed nations, a larger percentage rise to the labor aristocracy. That is a fact. To a certain degree the workers of the oppressor nations are partners of their own bourgeoisie in plundering the workers (and the mass of the population) of the oppressed nations.” ⁴⁸

This passage from Lenin is very important because it highlights precisely the character of the permanent super exploitation of the workers of the oppressed nations; because he highlights that this super-exploitation is the source of super-profits, of which he shares the crumbs with the labor aristocracy; because he highlights the exploitation not only of workers but of the masses of the population of oppressed nations; and because he links this super-exploitation of the proletariat and national oppression of imperialism to opportunism, complicit of finance capital.

The other element highlighted by Lenin for obtaining super-profits in oppressed countries is the scarcity of capital. In other words, when financial capital was exported, it found capital of little magnitude in colonial and semi-colonial countries, in a very initial process of accumulation. This limited accumulation of local capital made competition with financial capital impossible. After all, the production conditions resulting from the unprecedented concentration of capital in advanced countries became the exclusive monopoly of financial capital. Financial capital placed two situations before the big capital that were accumulated in colonial and semi-colonial countries: following the path of national development in unequal competition with them with all the consequences of a confrontation or tying themselves to them as lackeys to continue accumulating in the condition of complicit in the national subjugation and super-exploitation of its nascent proletariat. In the 20th century, already under imperialism, the epoch of the world bourgeois democratic revolution ended and the epoch of the world proletarian revolution had begun, as a rule, the big bourgeoisie of the oppressed countries was compelled to take the second path, in rare exceptions it opted for the first and invariably faced imperialist military retaliation.

This society of subjugation to finance capital with the accumulated capital of the big bourgeoisie and the latifundium of the colonies and semi-colonies is one of the most important economic traits that are proper of the economic-social formations in the oppressed countries in the imperialist stage. This condition was called bureaucratic capitalism by Chairman Mao, that is, a capitalism that did not follow a revolutionary, democratic path of development, but developed linked to financial capital, allied to imperialism and local latifundium. This big bourgeoisie, bureaucratic and comprador, is a subordinate but indispensable part of financial capital. Imposing the super-exploitation of the proletariat of oppressed nations is under their direct responsibility. The political conditions necessary to ensure this exploitation, in these oppressed countries, are generally and almost invariably fascism. These are political regimes of absolute centralization of State Power in the Executive Power, in which reactionary armed forces exercise permanent tutelage over civilian shift governments or direct control via military regimes, during ascending revolutionary situations.

These are traits more or less common to semi-colonial countries around the whole world. From the point of view of the profit earned by this bureaucratic and comprador bourgeoisie, it is clear that it cannot be the same as that of financial capital; however, it cannot be too low either, after all, the semi-colonial big bourgeoisie fulfills functions essential to imperialism and is rewarded for it. It is, therefore, a big monopolistic bourgeoisie, it is not monopolist in the world market, but in the national market and in some cases, to a very limited extent, in a regional market. Through the old state apparatus, it controls all foreign trade, monopolizing the import and export of commodities in association with financial capital. It controls the country’s industry, through state or non-state capital, based on the maintenance of latifundium and monopolistic relations of property, monopoly and concentration of land, all linked to international financial capital. For all this, they receive fractional values much lower than the imperialist profit of the financial oligarchy, profits that allow them to reproduce themselves as a monopolistic, bureaucratic and comprador bourgeoisie, dominant in control of the state apparatus.

This big bureaucratic and comprador bourgeoisie of oppressed countries, therefore, does not earn maximum profit, but together with financial capital it restricts the profit of the national bourgeoisie (middle bourgeoisie). And in doing so it earns a monopoly profit in relation to this non-monopolist middle bourgeoisie. The production of this middle bourgeoisie always takes place on a reduced scale and, being unable to compete with local and foreign monopolies, in general, it serves as an auxiliary to the enterprises of the big bourgeoisie and in the supply of secondary commodities and services to the State. Its rate of profit is incomparably lower than that of financial capital and far below that of the big bureaucratic and comprador bourgeoisie. From a political point of view, it lacks the privileges obtained by the bureaucratic and comprador bourgeoisie, whether in terms of tax exemption, access to state credits and import quotas or policies that facilitate exports. It is a bourgeoisie that also super-exploits the proletariat of its country, but that does not have the economic strength to earn even the average profit, in addition to competing in a completely monopolized national market.

An important part of the surplus value it extracts from its workers is drained by the bureaucratic and comprador bourgeoisie and by financial capital. It is a bourgeoisie restricted by financial capital and bureaucratic capitalism; it does not even achieve average profits; the portion of surplus value that would be allocated to it by the laws of free competition are drained by the monopoly to make up the imperialist maximum profit. The national bourgeoisie (middle bourgeoisie) earns a minimum profit and therefore has contradictions with bureaucratic capitalism and imperialism. However, as its profit comes from the super-exploitation of the proletariat – which it fears – It is economically dependent on imperialism, bureaucratic capitalism and latifundium, which is why it is an economically weak and politically vacillating class; but which, due to its contradictions with imperialism, with the local big bourgeoisie and with latifundium, tends to support the national democratic struggle, whose revolutionary united front program must ensure its interests, and can thus be neutralized and, under certain conditions, and for certain time, to have active participation of its sectors, especially when the revolutionary war forces the imperialist invasion of national territory.

The super-exploitation of the proletariat of oppressed nations and the restriction of the profit of the national bourgeoisie are two sources of the maximum profit of finance capital. The first is the main source; the second most important, as we will see below, is constituted by Lenin’s assessment of low land prices and cheap raw materials. As we have seen, it was the changes in the sphere of production and in the mode of circulation in the transition from the free competition to the monopolistic stage that determined the change in the mode of distribution in the capitalist economy. The distribution of the new value created in the productive act now has, fundamentally, two different rates of surplus value: that of workers in oppressed nations and that of the labor aristocracy in oppressing countries. The distribution of surplus value, in turn, occurs at different rates of profit: the maximum profit of financial capital, that is, imperialist, the monopoly profit of the big bureaucratic and comprador bourgeoisie of oppressed countries and the minimum profit of the national bourgeoisie (middle bourgeoisie) of the colonies and semi-colonies.

Finally, it is important to highlight that the existence of different rates of profit, depending on the magnitude of capital, was already a thought of Marx and Engels that appears even in the study of capitalism in the free competition stage. This is what we can see in the following note by Engels:

“In Marx’s copy there is here the marginal note: ‘Here note for working out later; if the extension is only quantitative, then for a greater and a smaller capital in the same branch of business the profits are as the magnitudes of the capitals advanced. If the quantitative extension induces qualitative change, then the rate of profit on the larger capital rises simultaneously’.” ⁴⁹

Likewise, the study of the conditions for maximum profit are already an old object of study in political economy. In the Economic and Philosophic Manuscripts of 1844, for example, Marx quotes the following passage from Adam Smith:

“The highest rate to which ordinary profits can rise is that which in the price of the greater part of commodities eats up the whole of the rent of the land, and reduces the wages of labor contained in the commodity supplied to the lowest rate, the bare subsistence of the laborer during his work. The worker must always be fed in some way or other while he is required to work; rent can disappear entirely. For example: the servants of the East India Company in Bengal.” (Adam Smith apud Marx) ⁵⁰

In other words, according to Smith, the maximum rate of profit can be obtained when the salary is reduced to the minimum, and when ground rent is entirely suppressed. He presents us as an example of these conditions in Bengal, when it was still a colony of England. In this topic we studied the relationship between imperialist maximum profit and the super-exploitation of the proletariat of oppressed nations. In the next chapter we will study the mechanisms for suppressing ground rent in semi-colonies as a fundamental part of the formation of the maximum profit of financial capital.

2 – Ground rent in semi-colonial countries in the epoch of imperialism

To analyze the process of ground rent in semi-colonial countries during the imperialist epoch, it is necessary to assimilate the Marxist theory of capitalist ground rent. Without mastering this theory well, it becomes impossible to understand the phenomenon today, in those countries that are the vast majority in the world, as well as the development of this process in the stage of monopoly capitalism. As Marx makes clear, the formulation of his theory of capitalist ground rent departs from the specific case of England, since it was under English conditions that modern landownership “has been adequately developed.” ⁵¹ As the classical form of bourgeois landownership developed in England, this allowed Marx to formulate the most universal theory on this complex and crucial question of political economy. Departing, therefore, from the formulations of Smith and Ricardo, but especially from the latter, Marx conceives his theory of capitalist ground rent.

Mastering this theory is key to applying it correctly to particular conditions other than those in England. Particular distinctions of time (we are in the monopoly stage of capitalism) and place, in this case Latin America, whose genesis of economic-social formations is very different from that of England. Among these particularities, the following stand out: more recent colonization, the vastness of the territory and the little capitalist industrial development. Marx himself, in his formulations, provides the proletariat of semi-colonial countries with germinal analyzes of the ground rent of the agro-exporting latifundium in America, as well as the particularities of peasant ground rent when linked to a capitalist market.

These are very important starting points for understanding current phenomena; however, they demand theoretical development on the part of the international proletariat. After all, Marx’s theory of ground rent was formulated at a stage of the capitalist process in which big monopolies did not yet predominate in production, in which free competition ruled the circulation of capital and average profit was the law of distribution of surplus value. These conditions, as established by Lenin and Stalin, changed from the 20th century onwards, what are their impacts on the functioning of ground rent in the imperialist stage? This is a question that must be answered, theoretically and practically, by the ICM, as it involves understanding the particular relations of exploitation of the imperialist stage, as well as part of the economic foundation of national oppression and the super-exploitation of the proletariat and the peasantry of oppressed countries. nowadays. Our Party, in the midst of the present two-line struggle in the ICM, hopes to contribute to its resolution.

In its magazine criticizing the ICL and, in particular, our Party, the UOC (MLM) addresses the issue by pejoratively characterizing us as “supporters of the theory of semi-feudalism.” ⁵² Epithets often make the two-line struggle toxic, but we gladly accept this characterization, with quotation marks, of course, because the Marxist-Leninist-Maoist characterization and that of the UOC (MLM) can only be opposites, even though we do not have the slightest idea of what our critics from UOC (MLM) understand by “the theory of semi-feudalism”. As Marxists-Leninist-Maoists, we are advocates of the theory of feudality and semi-feudality, as are the great leaders of the international proletariat: Chairman Mao, Chairman Gonzalo, Ibrahim Kaypakkaya, Charu Mazumdar and José Maria Sison. We defend this conception because it is scientific and true, as well as being decisive in bringing about the revolution in colonial and semi-colonial countries.

After throwing this “epithet” at us, the leadership of the UOC (MLM) argues that there would be a “coincidence of the theory of semi-feudalism with the theorists of neo-liberalism regarding capitalist land rent”. ⁵³ Comparing Chairman Mao’s theory of semi-feudality with “neoliberal” positions is, to say the least, nonsense, not understanding clearly what is one thing and another. They state, for example, that:

“One of the main errors of the supporters of the theory of semi-feudalism is due to the confusion of the concept of absolute land rent. This fact, by the way, coincides with the theories of neo-liberal theorists. In such theorizing, the tenant farmer is considered on a par with the wage laborer, the only difference being that the wage of the former is not in cash but in kind. These gentlemen completely ignore the fact that the tenant farmer owns his means of production, invests capital, controls the work process and makes production decisions.” ⁵⁴

They claim that, like neoliberal theorists, we do not understand the concept of absolute rent; that for us the peasant farmer tenant would be considered as a wage laborer without distinction; and that we would ignore the fact that the peasant farmer controls the work process. The theoretical confusion of the UOC (MLM) is complete, as neoliberal theorists do not consider the peasant farmer tenant as a wage laborer, but rather as a “sharecropper” of the big landowners who receive a share in the profits. This is the liberal and neoliberal conception of sharecropper relationships previously analyzed. Regarding the other two points, Marx is extremely clear in his theory of capitalist ground rent: the peasant does not receive absolute rent, not even when he owns his plot, much less when he is a tenant; Furthermore, he does not control the work process, but rather is controlled and oppressed by it.

The leadership of the UOC (MLM), in fact, assumes a bourgeois liberal economic position by considering peasants as typical capitalist tenants:

“For them [the theorists of semi-feudality], this tenant is an unfree and indigent laborer, and not a capitalist tenant who owns the means of production. The capital must be provided by the landowner and the sharecropper only provides labor. This indigent sharecropper receives only a meagre wage and the landlord gets a rent (as Ricardo says!). But if we look closely, what these theorists call ‘wages’ is in reality the profit of the capitalist tenant” ⁵⁵

In this criticism, they only reveal their theoretical indigence, as they do not understand the formulation regarding semi-feudality, nor “neoliberalism”, much less Ricardo’s theory of ground rent. After all, for Ricardo, the tenant in no way receives a “meagre wage”, on the contrary, he always receives the average profit. The error in Ricardo’s rent theory, revealed by Marx, is that he was unable to explain the ground rent of the worst soils, that is, the absolute rent, a key theoretical issue solved only by Marxist political economy. Furthermore, in this strange position of January 2023, the UOC (MLM) contradicts their own formulation presented in their Program, published in 2015. As we saw in their analysis of the development of capitalism in agriculture in semi-colonial countries, the UOC (MLM), A few years ago, considered the sharecropper relation as a covert wage relation, feudal in appearance, but wage in practice. Let us remind the leadership of the UOC (MLM) of their old formulation:

“Sharecropping (…) was converted into a capitalist mode of exploitation of land. This wage relation of production has remained covert with the old veil of sharecropping.” ⁵⁶

Today, in their criticism of our Party, they reformulate their position to say that the sharecropper relation in agriculture in semi-colonial countries is a relationship between a capitalist tenant and a landowner. Above, we demonstrated that the sharecropper relation is not pure wage employment as the leadership of the UOC (mlm) previously defended, however, even less can it be considered a capitalist profit relation of the peasant tenant. Treating the relationship of exploitation, covert in partnership, as capitalist profit, this is the most shameful “neoliberal” conception, which seeks to transform all those exploited by capital into entrepreneurs, small business owners, etc. This is what is defended when treating peasants as capitalist tenants:

The tenant peasant produces surplus on the rented farm with family and hired labor. Part of this surplus is transferred to the landlord in the form of rent, part to the usurer/creditor in the form of interest and the rest is pocketed as profit.” ⁵⁷

For the UOC (MLM), the relation between the peasant tenant and the landowner is typically capitalist. Therefore, this capitalist peasant hires labor force, pays the ground rent to the landlord and pockets the profit that accrues to him. Thus, the rent paid by the peasant to the landowner is a capitalist ground rent, the rent received by the peasant from the sale of his production is a capitalist profit and the amount paid to the hired labor force constitutes a capitalist wage. These conclusions are in complete opposition to the foundations of Marxist political economy. One of Marx’s criticisms of Ricardo is that he, like bourgeois political economists in general, saw in capitalist relations of production “natural” relations that have always existed and will always exist. So that for Ricardo every ground rent lease constituted a capitalist ground rent. It is the UOC (MLM), therefore, that repeats Ricardo’s errors. Marx states that:

“Ricardo, after postulating bourgeois production as necessary for determining rent, applies the conception of rent, nevertheless, to the landed property of all ages and all countries. This is an error common to all the economists, who represent the bourgeois relations of production as eternal categories.” ⁵⁸

Marx demonstrates that considering peasants as capitalist tenants is a huge theoretical error; and if this was already an error in the free competition stage, in the monopoly stage of capital it is something completely unrealistic. What UOC (MLM) is arguing here is that a peasant tenant, after commercializing his commodities, receives a capitalist profit. Nor does it seem absurd or strange to them that he uses family labor (without wage payment) for production. All of this is presented by the UOC (MLM), purely and simply as capitalist relations of production. Marx had already clarified this issue clearly, when analyzing the rent paid by Irish peasants:

“Such is the case, e. g., in Ireland. The tenant there is generally a small farmer. What he pays to the landlord in the form of rent frequently absorbs not merely a part of his profit, that is, his own surplus labor (to which he is entitled as possessor of his own instruments of labor), but also a part of his normal wage, which he would otherwise receive for the same amount of labor.” ⁵⁹

In other words, when the tenant is a peasant, the rent paid to the land owner absorbs not only the profit, but also part of the wage, that is, the peasant tenant receives less than he would receive for the same labor, if he were a wage laborer. It is in this ruined peasant, with a living condition worse than that of agricultural wage laborers, that the UOC (MLM) wants to see a “capitalist tenant”. Marx shows, on the contrary, that there is no capitalist ground rent in peasant renting, that it exists only formally:

“The landlord can also lease his land to some laborer, who may be satisfied to pay to the former in the form of rent, all or the largest part of that which he realizes in the selling price over and above the wages. In all these cases, however, no real rent is paid in spite of the fact that lease money is paid. But wherever conditions correspond to those under the capitalist mode of production, rent and lease money must coincide.” ⁶⁰

As we will see later, capitalist ground rent only exists as an excess above the average profit established in an economy. For Marx, if the tenant does not earn this average profit, and as rent subtracts part of what would be his wage, or part of what would be his profit, this rent does not constitute capitalist ground rent. The UOC (MLM) completely ignores this issue and even synthesizes a new category of political economy (non-Marxist): the “capitalist peasant landowner”:

“Now, capitalist agriculture can be dominated by the capitalist rentier landlord (CRLL) or by the capitalist peasant landowner (CFLL [its English acronym]), depending on the conditions of production.” ⁶¹

How far have they gone! How can capitalist agriculture be dominated by the “capitalist peasant landowner” class? Depending on the conditions, a landowner can become, at the same time, a capitalist; and under more specific conditions a peasant can also become a capitalist. But how can a big landowner be a small landowner at the same time? Above we saw Marx’s criticism of Proudhon, due to the synthesis he made of two arbitrary concepts to construct “new” economic categories; the UOC (MLM), following in the “dialectical” footsteps of Proudhon and Prachanda, achieves the feat of combining three into one, to synthesize the concept of “capitalist peasant landowner” and even provide us with its “acronym in English”.

Even after carrying out this “dialectical” juggling act, the leadership of the UOC (MLM) continues to insist that we, the “semi-feudalism theorists”, do not understand “the concept of absolute rent”. ⁶² Let’s see, then, how some key concepts of the Marxist theory of capitalist ground rent are understood by them. For the UOC (MLM), capitalist differential rent can be defined as follows:

“The differential rent is born from the fertility of the lands and their favorable location (differential rent I) or from successive capital investment in the land itself (differential rent II).” ⁶³

As for absolute rent, it is defined as follows:

“The absolute rent is born from territorial monopoly of land – it is the tribute that society pays to the monopoly of private appropriation of the soil.” ⁶⁴

The UOC (MLM) depart from the false assumption that capitalist differential rent is “born” from the difference in fertility or the accumulation of work on the same land; in the same way they define that absolute rent is “born” from the monopoly of land appropriation. Thus, they confuse ground rent factors with their genesis. Capitalist ground rent is born from the capitalist mode of production, which appears in manufactures and later advances to the countryside. That is why Marx states that fertility and location factors are “quite independent of capital”. ⁶⁵

The difference in the economic fertility of the soil and its limitation are part of the objective basis of capitalist ground rent, but do not correspond to its particularity, as these factors also acted in different ways in other modes of production. Since the earliest times of humanity, the most fertile and best located lands (close to rivers, for example) have constituted economic factors determining production. What is important to know, in order to understand the Marxist theory of ground rent, is how these factors act under the dominance of capitalist production. In other words, what constitutes the particularity of capitalist ground rent.

In advancing its explanation, the UOC (MLM) states that:

“(…) the differential rent is a surplus profit that is not generated as the quality of soil itself, but from the use of it by capital; it is a capitalist rent that comes from the exploitation of wage labor in agriculture.” ⁶⁶

In the quote above, they correct the previous statement about the “birth” of rent, but now, they make the mistake of saying that rent comes from the exploitation of waged labor in agriculture. Waged labor in agriculture, one of the foundations of capitalist production, explains the extraction of surplus value in the countryside, but in no way explains capitalist ground rent. For this does not consist of surplus value in general, but a ramification of it that benefits the landed proprietor; it is what the landowner extracts from the capitalist and not directly from the agricultural worker, that is, it is with part of the (social) surplus value extracted from workers in the city and countryside by the bourgeoisie in general that the capitalist in agriculture pays rent to the landlord and this is the particularity that needs to be explained. For Marx, the explanation of capitalist rent cannot be confused with the explanation of surplus value in general:

“The whole difficulty in analyzing rent, therefore, consists in explaining the excess of agricultural profit over the average profit, not the surplus value, but the excess of surplus value characteristic of this sphere of production”. ⁶⁷

The leadership of the UOC (MLM), is not unaware that capitalist ground rent consists of an excess of agricultural profit over the average profit, they even state that:

“The capitalist relations of production that have developed in Colombian agriculture generated an excess of agricultural profit over the average profit. This excess is the ground rent. In appearance, the rent comes from the land itself, as if it was an amount that was inherent of the land.” ⁶⁸

Correct, capitalist ground rent consists of the surplus of agricultural profit over average profit, this is what Marx says. But the UOC (MLM) states that in Colombian agriculture it was capitalist relations of production that gave rise to this surplus; they take as a presupposition what they should demonstrate in their conclusion. They need to answer the following economic questions: does Colombian peasant production earn the average capitalist profit? Does the rent paid by Colombian peasants to landowners constitute a value in excess of this average profit? To answer these concrete questions, however, it is necessary to explain theoretically what is the mechanism that gives rise to this surplus profit in agricultural production above the average profit and why this surplus is appropriated by the land owner and not by the capitalist who exploits the land. However, the UOC (MLM) cannot do so, as they are based on two important errors: first, they consider that rent is “born” from the difference in fertility and soil limitations, as stated above; second, they consider that rent comes directly and exclusively from the wages of agricultural workers.

The complexity of the problem of capitalist ground rent is that it is the result of the capitalist mode of production, mode of circulation and mode of distribution. That is why Marx could only address it in Capital Book 3, because there he studies the relationship between these two aspects of capital: production and circulation, as well as the distribution of surplus value resulting from this contradiction. Thus, differential fertility and soil limitation constitute particular factors of agricultural production, however, they are insufficient to explain capitalist rent. Because it also formed by the general rate of profit, or average profit (distribution of surplus value); and by a particular law of the capitalist circulation of agricultural products: the market price of these commodities is regulated by the production price of the worst soil. The Marxist theory of capitalist ground rent demands an understanding of three spheres of political economy: production, circulation and distribution. In production, relations of exploitation, differential fertility and soil limitation; in circulation, the worst terrain determining the market price; in distribution, the relationship between average profit and capitalist production in agriculture.

2.1- The Marxist theory of capitalist ground rent

Marx highlights that all ground rent, that is, all payment for the use of land or all value received exclusively for owning a portion of the globe, all this rent constitutes a part of the surplus labor produced by society. In this sense, ground rent in the slave, feudal and capitalist modes of production constitute part of the surplus labor. The particular feature of capitalist ground rent is that it constitutes a part of this surplus labor above the average profit earned by the bourgeoisie. Therefore, Marx states that

“All ground rent is surplus value, the product of surplus labor. (…) corresponding to the capitalist mode of production — which is always a surplus over and above profit”. ⁶⁹

In capitalism, surplus labor is surplus value, therefore capitalist ground rent is a particular branch of social surplus value that is appropriated by landowners. And land owners appropriate this part of the surplus value, solely and exclusively because they own portions of land, inherited, conquered or purchased, but which are not the result of human labor like other means of production (tools, machines, etc.). Marx thus highlights this power of landowners to appropriate part of the social surplus value:

“The singularity of ground rent is rather that together with the conditions in which agricultural products develop as values (commodities), and together with the conditions in which their values are realized, there also grows the power of landed property to appropriate an increasing portion of these values, which were created without its assistance; and so, an increasing portion of surplus value is transformed into ground rent.” ⁷⁰

Marx further emphasizes that:

“The rent, then, forms a portion of the value, or, more specifically, surplus value, of commodities, and instead of falling into the lap of the capitalists, who have extracted it from their laborer’s, it falls to the share of the landlords, who extract it from the capitalists.” ⁷¹

Briefly, Marx demonstrates that in the capitalist mode of production all social surplus value is extracted by capitalists (in agriculture and industry) through the exploitation of workers in the city and the countryside; capitalist ground rent is a part of this social surplus value that land owners extract from capitalists; Thus, in capitalism, landownership has the power to appropriate a portion of the surplus value which was created without interference from the landowner. It is this process of extracting part of the capitalists’ surplus value by landowners, which Marx unveils in his magnificent theory of ground rent.

One of the theoretical challenges for the formulation of the Marxist theory of ground rent is to maintain coherence with the fundamental postulate of scientific political economy: the law of value. This law was initially formulated by classical political economy, mainly by Smith and Ricardo, establishing that only human work is capable of creating new values. However, how would it be possible to explain, based on this postulate, the empirical phenomenon that the market value of agricultural production, in addition to ensuring profit for the capitalist tenant and the salary for the agricultural worker, could also pay a rent to the landed proprietor? If, according to the law of value and the law of free competition, the profits of capitalists and the wages of workers tend to converge towards the same average, how can we explain this excess value of the commodities from the land without collapsing the main theoretical foundation of classical political economy? The question, therefore, was correctly formulated by the bourgeois classics: it is necessary to explain the ground rent that accrues to the land owner without using the theoretical artifice, the false explanation, that agricultural commodities would be sold for a price above their value. Although it correctly formulated the conditions of the problem, bourgeois political economy could not resolve it, as to do so it was necessary to unravel the question of surplus value; and thus, only with the theory of surplus value entirely formulated by the proletariat, could capitalist ground rent be explained in a manner consistent with the law of value. This great task, as we know, fell to the giant of thought and action, the founder of communism, Karl Marx.

In bourgeois political economy, Ricardo is the one who progresses the most in solving this theoretical problem. In his formulation of the theory of value, all additional value created in the productive process results from just two factors: capital and labor. However, this new value created is divided into: profit, salary and rent of the land proprietor. Ground rent in Ricardo’s theory already appears, correctly, as a part of the value distributed only in the sphere of distribution; that is, for him, the land owner has no role in the process of producing additional value, although he has a part of it in the distribution of the new wealth produced. How does Ricardo explain, then, the existence of this ground rent, consistently maintaining the foundation that agricultural commodities, even when sold for a price equal to their value, provide this extra rent to the land owners?

For Ricardo, the social value of goods, whether industrial or agricultural, would always be established by the worst conditions of production. That is, if, through competition, it is necessary for manufacturers A, B, C and D to produce to meet the needs of the consumer market, the value of this commodity will always be the necessary labor time consumed in the worst production condition; that is, for the longest time. With this postulate, Ricardo assumes that producers whose individual values are lower than the social value will obtain an additional profit. In industry, competition between capitals tends to suppress this additional profit; In agriculture, this process of optimizing production also occurs, but as land is the main factor of production, the difference in fertility between soils will always be a limit for production conditions to equalize with the most fertile soils. That is, land with lower fertility will always require more capital or more work to achieve the same productivity as land with higher fertility.

However, as for Ricardo, it is always the worst production condition that determines the social value of the commodity and, in the case of agriculture, the worst terrain, capitalist ground rent could be explained by the relative difference in soil fertility. Thus, in his theory of rent, the social value of the agricultural commodity is defined by the labor time consumed in the worst terrain. The capitalist who produces in this worst terrain, like everyone else, earns the same rate of profit as his competitors. However, as their competitors exploit more fertile soil, even employing an equal amount of capital and labor they will obtain a greater production of commodities, for example twice the amount of wheat compared to that obtained by the capitalist on the worst soil. All wheat, whether from the worst or the best soil, are sold for the same market price, which for Ricardo is always the price of the worst production conditions. Therefore, the capitalist with the best land earns twice as much value as his competitor with the worst soil, as he sells twice as much wheat. However, he does not pocket this surplus value, because what would be the surplus profit from better production conditions is extracted from him by the land owner, who pockets this value as ground rent for conceding this land to the capitalist tenant. Thus, Ricardo manages to explain the existence of the land owner’s rent, without contradicting the foundation of the law of value, as this appears even when commodities are sold for a price equal to their social value.

The most evident logical problem with Ricardo’s theory is that it assumes that the owner of the worst soil would not charge rent for using his land. Because, if the owner of the worst soil charges rent, his theory will be dismantled. After all, as it is the value of the commodities produced on the worst soil that regulates the market price, if the owner of this land charges a rent, the market price will be: value + rent of the worst soil, and thus the price would be higher than the value. If there were rent on the worst soil, capitalist ground rent could not be explained using the law of value.

The practical problem is that the owners of the worst soil charge rent to produce production on their properties, after all, as Marx says:

“The fact that the tenant farmer could realize the usual profit on his capital did he not have to pay any rent, is by no means a basis for the landlord to lend his land gratis”. ⁷²

Although Ricardo advances in the explanation, he was unable to resolve the issue, as circumventing, abstracting the circumstance of the rent from the worst soil, does not solve the problem, on the contrary, it makes it harder to resolve.

The merit of Ricardo’s rent theory, according to Marx, is that it lays the foundations for differential rent, but one of its main limits is that it denies the possibility of absolute rent, that is, the rent earned by the worst terrain. Ricardo could not reach the resolution of this issue due to the limits in his theory of value; When Marx resolves these limits, the question of rent of the worst terrain becomes an easy solution. Marx comments on the results of the resolution of this problem posed by classical political economy in a letter to Engels in 1862:

“All I have to prove theoretically is the possibility of absolute rent, without infringing the law of value. This is the point round which the theoretical controversy has revolved from the time of the physiocrats until the present day. Ricardo denies that possibility; I maintain it. I likewise maintain that his denial rests on a theoretically false dogma deriving from A. Smith—the supposed identity of cost prices and values of commodities.” ⁷³

With the theory of surplus value, Marx manages to resolve the theoretically false dogma contained in Smith and Ricardo’s formulation of the law of value. After all, with his formulation of the distribution of surplus value, based on the formation of a general rate of profit, Marx demonstrates how commodities, in general, are sold at market prices that are different from their intrinsic values. That is, unlike what Smith and Ricardo assumed, commodities from the same branch of production are not always sold for a price equal to their value. Marx demonstrates that value and price are identified only when all productive branches of a society are considered; Only in these circumstances does the price of the goods correspond exactly to the value of this total. However, in each productive branch, taken separately, there is no absolute identity between price and value.

This development of the law of value by Marx, taken from classical economics, resolved a series of inconsistencies of the followers of Smith and Ricardo, among them, the issue of ground rent in the worst terrain. In the first three books of Capital, Marx theoretically summarizes the historical process of transforming the value of commodities into production prices and this into market prices. He demonstrates how the value of constant capital is reproduced in the value of the commodity; and how the new value produced, the product of living human labor, is decomposed only into salary (variable capital) and surplus value. In turn, he shows how this surplus value “transfigures” into profit and, as in the capitalist’s perception, profit is value that exceeds the cost price. He details, therefore, that the cost price of a commodity is equal to the constant capital actually spent on its production (raw material + machinery outwearing) + variable capital (salary). And that profit is everything that exceeds this cost price. In this way, a capitalist can make a profit, even selling his commodities below its value, thus realizing only part of the intrinsic surplus value in it, the other part being shared with capitalists in other branches of production.

Understanding, therefore, the process of distribution of surplus value is a prerequisite for assimilating the Marxist theory of capitalist ground rent. When analyzing the process of capitalist production, in Book I, Marx abstracts the effects of circulation; in this way, he considers the profit of a commodity = the surplus value contained in it. This demonstration is key to revealing how all capital is the product of unpaid labor. However, when studying the global process of capitalist production, that is, considering the relationship between production and circulation, Marx shows us how this identity between profit and surplus value is not immediate. That is, it continues to exist, the totality of profit is = the totality of surplus value produced; however, this identity is mediated by the general rate of profit, which distributes this totality of social surplus value among capitalists, at first, according to the magnitude of the capital of each.

Marx argues that if this were not the case, another type of incompatibility between economic theory and reality would be reached. After all, if the surplus value produced were identical to the surplus value appropriated (profit), we would have to conclude that in the productive branches in which there is greater mechanization, a greater amount of constant capital in relation to variable capital, the profit would be lower. After all, in a productive branch whose proportion between constant capital and variable capital was 90c + 10v, at a surplus value rate of 100%, the value of the commodity would be 110. If this commodity were sold for a price of 110, that is, in an immediate coincidence between price and value, the profit of capitalists in this branch would be 10%. In turn, a capitalist whose organic composition of his capital was distributed in the proportion of 60c + 40v, at a surplus value rate of 100%, the value of the commodity would be 140. If the market price of this commodity were identical to its individual value, the profit earned would be 40%. This would lead to the absurd conclusion that profits are much greater in less mechanized branches than in more modern industries. This would be just one of the absurd results, incongruous with reality, of the errors contained in the law of value as formulated by Smith and Ricardo.

Marx demonstrates, as already seen above, that free competition between capital from different branches of the economy tends to shape a general rate of profit in society. Thus, it is demonstrated that profit is independent of the organic composition of capital. With the general rate of profit, the already studied average profit is formed, which accrue to all capital in proportion to its magnitude. In this way, the general rate of profit distributes the social surplus value proportionally across the different productive branches. Thus, commodities produced at a higher organic composition (in the example above 90c/10v) are sold for a production price that is higher than their intrinsic value. In turn, commodities produced at a lower organic composition (such as 60c/40v) are sold for a production price lower than their intrinsic value.

With this development of the law of value, of the relation between value and price of production, between surplus value and average profit, Marx solves the fundamentals of the problem of formulating a theory of ground rent that does not contradict this fundamental law of scientific political economy. He can thus explain both the differential rent and the rent of the worst soil, or the absolute rent. Marx shows that once the market price of an agricultural product has been established, competing producers who produce under the best conditions, that is, on the most fertile soil, will obtain an individual production price lower than the market price. This difference, this additional profit, which in industry would accrue to the capitalist, in agriculture becomes ground rent; in this case in differential rent, which in general terms had already been explained by Ricardo.

As Marx demonstrates that the market price of agricultural commodities is lower than their intrinsic value, due to the organic composition being lower than the social average, this market price may be slightly above the individual production price of the worst soil, but still below its intrinsic value. Thus, through the distribution of surplus value, Marx manages to explain the real existence of ground rent in the worst soil without contradicting the law of value. Classical political economy could not resolve this issue, as it was tied to the dogma that the price of each and every commodity immediately corresponded to its value. Marx, when developing the law of value established by Smith and Ricardo, shows that the identity between price and value of commodities is not immediate, but rather mediated by the distribution of surplus value according to the organic composition of capital in the different branches of production. This is the fundamental theoretical basis for the formulation of the Marxist theory of absolute rent.

In accounting terms, just to further exemplify the theory, taking the data above: in the industrial branch, capital is divided into 90c + 10v and in agriculture 60c + 40v. For the same rate of surplus value (m’) of 100%, the surplus value (m) produced in industry would be = 10 (m = v.m’ = 10 x 100% = 10), whereas the surplus value produced in agriculture would be = 40 (40 x 100% = 40). The value produced in the industry (c + v + m) would be = 90c + 10v + 10m = 110; the value produced in agriculture would be = 60c + 40c + 40m = 140. The total surplus value produced would be = 10m + 40m = 50m. As the surplus value is not immediately realized by productive branches, but is distributed between these branches, of the total social surplus value, in this example, 25m would be allocated to industry and 25m to agriculture. Thus, every capital of 100, regardless of its organic composition and the surplus value immediately extracted by it, earns a profit of 25. The average rate of profit in society would, therefore, be 25%.

Capitalist ground rent, however, constitutes the particular branch of surplus value. Landed proprietors in the capitalist mode of production receive this part of the social surplus value without participating in the production process with either capital or labor. Taking the example above, part of the 50m is appropriated by landed proprietors, for example, 10m, thus reducing the surplus value distributed between industrial and agricultural capitalists to 40m, and the average rate of profit from 25% to 20%. The particular condition that guarantees this power to landed proprietors is that the main economic factors in the branches of agriculture and extractive industry are constituted by nonenolizable natural forces. The exercise of this monopoly allows landed proprietors to charge rent for its use. The higher the ground rent, the lower the average rate of profit of a given society.

To understand this particular form of distribution of surplus value in more depth, let us now take the branch of agriculture separately to understand the Marxist theory of differential rent and absolute rent.

Let’s start with differential rent. Let us suppose two competing capitalists, applying the same amount of capital in the same planting area with soil of different qualities. Both pay 100 in capital, divided into 60c + 40v; the capitalist on soil A, with this capital of 100, produces 60 kg of wheat, while the capitalist on soil B, with the same magnitude of capital, produces 120 kg of wheat. The cost price of the two capitalists is the same = 100 (60 with constant capital and 40 with salary); the difference is that the capitalist on the best soil produces 120 kg of wheat, while the capitalist on the worst soil produces only 60 kg. However, as seen, in capitalist agriculture it is the production price of the worst soil that determines the market price. The production price of the worst soil, according to the formula established by Marx would be = cost price + average profit = (60c + 40v) + 25m = 125. Thus, every 60 kg sack of wheat, regardless of whether it was produced on the best or on the worst soil it will be sold at 125. The capitalist on the worst soil, selling his 60 kg bag of wheat at 125, earns an average profit of 25, and is satisfied with this result as it ensures the average rate of profit in a given society; although he would not be paying the rent to the owner of the worst soil, this issue will be clarified later when we discuss absolute rent.

On soil B, with higher fertility, the economic results would be different. In this soil, the capitalist with the same investment of capital and labor (60c + 40v) obtains 120 kg of wheat. His cost price for each sack of wheat (60 kg) would be = 100:2 = 50. However, as the market price is established by the production price of the worst soil, he would sell each sack at 125 and pocket 250 for both sacks sold. With an invested capital of 100, he would obtain a total profit of 150. What is the reason for this additional profit? There was no new method of exploitation of agriculture or greater exploitation of its workers (we are assuming the same rate of surplus value for both). The reason for this difference was that greater natural fertility of the soil allowed it, with the same expenditure of capital and labor, to produce twice as much compared to the worst soil.

However, this naturally high fertility constitutes a natural force monopolized by the owner of the best soil B, who charges a rent from the capitalist for the use of his soil, for example, 125. In this way, of the total profit obtained from the sale of the two sacks of wheat produced by capitalist B, the ground rent paid to the owner of this soil is discounted, that is, 150 – 125 = 25. Thus, the capitalist who produces on soil B receives exactly the same profit as the capitalist who produces on the worst soil, which It is the same profit obtained in the industry, as shown in our example.

The rent or ground rent received by the owner of the best land constitutes the differential rent. For Marx, therefore, the differential rent is equal to the difference between the individual production price and the market price, which is the production price of the worst soil.

But what about absolute rent?

As we know, the owner of the worst soil A will also charge a rental price. Marx does not bypass this practical problem as Ricardo does in his theory. For Marx, as per the example above, the rental of the worst soil could reach a value of 15 and still not violate the law of value. Let’s see: since the production price of the worst soil is (60c + 40v) + 25m, if the lease is 15 the market price will be = 125 + 15 = 140. In this case there would be the rent from the worst soil and the price of the agricultural product would not be above its intrinsic value (140). Marx thus manages to prove the existence of ground rent from the worst soil without violating the law of value. For the capitalist who produces on the worst soil to be able to pay rent worth 15 to the owner of A, the market price has to rise from 125 to 140. This increase in the market price also favors the owner of land B, who then charge a rent of 125 + 15. Therefore, the ground rent of the worst soil is an absolute rent, because it is earned by all landed proprietors in capitalist agriculture, while the differential rent is relative, as it varies according to the relative fertility of the soils. The owner of the worst soil receives only the absolute rent, while the owners of the most fertile soil receive the differential rent + the absolute rent.

From an economic point of view, agricultural commodities then become an exception: they are the only ones whose market price is higher than the production price. This constitutes a kind of monopoly in these branches of the economy. But as Marx highlights, this is not a “monopoly per se”, as would be the case if commodities with a lower organic composition were sold for a market price higher than their value. Marx’s theory of ground rent thus is able to explain the rent of all landed proprietors, of the most fertile soil and the worst soil, without violating the law of value or the law of free competition.

For Marx, the fact that commodities produced in branches with higher organic composition are sold for a price higher than their intrinsic value, that is, because they appropriate part of the surplus value produced in other branches, does not constitute a paradox. After all, as Marx demonstrates, these branches demand greater accumulation and concentration of capital and, therefore, dominate the economy as a whole. When they receive their share of surplus value, through the general rate of profit, they therefore receive their share of capitalist production. However, it would be absurd if capitalists in sectors with a lower organic composition, generally agriculture and extractive industries, were able to sell their commodities for a market price above their intrinsic value. If this were to occur, it would imply that agriculture would be dominating industry, whereas in practice the opposite is true in capitalism.

As we have already seen, the monopoly price itself is one of the characteristics of the imperialist stage. We saw that Lenin pointed out precisely this in the example of cartelized sugar production in the USA. In this case, the agricultural product is sold for a market price higher than its value; the difference between this market price and this value constitutes a form of rent particular of imperialism, which is different from the absolute rent studied by Marx. In Lenin’s example, it is not about the eccentric domination of sugar producers over the Yankee economy, but the domination of financial capital over society which, by imposing this monopoly price itself, extracts part of the social tribute that forms the its maximum profit from society.

Marx’s formulation contains different questions that require reflection for their assimilation and correct application in the study of concrete cases. Marx, in his formulation of the theory of differential and absolute rent, although he develops Ricardo in several aspects, maintains his correct postulates about capitalist production in agriculture, namely: 1) the same amount of capital and labor employed on different soils in the same area of land produce different results; 2) capitalists who apply this capital demand to achieve society’s general rate of profit; 3) the production price of the worst soil is the market regulating price. In other words, differential rent for Marx is not “born” as the leadership of the UOC (MLM) believe, solely from the difference in land fertility; it also depends on the average profit achieved by tenants on all the lands and to this end, the market price is established by the production price of the worst soil. Wherefore, Marx says that the price of production of the worst soil is “the basis of differential rent”. ⁷⁴ To assimilate Marx’s theory, therefore, it is necessary to understand the question of why the price of production of the worst soil determines the market price in the pure form of capitalist ground rent.

As seen, for Ricardo it is always the worst conditions of production that determine the social value of the commodity and, for him, there is an immediate identity between price and value of a given product. Marx, already in Book I of Capital, demonstrates that it is the average conditions that are responsible for establishing the working time socially necessary for the production of a commodity. For Marx, this law is valid for both industrial production and agricultural production, however in the latter there is a specific functioning of this law, which constitutes a very important particular feature in the Marxist theory of rent.

The same competition that exists in industry, between manufacturers of the same product, exists in capitalist agriculture. All capitalist wheat producers, for example, compete with each other and seek to reduce the cost prices of their product as much as possible, either by reducing the value of the constant capital employed (seeds and tractors, for example) or by increasing the exploitation of their workers as much as possible. Any capitalist who manages to reduce wheat production costs, through a new planting method, for example, will achieve that the individual value of his product is lower than the average social value of all producers. He will thus earn additional profit, just as occurs in industry. As already seen, competition pushes all capitalist producers to use the most rational methods of production and to increase exploitation, this leads to an equalization of socially necessary working time, individual values tend to converge towards one same value, additional profit thus tend to disappear, and the commodity to become cheaper.

However, in agriculture and the extractive industry there is a particularity that prevents, to a certain extent, this equalization of individual values and the tendency to suppress additional profits. In agriculture, land is the main element of production and in the extractive industry, the main is the reserve of use-values. A new method of production or a new way of intensifying work can all be generalized and used by competing capitalists. However, a source of oil at the surface of the soil is not a universalizable production condition. Private ownership of this source necessarily excludes other competitors from exploiting it. Thus, the capitalist who exploits this source will have much lower production costs than one who exploits the worst soil, such as oil sources embedded in underground rocks. This differential soil fertility cannot be universalized, it therefore constitutes a natural force that can be monopolized and is monopolized by a land owner. In the capitalist mode of production, as we have seen, the monopolization of these natural forces allows land owners to extract part of the surplus value that would belong to capitalists.

These two conditions: monopolize natural force and the need for average profit, determine that in agriculture and the extractive industry, unlike the manufacturing industry, it will be the production price of the worst soil that will determine the market price. Following the example seen above, of two capitalists who produce on soil A (worse fertility) and B (higher fertility); capitalist A will only plant wheat in A if he earns the average profit; the soil owner of B will only rent his soil if he pockets the additional profit that the natural forces of his soil provide, in this case differential rent, as ground rent; the owner of land A, in turn, will be satisfied with an absolute rent, which must constitute at most the difference between the production price of this worst soil and the intrinsic value of this commodity. These are the basic conditions of capitalist production in agriculture: all owners demand rent for the exploitation of their land, rent that varies in value depending on the economic fertility of the land; and all tenants demand the average profit.

In this way, as Marx demonstrates, for the worst soil to be exploited it is necessary for the market price of wheat, for example, to rise to the point where the capitalist tenant who cultivates there reaches the average profit, and the owner of this soil receive a rent, however small it may be. Therefore, in pure capitalist conditions, in agriculture and the extractive industry, the price of production of the worst soil will always be the market regulator. However, this regulation by the worst soil does not only imply the excess increased value of absolute rent, it also implies an artificial increased value of the commodities from the most fertile soils. This is what Marx calls “false social value”. Let’s see:

“Regarding differential rent in general, it is to be noted that the market value is always above the total price of production of the total quantity of products. As an example, let us take Table I. Ten quarters of total product are sold for 600 shillings because the market price is determined by the price of production of A, which amounts to 60 shillings per quarter. But the actual price of production is:

Soil	Quarters		Price of production by plot		Quarter		Actual production price by quarter
A	1	=	60		1	=	60
B	2	=	60		1	=	30
C	3	=	60		1	=	20
D	4	=	60		1	=	15
TOTAL	10	=	240	Average	1	=	24

The actual price of production of these 10 quarters is 240 shillings; but they are sold for 600 shillings, i. e., at 250% of the price of production. The actual average price for 1 quarter is 24 shillings; the market price is 60 shillings, i. e., also 250% of the production price. This is determination by market value as it asserts itself on the basis of the capitalist mode of production through competition; the latter creates a false social value. This arises from the law of market value, to which the products of the soil are subject. The determination of the market value of products, including therefore agricultural products, is a social act, albeit a socially unconscious and unintentional one. It is based necessarily upon the exchange value of the product, not upon the soil and the differences in its fertility.” ⁷⁵

In other words, production on the four soils (A, B, C and D), cultivated by different capitalist tenants, corresponds to a total of 10 quarters of wheat. The production price of the worst soil is 60 shillings each quarter, with the cost price (constant capital + variable capital) = 50 shillings and the average profit of 10 shillings, corresponding to a general rate of profit of 20%. If the market price is not 60 shillings a quarter, the capitalist who produces in A will not earn the average profit, much less will it be possible to pay the rent on the worst soil. So, there will only be 10 quarters available on the market, if the market price reaches this level. However, the greater the difference in fertility between the most fertile soil and the worst market-regulating soil, the greater the differential rent earned by the most fertile soil will be. This phenomenon, governed by the “law of market value” to which soil production is subject, implies that society has to pay a market price much higher than the real average production price of each quarter of wheat. Under these conditions, society pays 60 shillings for each quarter of wheat, while the real average production price for each quarter is only 24 shillings. This difference, as Marx indicates, from 600 to 240 shillings, for 10 quarters of wheat, that is, this value of 360 shillings is the excess value that society pays to landed proprietors in the condition of differential rent. This value, as Marx points out, is not “born” from the difference in soil fertility, but is based on the law that regulates the exchange-value of soil production; which determines that the worst soil regulates the market price.

This irrational behavior of market prices for production from soil is a reflection of the irrationality of landed private property in the capitalist mode of production. Property of a means of production that is not a product of labor enables its owner to appropriate part of the social surplus value without participating in anything in the production process. Landed private property and the need for average profit imply that society, as in the example above, pays more for each quarter of wheat and supports the parasitic class of big landed proprietors. As Marx analyzes this situation, it is not inherent to agricultural production, but characteristic of its capitalist exploitation:

“If we suppose the capitalist form of society to be abolished and society organized as a conscious and planned association, then the 10 quarters would represent a quantity of independent labor time equal to that contained in 240 shillings. Society would not then buy this agricultural product at two and a half times the actual labor time embodied in it and the basis for a class of landowners would thus be destroyed. (…) The identity of the market price for commodities of the same kind is the manner whereby the social character of value asserts itself on the basis of the capitalist mode of production and,

in general, any production based on the exchange of commodities between individuals. What society overpays for agricultural products in its capacity of consumer, what is a minus in the realization of its labor time in agricultural production, is now a plus for a portion of society, for the landlords.” ⁷⁶

Big landed proprietors and capitalist production lead to irrational phenomena in agricultural production, such as false social value. This situation, in turn, which to a certain extent contradicts the basic foundations of the capitalist mode of production, is partly due to the fact highlighted by Marx about the historical content of landed property:

“From the standpoint of capitalist production, capital property does in fact appear as the “original” because capitalist production is based on this sort of property and it is a factor of and fulfils a function in capitalist production; this does not hold good of landed property. The latter appears as derivative, because modern landed property is in fact feudal property, but transformed by the action of capital upon it; in its form as modern landed property it is therefore derived from, and the result of capitalist production.” ⁷⁷

The nationalization of land, therefore, as explained by Marx and Lenin, is an attempt by the bourgeoisie to turn against this feudal irrationality from which its modern form derives. As Marx highlights:

“Only this much is correct: Assuming the capitalist mode of production, then the capitalist is not only a necessary functionary, but the dominating functionary in production. The landowner, on the other hand, is quite superfluous in this mode of production. Its only requirement is that land should not be common property, that it should confront the working class as a condition of production, not belonging to it, and the purpose is completely fulfilled if it becomes state-property, i.e., if the state draws the rent. The landowner, such an important functionary in production in the ancient world and in the Middle Ages, is a useless superfetation in the industrial world. The radical bourgeois (with an eye moreover to the suppression of all other taxes) therefore goes forward theoretically to a refutation of the private ownership of the land, which, in the form of state property, he would like to turn into the common property of the bourgeois class, of capital. But in practice he lacks the courage, since an attack on one form of property—a form of the private ownership of a condition of labor—might cast considerable doubts on the other form. Besides, the bourgeois has himself become an owner of land.” ⁷⁸

If the bourgeoisie lacks the courage to negate private landed property in imperialist countries, this does not mean that it is obstructed from negating it, for its own benefit, in semi-colonial and colonial countries. In this way, the imperialist bourgeoisie suppresses ground rent in oppressed countries, or appropriates it according to the conditions. After all, it would be unthinkable that financial capital would be willing to pay this false social value to big landed proprietors in semi-colonial countries, or that it would be willing to pay the tribute that represents absolute rent, as a market price above the production price of the worst soil, to the landlords of oppressed nations. Likewise, it would be unthinkable to conclude that the big bourgeoisie of semi-colonial countries would be willing to pay the average profit and, in addition, an additional profit to small landed peasant.

It is common knowledge that the reality of the exploitation of the mineral wealth of semi-colonial countries, that the export of agricultural products from these nations and that peasant production does not generate the payment of an additional profit to these nations or to these peasant masses. This seems to contradict the Marxist theory of capitalist ground rent, but there is no such incongruity. Marx completely solved the problem of the laws of capitalist ground rent; What occurs, therefore, is not a violation of the law, but the explanation that the manifestation of these laws in semi-colonial mineral and agricultural production and in peasant production is different from their pure, or classical, form of ground rent in England in the 19th century. Fully understanding the theory of capitalist ground rent is key to seeing how the dominance of financial capital imposes non-capitalist forms of rent on oppressed nations and the peasant masses of these countries. Understanding this theory is the basis for understanding the international significance, in the imperialist phase, of the evolution of the forms of semi-feudal relations of production. Without this understanding it is impossible to precisely analyze the relationship between the fundamental contradictions in the world today, as well as identify which of them is the principal contradiction. Marx himself is the precursor of what the leadership of the UOC (MLM) calls the theory of semi-feudalism. For it is the founder of communism who provides us with the demonstration that peasant production and semi-colonial production do not provide capitalist ground rent. A distorted understanding of the Marxist theory of ground rent can only lead to absurd conclusions such as the existence of a “capitalist peasant landowner”, and never clarify the current phenomena and the functioning of ground rent under imperialism.

2.2- Marx’s analysis of the ground rent of peasants in general and of big landed proprietors in semi-colonial countries

Before moving on to the analysis of the functioning of ground rent in the era of imperialism, it is necessary to return to the studies carried out by Marx on the ground rent of peasants and big landed production in semi-colonial countries in the stage of free competition capitalism. Marx does not reach the formulation a complete theory on feudal and semi-feudal ground rent or on its functioning in semi-colonial production already subject to the capitalist world market. However, he highlights that these modalities do not conform to capitalist forms of ground rent and, in doing so, ingeniously establishes the theoretical foundations that allow us to understand in greater depth the development of the relations of production in the countryside and the relations of exploitation of imperialism towards oppressed nations.

Anyone who has even the slightest knowledge of the living conditions of the peasant masses in colonial and semi-colonial countries realizes that the economic relation of these masses with the capitalist market does not include those principles of capitalist ground rent established by Marx. Whether they are peasants who own small or medium-sized plots of land, or whether they are peasants who are “tenants” of the lands of latifundium, it would be difficult to conclude that these “rural producers” receive the average profit, which would fall to them as capitalists, or the additional profit (differential rent) as owners of more fertile soil, or would be able to impose a market price higher than their production price (absolute rent) if they owned the worst soil. As already mentioned above, Marx shows that poor peasants, even the owners of their land, as a rule, do not receive the average profit, the differential rent or the absolute rent; In most cases, the results of their production only cover the value corresponding to the wage they would receive for the same work and in many cases they do not even earn this value.

We know that in general, peasants who own land are in the worst soil. If the laws of capitalist ground rent governed the peasant economy in a pure way, what would be the result? The production price (which includes the average profit) of the peasants would regulate the market price, and would also be slightly above this value in order to provide absolute rent to these small landed proprietors. Everyone who minimally knows the history and the countryside of semi-colonial countries knows that this is not the situation that prevails. As a rule, the market price is always below the peasants’ production price, who, when succeeding in selling all their production, are barely able to cover the necessary costs. This condition imposes exactly the situation of ruined economy in which the peasant masses live. There are several ways to manipulate this market price, whether through commercialization in which peasants are forced to sell their production at very low prices because they are unable to sell it, or through competition with the production of big landed property which can produce at much lower costs. Any of these or other forms converge to the same result: the poor peasant does not receive the average profit, does not receive differential rent or absolute rent. In this way, it is not hard to see that in semi-colonial economies, it is not the price of production of the worst soil (generally owned or rented by poor peasants) that regulates the market price. An indispensable condition for the existence of capitalist ground rent is missing; Peasant landed property, therefore, implies production relations other than capitalist ones. Lenin highlights Marx’s conclusion that peasants do not earn absolute rent in the following way:

“Of course, the existence of small landed property, or, more correctly, of small farming, introduces certain changes in the general propositions of the theory of capitalist rent, but it does not destroy that theory. For example, Marx points out that absolute rent as such does not usually exist under small farming, which is carried on mainly to meet the needs of the farmer himself (…) But the more commodity production develops, the more all the propositions of economic theory become applicable to peasant farming also, since it has come under the conditions of the capitalist world.” ⁷⁹

This passage is very important, because in it, Lenin highlights precisely the changes in the general theses of the theory on ground rent that are essential to be studied by Communist Parties, especially in semi-colonial countries. It is also very important the note that for Marx, in general, there is no absolute rent for peasants. As for Lenin’s statement about the validity of these laws when developing the mercantile economy, it is correct as a general tendency of the free competition stage. But in the course of capitalist development in the 20th century, this tendency changed, as we entered the era of monopoly capital. In the imperialist stage, the peasant economy always remains subjugated by monopoly capital and, in this way, it is impossible for the peasants to impose on the bourgeoisie, on imperialism, on the city in general, a monopoly price on their production that would guarantee them at least the absolute rent from the worst soil. To survive as peasants, this mass is forced to accept only a rent corresponding to the wage for equal work, sometimes a little more, most of the time a little less. Regarding the peasant economy in the epoch of imperialism, Chairman Mao highlights the following issue:

“To serve the needs of its aggression, imperialism ruined the Chinese peasants by exploiting them through the exchange of unequal values and thereby created great masses of poor peasants, numbering hundreds of millions and comprising 70 per cent of China’s rural population.” ⁸⁰

Chairman Mao, when highlighting the “exchange of unequal values” imposed by imperialism on the Chinese peasantry, is highlighting precisely one of the most common ways for financial capital to control the market price in the era of imperialism. In this way, it imposes on the peasants a monopoly price in the strict sense (that is, in which the market price of industrialized commodities not only exceeds their value, but also exceeds the average profit that would correspond to these commodities). Thus, tools, machines, fertilizers, pesticides, etc., are sold to peasants at monopoly prices, increasing the production cost of small properties, preventing them from earning average profit, differential rent or absolute rent. As Chairman Mao points out, in the epoch of imperialism the tendency of the free competition stage that the laws of capitalist ground rent would govern the peasant economy as it became mercantile was not confirmed. The more mercantile the peasant economy became in semi-colonial countries, the more ruined it became. The difficult thing is not to see this situation, the difficult thing, theoretically speaking, is to understand why the reproduction of this ruined economy becomes necessary for monopoly capital, an issue that we will seek to clarify further on.

Let’s look in more detail at Marx’s analysis of why peasant property, under normal circumstances, does not earn absolute rent in capitalism (in the stage of free competition):

“This form of landed property (…) The assumption here is generally to be made that no absolute rent exists, i. e., that the worst soil does not pay any rent (…) For, absolute rent presupposes either realized excess in product value above its price of production, or a monopoly price exceeding the value of the product. But since agriculture here is carried on largely as cultivation for direct subsistence, and the land exists as an indispensable field of employment for the labor and capital of the majority of the population, the regulating market price of the product will reach its value only under extraordinary circumstances.” ⁸¹

As we saw above, Marx, developing and rectifying the flaws of Ricardo’s rent theory, demonstrates that the existence of capitalist ground rent in the worst soil can exist without violating the law of value. Because as agriculture is a branch of production in which there is an organic composition lower than the social average, the market price of these commodities is sold below their value, but with an average profit. Marx then demonstrates that absolute rent represents, at its maximum, this difference between the market price and the intrinsic value of the commodity. In the passage above, he is saying that the market price of peasant production can only reach intrinsic value in exceptional circumstances; in other words, the peasantry only receives absolute rent in situations where demand is much greater than supply, for example, when there is an excessive scarcity of certain commodities. Under normal circumstances, Marx states that there is no absolute rent for the peasantry.

Marx demonstrated in his theory of ground rent that the worst soil is only exploited in a capitalist way, if its production price regulates the market price. In this way, if there is demand above supply for wheat, for example, and all the best quality soil is producing their maximum, a capitalist will only expand production to the worst soil if the market price rises enough for him to earn the average profit and, in addition, rise enough for him to pay the rent to the owner of the worst soil. This requirement, Marx highlights, does not exist for peasant production:

“For the peasant owning a parcel, the limit of exploitation is not set by the average profit of capital, in so far as he is a small capitalist; nor, on the other hand, by the necessity of rent, in so far as he is a landowner. The absolute limit for him as a small capitalist is no more than the wages he pays to himself, after deducting his actual costs. So long as the price of the product covers these wages, he will cultivate his land, and often at wages down to a physical minimum.” ⁸²

As long as the market price covers the salary that the peasant pays himself, he will produce to sell. In other words, unlike capitalist production, the peasant cultivates on the worst soil even if he does not earn a profit, even if he does not receive rent in case he is the owner of this land. From this it is important to draw the following conclusion: even in the stage of free competition, the peasant’s cost price does not regulate the market price; Ultimately, those who regulate the market price are the worst soils cultivated by large-scale production. Therefore, when the peasantry competes with the products of large-scale production, they are forced to sell their commodities at the market price established by it, that is, at a market price that makes it impossible for them to earn a satisfactory rent. As Chairman Mao demonstrates, this market regulation is even more unthinkable in the imperialist stage. Both absolute rent and the possibility of imposing a monopoly price, in strict sense, on agricultural commodities (as in Lenin’s example of the price of sugar in the USA at the beginning of the 20th century) are not possible, in general, for the peasant economy, as Marx highlights:

“[Absolute rent and the monopoly price are two cases that] are least of all the case under the management of land parcels and small landownership because precisely here production to a large extent satisfies the producers’ own wants and is carried on independently of regulation by the average rate of profit. Even where cultivation of land parcels is conducted upon leased land, the lease money comprises, far more so than under any other conditions, a portion of the profit and even a deduction from wages; this money is then only a nominal rent, not rent as an independent category as opposed to wages and profit.” ⁸³

It seems quite clear to us that for Marx, peasant rent obtained from small agricultural exploitation does not constitute capitalist ground rent. Let’s now see how he analyzes the rent from large agricultural exploitation in semi-colonies focused on exporting to the world market:

“(…) it is a mistaken assumption that the land in colonies and, in general, in young countries which can export grain at cheaper prices, must of necessity be of greater natural fertility. The grain is not only sold below its value in such cases, but below its price of production, i.e., below the price of production determined by the average rate of profit in the older countries.” ⁸⁴

Marx is stating that the price of wheat exported by the colonies is not low because their soils are more fertile, but rather because they are sold below the production price determined by the average rate of profit in the metropolises. The economic meaning of Marx’s conclusion is this: if the low price of wheat in the colonies was due to greater soil fertility, this would mean that with the same amount of capital and labor, in the same area of land, a greater quantity of wheat would be obtained in the colonies compared to in the metropolis; These conditions, as already seen, would allow an additional profit for colonial wheat in relation to wheat from the metropolis, which could be converted into differential ground rent; If under these conditions colonial wheat were sold at a lower price, it would only fail to provide differential rent, but would still provide average profit and absolute rent. However, the situation is even more acute; Marx shows that colonial wheat not only fail to receive a hypothetical differential rent, because as it is produced on worse land and is sold below the production price of wheat in the metropolis, in a similar way to peasant production, colonial production does not receive differential rent, absolute rent not even the average profit in its entirety.

In this there is a coincidence with peasant ground rent, but there is also an enormous difference in this. Because, while peasant rent at best covered what would be the salary for the same work, the rent of the agro-exporting latifundium can be enormous. The conditions that determine this enormous rent are highlighted by Marx when analyzing colonial production as follows:

“[The colony’s] entire surplus production appears, therefore, in the form of grain. This from the outset sets apart the colonial states founded on the basis of the modern world market from those of earlier, particularly ancient, times. They receive through the world market finished products, such as clothing and tools which they would have to produce themselves under other circumstances. Only on such a basis were the Southern States of the Union enabled to make cotton their staple crop. The division of labor on the world market makes this possible. Hence, if they seem to have a large surplus production considering their youth and relatively small population, this is not so much due to the fertility of their soil, nor the fruitfulness of their labor, but rather to the one-sided form of their labor, and therefore of the surplus produce in which such labor is incorporated.” ⁸⁵

In other words, colonization based on the capitalist world market, on the international division of labor, allows all surplus production (for commercialization) to be configured as wheat. The gigantic volume of this surplus is due neither to soil fertility nor labor productivity, but to the unilaterality of production. Thus, regarding this gigantic volume of wheat, Marx was analyzing that in this case the production in the north of the USA, could be sold below the production price of the metropolis and still receive a sumptuous profit. This is a huge difference in relation to peasant production, which is permanently ruined by big property. However, in both cases, peasant production in general and large-scale production for export, analyzed by Marx, receive neither the capitalist ground rent nor the average profit typical of this mode of production.

This condition of colonial production and peasant production, that is, of not retaining all or even any part of the additional profit that constitutes capitalist ground rent, was already the object of an important struggle between the English industrial bourgeoisie and the landed aristocracy. After all, as we have seen, capitalist ground rent is a branch of the social surplus value that land owners extract from capitalists; It is clear that the industry reacts against this extraction and seeks to reduce ground rents as much as possible. In this, peasant and colonial production, especially the latter, played an important role throughout the 19th century. Because as Marx analyzes, when colonial wheat is imported, especially without tributes, as it is sold for a price below the production price, it is this one what starts to regulate the market price. This way, when the market price falls, the differential rent of the best metropolitan lands is reduced. When this market price is reduced thanks to the import of colonial wheat, which generates neither capitalist rent nor average profit, the value of labor power is reduced, as a large part of this is made up of food costs. The reduction in the value of labor power is followed by a reduction in the wages of the proletariat and consequently an increase in the rate of surplus value. Thus, colonial wheat, even at the time of free competition, was already an important factor for increasing the rate of surplus value and the rate of profit. As Marx highlights:

“Inasmuch as the value of labor power rises because there is a rise in the value of the means of subsistence required for its reproduction, or falls because there is a reduction in their value (…) a drop in surplus value corresponds to such appreciation and an increase in surplus value to such depreciation (…)” ⁸⁶

Engels, in an important addition to Book III of Capital, explains to us, then, how agricultural production (large and small) contributes to counteracting the growth tendency in ground rent due to the occupation of increasingly larger amounts of land of the globe and successive capital investments in the same portion of land (differential rent type II):

“Thus, the more capital is invested in the land, and the higher the development of agriculture and civilization in general in a given country, the more rents rise per acre as well as in total amount, and the more immense becomes the tribute paid by society to the big landowners in the form of surplus profits — so long as the various soils, once taken under cultivation, are all able to continue competing. This law accounts for the amazing vitality of the class of big landlords. (…) However, the same law also explains why the vitality of the big landlord is gradually being exhausted. When the English corn duties were abolished in 1846, the English manufacturers believed that they had thereby turned the landowning aristocracy into paupers. Instead, they became richer than ever. How did this occur? Very simply. (…) Since no total displacement of the poorest soil took place, but rather, at worst, it became employed for other purposes — and mostly only temporarily — rents rose in proportion to the increased investment of capital, and the landed aristocracy consequently was better off than ever before.

“But everything is transitory. Transoceanic steamships and the railways of North and South America and India enabled some very singular tracts of land to compete in European grain markets. These were, on the one hand, the North American prairies and the Argentine pampas — plains cleared for the plough by Nature itself, and virgin soil which offered rich harvests for years to come even with primitive cultivation and without fertilizers. And, on the other hand, there were the land holdings of Russian and Indian communist communities which had to sell a portion of their produce, and a constantly increasing one at that, for the purpose of obtaining money for taxes wrung from them — frequently by means of torture — by a ruthless and despotic state. These products were sold without regard to price of production, they were sold at the price which the dealer offered, because the peasant perforce needed money without fail when taxes became due. And in face of this competition — coming from virgin plains as well as from Russian and Indian peasants ground down by taxation — the European tenant farmer and peasant could not prevail at the old rents. A portion of the land in Europe fell decisively out of competition as regards grain cultivation, and rents fell everywhere (…) and therefore the lament of farmers from Scotland to Italy and from southern France to East Prussia.” ⁸⁷

In this passage, Engels makes a very important analysis of the economic role of agricultural production in the colonies for industrial production and for agriculture in industrialized Europe in the 19th century. The unilaterality of large colonial production allows landlords to export their commodities with high profitability but without earning capitalist ground rent. The poverty of peasants in the colonies forces them to sell their commodities at a market price that does not cover the costs of production. The end of import taxes on agricultural commodities, in 1846, in England, increased the influx of these agricultural products whose market price did not pay for a high capitalist ground rent. The immediate result of this measure was the reduction of the capitalist ground rent of the English aristocracy, as the market price of these products fell, and, in turn, led to a substantial increase in the surplus value extracted by English industrialists. Capitalist ground rent not paid to colonial producers allowed the lowering of food market prices, thus a reduction in wages and an increase in surplus value and capitalist profit. This relationship of exploitation of oppressed nations and peasants, already identified by Marx and Engels, far from being eliminated, worsened in the monopolist phase of capitalism.

There is no doubt, therefore, that peasant and colonial production for export, that is, monoculture for the world market, so characteristic of Latin American economic-social formations, according to Marx’s analysis, do not constitute forms of capitalist rent. What type of rent are these? Marx’s studies on the genesis of capitalist ground rent help us clarify this very important question. In this section of Book III of Capital, Marx shows that ground rent, like capital, is a social relation, that every social relation is based on a relation of production and that in class society every relation of production is a relation of exploitation, of extracting surplus labor. Marx concludes, therefore, that the characterization of the type of ground rent received is the key for the characterization of the predominant relations of production. He shows, for example, that, for an autonomous producer, who owns the means of production and working conditions, to transfer part of the result of his production to an exploitative agent, this concession can only occur through extra-economic “extortion”:

“The direct producer, according to our assumption, is to be found here in possession of his own means of production, the necessary material labor conditions required for the realization of his labor and the production of his means of subsistence. He conducts his agricultural activity and the rural home industries connected with it independently. (…) Under such conditions the surplus labor for the nominal owner of the land can only be extorted from them by other than economic pressure, whatever the form assumed may be.” ⁸⁸

As Marx’s analysis demonstrates, the agro-exporting landlords of the semi-colonies and the peasants supply their commodities without earning an average profit and capitalist ground rent, the former with a huge rent, the latter in permanent ruin. These agricultural commodities without capitalist ground rent, in turn, result in a greater production of surplus value, a higher rate of profit for capitalists, as they provide conditions for reducing the wages of laborers in these countries. The negative rent from this agricultural and peasant production is realized as surplus value for the capitalists, mainly for imperialist financial capital, according to its distribution. Even though they are legal and de facto owners of their land, the agro-exporting landlords and the peasant do not fully realize their property economically, that is, they are unable to transform this property into the power to extract the surplus value of the bourgeoisie, which characterizes capitalist ground rent. After all, as Marx highlights: “(…) the appropriation of rent is that economic form in which landed property is realized”. ⁸⁹ However, those who economically realize the landed property of the semi-colonial large estates and of the peasantry, in general, is the big industrial bourgeoisie, ultimately and to a greater extent imperialist finance capital, as it transforms this negative ground rent into an increase in surplus value.

Between the metropolis and the colony/semi-colony there is a relationship of domination by the first and dependence on the second, in short, of vassalage, which by different means (economic, political and military) coerces the landlords to hand over their commodities below the production price. The unilaterality of monoculture for exporting makes these economic-social formations doubly dependent: they need the metropolises to obtain manufactured commodities, they need the metropolises to transport their production, they need the metropolises for capital to invest. What happens at the local level with the peasants is repeated at the global level with the semi-colonial agro-exporting latifundium. The city exploits the countryside in general and industry exploits agriculture in particular, and the metropolis exploits the colonies/semi-colonies. The big landlords, therefore, are like vassals of the metropolitan bourgeoisie, politically and ideologically aligned with the ideas, customs and culture of the metropolis.

All these tendencies that appeared in the 19th century have fully developed in the imperialist stage. The ground rent of the agro-exporting latifundium is, therefore, an evolved form of the feudal ground rent which, even based on the exploitation of wage labor, does not provide a capitalist ground rent. It is, therefore, a semi-feudal rent. The peasant’s ground rent is also not capitalist, even if he is the legal and de facto owner of his plot of land, he is not the one who economically realizes this property. Its ruined production increases capitalist profits, despite low productivity. The negative rent contained in his commodity is the tribute that the peasant pays to society in order for him not to descend to the condition of proletarian. Or as Marx teaches us:

“For the peasant parcel holder to cultivate his land, or to buy land for cultivation, it is therefore not necessary, as under the normal capitalist mode of production, that the market price of the agricultural products rise high enough to afford him the average profit, and still less a fixed excess above this average profit in the form of rent. It is not necessary, therefore, that the market price rise either up to the value or the price of production of his product. This is one of the reasons why grain prices are lower in countries with predominant small peasant land proprietorship than in countries with a capitalist mode of production. One portion of the surplus labor of the peasants, who work under the least favorable conditions, is bestowed gratis upon society (…). This lower price is consequently a result of the producers’ poverty and by no means of their labor productivity.” ⁹⁰

Peasants are violently oppressed. Latifundium is satisfied with huge revenues at the expense of the loss of the entire nation; dependent on imperialism, it becomes the most loyal ally of foreign domination in the colonies/semi-colonies. We will now seek to demonstrate, theoretically, the mechanisms of suppression and appropriation of ground rent by imperialism in its search for maximum profit.

2.3- Suppression or appropriation of ground rent from oppressed nations and peasants by monopoly capital to realize maximum profit

In the topic studied previously, Maximum profit as a particularity of monopoly capitalism, we saw how the permanent super-exploitation of the proletariat of oppressed nations and the restriction of the profit of the national bourgeoisie, that is, the non-monopoly middle bourgeoisie of colonial and semi-colonial countries, constitute two sources for the creation of super-profits for finance capital. We saw that the search for maximum profit constitutes a particularity of the imperialist stage, resulting from qualitative changes in the sphere of production and in the mode of circulation of free competition capitalism. At the same time, we seek to demonstrate how Marx already considered plausible the modification of the law of distribution of social surplus value, that is, the law that governs the conformation of a general rate of profit that determines an average profit for all capitalists according to the magnitude of their capital. As seen, Marx questioned how the rate of profit would behave in the face of a very large concentration of capital in relation to small and middle capitalists. In his studies on ground rent, for example, Marx states that: “(…) small capitalists, as is partly the case in England (…), are satisfied with making a profit below the average”. ⁹¹

In the imperialist stage this tendency is consolidated, which does not mean the suppression of the general rate of profit, only that there is a general rate of profit of financial capital, which regulates the distribution of maximum profit among the imperialist bourgeoisie in its rampant race for the dominance of the entire globe; another general rate of profit, which regulates the distribution of monopoly profit among the bureaucratic and comprador bourgeoisie in semi-colonial countries; and, finally, a general rate of profit, which regulates the distribution of the minimum profit among the national bourgeoisie in a given country. All of these based on the super-exploitation of the proletariat and benefited from the suppression of ground rent. In semi-colonial countries, the suppression of peasants’ ground rent directly benefits the bureaucratic bourgeoisie and, in part, the national bourgeoisie; and, for the imperialist bourgeoisie, the suppression of the ground rent of the peasants, of the agro-exporting latifundium and of the nations as a whole (in the exploitation of sources of raw material and energy and a captive market for their corporations’ commodities) constitutes an enormous source for forming its maximum profit.

In this way, the study of the Marxist theory of ground rent helps us to understand that the set of sources for imperialist maximum profit are: 1) the permanent super-exploitation of the proletariat of oppressed nations; 2) the suppression or appropriation of ground rent from sources of raw materials and energy in colonial/semi-colonial countries; 3) limitation of the ground rent of the semi-colonial agro-exporting latifundium which, although enormous, is far below what it would represent if it were capitalist ground rent ; 4) suppression of the ground rent of the peasants; and 5) the restriction of the profit of the national bourgeoisie, which, reduced to a minimum profit, helps forming the maximum profit of the imperialist bourgeoisie. Three of these sources are directly related to ground rent: suppression of the ground rent of the peasants, limitation of semi-colonial latifundium’s ground rent and suppression or appropriation of ground rent related to sources of raw materials and energy from oppressed nations. All these particular forms of ground rent were studied by Marx, let us quickly highlight some of his conclusions about these three sources and their importance for the global functioning of capitalist production. Regarding peasant production, Marx concludes that:

“The moral of history, also to be deduced from other observations concerning agriculture, is that the capitalist system works against a rational agriculture, or that a rational agriculture is incompatible with the capitalist system (although the latter promotes technical improvements in agriculture), and needs either the hand of the small farmer living by his own labor or the control of associated producers.” ⁹²

In other words, to the extent that the peasant economy sells its production for a value below its cost price, this helps the bourgeoisie to increase surplus value, as it allows it to reduce wages. Not because the peasant production, in small parcels, is more productive than large-scale production, but because it does not require average profit or capitalist ground rent, it benefits the bourgeoisie by increasing its rate of surplus value and rate of profit. In turn, the semi-colonial latifundium, by disposing of agricultural commodities produced at the expense of the natural wealth of oppressed nations, helps the imperialist bourgeoisie in reducing ground rent in their own country, and, mainly, providing them with an increase in surplus value to the extent that land concentration imposes the existence of a peasant economy permanently ruined due to producing food below its cost:

“(…) in a country like the United States [in the 19th Century], (…) it is possible over a considerable period (…) that the surplus-value which the farmer produces on top of average profit is not realized in the price of his product, but that lie may have to share it with his brother capitalists in the same way as this is done with the surplus-value of all commodities which would give an excess profit, i.e., raise the rate of profit above the general rate, if their surplus-value were realized in their price. In this case the general rate of profit would rise, because wheat, etc., like other manufactured commodities, would be sold below its value. This selling below its value would not constitute an exception, but rather would prevent wheat from forming an exception to other commodities in the same category.” ⁹³

This situation, particular to the United States in the 19th century, whose production of wheat for the English market led to an increase in the general rate of profit for the English bourgeoisie, became the rule of the world food market in the imperialist stage. The agricultural commodities of oppressed nations, as a rule, are sold below their value, below the production price from the worst soil; although they earn enormous profits and, therefore, do not constitute a class oppressed by imperialism, they pocket money at the expense of squandering the natural wealth of semi-colonial countries in consortium with the imperialist powers. A similar situation occurs with raw materials, where the reduction of the market price below the production price had already been highlighted as a decisive economic measure, by Marx, for increasing the profit rate:

“This shows, among other things, how important the low price of raw material is for industrial countries (…) It follows furthermore that foreign trade influences the rate of profit, regardless of its influence on wages through the cheapening of the necessities of life. (…) economists like Ricardo, b who cling to general principles, do not recognize the influence of, say, world trade on the rate of profit.” ⁹⁴

Marx, unlike Ricardo, shows the double importance of the world market in forming the rate of profit, both in the commerce of raw materials at low prices, as it results in constant capital savings and, therefore, a reduction in the cost price and an increase of capitalist profit; as well as the reduction of means of subsistence, food, as they allow a reduction in wages and an increase in the rate of surplus value. In this way, it is clear that for imperialism the suppression of capitalist ground rent, which would be attributed to agricultural commodities and minerals produced in the colonies/semi-colonies, constitutes an essential source for obtaining maximum profit. The methods of suppressing ground rent by finance capital follow the same logic used in all economic relations of monopolies. That is, monopolistic control of production and circulation allows finance capital to suppress capitalist rent from the primary products of colonies/semi-colonies, whether by paying a modest compensation, royalties enough to bribe the few colonial/semi-colonial landlord class which, although being relatively high values, are far below what would be the capitalist ground rent for these commodities. Or finance capital resorts to the use of dynamite, so used by Yankee imperialism, to plunder the natural resources of oppressed nations. As Lenin highlights regarding this logic:

“Monopoly hews a path for itself everywhere without scruple as to the means, from paying a ‘modest’ sum to buy off competitors, to the American device of employing dynamite against them.” ⁹⁵

The result of the use of these two methods by imperialism is always the same: the control of finance capital overall production in colonial/semi-colonial countries. When this control is established, the ground rent that had previously been suppressed becomes artificially raised, thus establishing the particular form of the market price in the imperialist era: the monopoly price. This phenomenon was studied by Marx, but it constituted an exception to the free competition mode of circulation. As Lenin demonstrates, it becomes the norm in the imperialist stage:

“(…) where it is possible to seize all or the most important sources of raw materials, the emergence of cartels and the establishment of monopolies are particularly easy. (…) Monopoly prices govern”. ⁹⁶

The monopoly price itself, as we have already mentioned, is a distinct phenomenon from the monopoly price of agricultural commodities resulting from absolute rent. This is an important economic question, to understand the particular characteristics of the imperialist monopoly. We saw that the theory of absolute rent formulated by Marx elucidates how there can be payments for rent in the worst soil without violating the law of value. In the case of agricultural commodities, there is a monopoly price not because these commodities are sold above their value, but because the market price is higher than the production price of the worst soil. In this case, it is the absolute rent that generates the monopoly price. In the case of the monopoly price itself, the opposite is true, it is the monopoly that generates the rent:

“It must be distinguished, [1] whether the rent springs from a monopoly price, because a monopoly price of the product or the land exists independently of it, or [2] whether the products are sold at a monopoly price, because a rent exists. (…) Here, then, the monopoly price creates the rent. On the other hand, the rent would create a monopoly price if grain were sold not merely above its price of production, but also above its value, owing to the limits set by landed property to the investment of capital in uncultivated land without payment of rent.” ⁹⁷

The imperialist maximum profit fits precisely in this case: it is a rent generated by the monopoly price and not generated by the remuneration of the worst soil. Imperialism’s maximum profit is rent generated by monopoly price; This monopoly price in turn is ensured by monopolistic control of production and by violence in inter-imperialist competition and, mainly, by the national subjugation of oppressed countries. Does the monopoly price typical of imperialism and the rent it provides constitute a violation of the law of value? In other words, is it possible to obtain a consistent rent from the monopoly price, from selling commodities at a price above their value? Yes, it is possible for this to happen, without violating the law of value; Let’s see how Marx deals with the issue:

“Finally, if equalization of surplus value into average profit meets with obstacles in the various spheres of production in the form of artificial or natural monopolies, and particularly monopoly in landed property, so that a monopoly price becomes possible, which rises above the price of production and above the value of the commodities affected by such a monopoly, then the limits imposed by the value of the commodities would not thereby be removed. The monopoly price of certain commodities would merely transfer a portion of the profit of the other commodity producers to the commodities having the monopoly price. A local disturbance in the distribution of the surplus value among the various spheres of production would indirectly take place, but it would leave the limit of this surplus value itself unaltered. Should the commodity having the monopoly price enter into the necessary consumption of the laborer, it would increase the wage and thereby reduce the surplus value, assuming the laborer receives the value of his labor power as before. It could depress wages below the value of labor power, but only to the extent that the former exceeds the limit of their physical minimum. In this case the monopoly price would be paid by a deduction from real wages (i. e., the quantity of use values received by the laborer for the same quantity of labor) and from the profit of the other capitalists. The limits within which the monopoly price would affect the normal regulation of the prices of commodities would be firmly fixed and accurately calculable.” ⁹⁸

Marx provides us with a brilliant analysis of the global functioning of monopoly price, very important for a deeper understanding of imperialism. The monopoly price, the sale of a commodity at a price above its value, or its production price, does not allow for greater generation of wealth, an additional production of surplus value. What the monopoly price allows is a greater concentration of wealth for those capitals that control the production of commodities that can be sold at this price. The realization of the monopoly price of a commodity occurs at the expense of the profits of other capitalists and the greater exploitation of the proletariat. In the world market, therefore, it is not possible for all commodities to be sold at a monopoly price, but as this price ensures the rent that constitutes maximum profit, it is easy to conclude that the commodities produced by finance capital are those that are able to impose the monopoly price as its market price. A particular form of inter-imperialist competition is the dispute over production and market conditions that ensure the monopoly price.

But how does ground rent behave in this distribution of surplus value altered by the monopoly price? Let us start once again from Marx’s considerations on the issue:

“Profit of capital (profit of enterprise plus interest) and ground rent are thus no more than particular components of surplus value, categories by which surplus value is differentiated depending on whether it falls to the share of capital or landed property, headings which in no whit however alter its nature. Added together, these form the sum of social surplus value.” ⁹⁹

The total social surplus value can be divided into two parts: profit of capital and ground rent. Surplus value can only be created in the productive process, ground rent does not form the value of commodities, as Smith’s theory of value supposed, it is a portion of the surplus value extracted by landed proprietors from capitalists after the productive process has concluded. Ground rent does not generate value, it absorbs value. Only as negative rent, that is, as unrealized ground rent, it enables the creation of a greater amount of social surplus value. Imperialism acts to suppress and annul the ground rent of oppressed nations and their peasants; on the other hand, it seeks to increase it artificially when it becomes a monopolist, as in Lenin’s examples of the sugar and cement cartel. What is always at stake is the total surplus value produced by society, which cannot be increased by the monopoly price, but can be redistributed differently, which implies the existence of different rates of profit: monopoly profit and non-monopolistic profit.

In his analysis of average profit, Marx demonstrates that the surplus value produced directly in agriculture does not participate in forming the general rate of profit. This is because the surplus value produced in agriculture, when used to pay absolute ground rent to rural landed proprietors, does not constitute the social surplus value to be shared between the different branches of industry. As seen, Marx assumes that all the surplus value produced in agriculture is retained by land owners in the form of ground rent, thus not allowing the surplus value produced in agriculture to be distributed to other capitals. In the imperialist phase of capitalism, this principle discovered by Marx remains valid, as the surplus value produced in agriculture in fact continues without composing the general rate of profit. From the colonial/semi-colonial rule of Finance capital, it is able to appropriate part of this surplus value that in free competition capitalism would belong to land owners. However, finance capital appropriates part of this surplus value not for the benefit of the general rate of profit, but for the imperialist maximum profit.

In relation to monopoly rent, that is, that rent generated by the monopoly price, as is the typical case of imperialist maximum profit, Marx analyzes it as follows:

“Even monopoly rent (…) it is at least part of the surplus value of other commodities, i. e., of commodities which are exchanged for this commodity having a monopoly price. The sum of average profit plus ground rent can never be greater than the magnitude of which they are components and which exists before this division.” ¹⁰⁰

The sum of profit of capital and ground rent form the totality of social surplus value produced by society. Under the conditions of free competition capitalism, where the law of average profit governs, total ground rent will be the result of subtracting the total surplus value from the global average profit. In the era of imperialism, the profit of finance capital needs to seize the ground rent of oppressed nations to become maximum profit. The imperialist bourgeoisie thus realize, in the lands of the semi-colonies, its project of suppressing private property of land. However, it suppresses private property over the natural forces of oppressed nations not for social progress but rather for colonial enslavement for maximum profit. When it controls all primary production in semi-colonies, the imperialist bourgeoisie artificially increases ground rent, which becomes monopolistic and not typically capitalist. It does so not for the benefit of the nation from which natural wealth is extracted, but for the benefit of its gigantic capitalist accumulation.

In this way, finance capital seeks to artificially increase ground rent from primary production under its control, aiming not to reduce the profit of its own capital but, rather, to reduce that of its competitors; subtracting from them part of the previously appropriated surplus value. In this game of forces of finance capital, the rentier and parasitic content of imperialism is reinforced, which seeks to increase the price of primary products by earning monopoly ground rent as a component of its maximum profit. Of course, this finds a limit in capitalist production itself, as the disproportionate increase in the price of raw materials and food implies a reduction in the rate of surplus value and the rate of profit by increasing the value of labor power with it. But it is under these conditions that the phenomena of competition among the big capital occur in the epoch of imperialism.

The phenomenon of the suppression of ground rent in semi-colonial countries on the world market was extensively studied in the 1950s. The process characterized by Chairman Mao as an “exchange of unequal values”, ¹⁰¹ in the exploitative relationship between imperialism and the Chinese peasantry, was not a local process, but with global scope. Numerous statistical data collected at that time proved the imposition of a monopolized international price for industrialized production by finance capital. This monopoly price, as we have seen, implied a greater profit of capital that was compensated by the reduction in ground rent that would correspond to the primary products of the oppressed nations. This is the economic cause that explains the monopoly price of manufactured commodities and the deficit in the prices of primary products.

After the 1970s, an opposite phenomenon was observed, but in which the same essence was preserved: there was a significant increase in the price of primary products. This implied a greater realization of ground rent in these commodities, particularly in oil. Initially, it causes a problem for imperialism, as it tends to reduce the profits of finance capital. But this is circumvented by imperialism as it gradually assumes, through the intertwining of finance capital, the economic, political and military control of these sources of raw materials. The strengthening of the state of Israel, as a gendarme of Yankee imperialism in the Middle East, is part of this policy of controlling the oil sources of the region, as well as the intertwining of the USA with the Saudi monarchy. This condition only reinforces the importance of the advance of the Heroic Palestinian National Resistance for the world proletarian revolution.

This way, Yankee imperialism, with its capital exported to oil-producing countries, earns additional profits when the price of oil is high; on the other hand, it loses profit to the extent that the monopoly price of oil implies a reduction in the profit of capital. Today, Yankee imperialism is a major oil producer, but oil extraction in Yankee territory takes place through drilling of bituminous shale rocks. This is the worst soil for oil production, as it has the lowest economic fertility. For Yankee producers to make a profit, the market price must rise until they achieve absolute rent, in addition to a sumptuous profit. That is why the oil being above US$50 per barrel is in the interest of Yankee imperialism. However, as an industrialized economy, whose capital controls large sectors of industrial production, they are not interested in the price rising much above this level, unlike the atomic superpower Russia, whose industrialization is smaller and the most fertile oil sources benefit from the artificial increase in the price of oil. For Yankee imperialism, as it is the worst soil, it is essential to remove more fertile sources controlled by capital from different powers from competition. Through war and embargo policy, it restricts as much as possible the participation of Iran and Venezuela in the global crude oil market, for example. This military control, economically artificial, is essential for Yankee imperialism to ensure maximum profit for its corporations. At the core of this issue is the particular behavior of ground rent during the era of imperialism.

The same issue can be said in relation to soybean. The USA and Brazil are today the two largest soybean producers in the world, most of which is appropriated by China. Although there is a lot of Yankee capital exported for this production in our country, Brazilian soybeans producers also appear as competitors to Yankee soybeans. Of course, it is completely disproportionate competition, as most of the soybean produced in Brazil depends on seeds, pesticides and machinery produced in the USA; in a way that the growth of soybean production here directly benefits the economy of the imperialist superpower. However, as soybean production in Brazil grows significantly, there is a tendency to reduce the market price, a situation that would directly benefit Chinese imperialism, but which would on the other hand harm the finance capital invested in Yankee soybeans. With the process of the war in Ukraine, the invasion by the atomic superpower Russia of Ukrainian territory, the production price of agricultural inputs rose, increasing the cost price of soybeans produced both in the USA and in Brazil. Here, however, the impact was different, as the expansion of soybean planting to the Amazon region provided a relative advantage over competition from Yankee soybeans. With new land from the felled forest, fewer inputs were consumed to produce a greater quantity of soybeans per hectare. Due to this tendency, the state of Mato Grosso, in its Amazon area, quickly became the largest soybean producer in the country, surpassing the state of Paraná. This high fertility allowed a greater increase in Brazilian soybeans in purchases from the Yankees. One of the ways for US imperialism to limit this competition is the intensification of its environmental policy, monitoring the deforestation of the Amazon Forest and the Cerrado region, aiming not at conserving the natural environment and our national wealth, but rather ensuring that the best soils are expelled from the market, thus ensuring maximum profit for their finance capital invested in the production of Yankee soybeans.

Phenomena of artificial increase in ground rent can also be observed in Europe. The European Agreement of Agriculture (AoA), for example, establishes the number of hectares that must be produced in each country, as well as what will be produced. The soils forced out of competition receives ground rent paid by the European Union and are paid to produce nothing. This artificial way of limiting competition aims to ensure a higher market price for French wine, for example. It is, therefore, an imperialist policy for manipulating ground rent in order to obtain maximum profit. In this case, also aiming social control. Because, the taxation imposed by the European Union on milk from Uruguay, for example, aims to artificially conserve the ground rent of small milk producers on the European continent. What European society pays extra for their food ensures this artificial form of rent from small production. This is a way for European imperialism to keep continent’s peasantry under its control and corporatize them, which in the 1990s showed important displays of fighting and organizational capacity. This phenomenon was studied by Lenin and is analogous to that of the labor aristocracy:

“In addition, a specific feature of Danish imperialism is the super-profits it obtains from its monopolistically advantageous position in the meat and dairy produce market: using cheap maritime transport, she supplies the world’s biggest market, London. As a result, the Danish bourgeoisie and the rich Danish peasants (bourgeois of the purest type, in spite of the fables of the Russian Narodniks) have become ‘prosperous’ satellites of the British imperialist bourgeoisie, sharing their particularly easy and particularly fat profits.” ¹⁰²

This phenomenon of a peasant aristocracy in imperialist countries is another by-product of this particular stage of capitalism. It is important to be studied, as its existence today shows that despite being partially paralyzed, this class, as the crisis of imperialism deepens, could constitute an important force alongside the proletariat in the Socialist Revolutions in imperialist countries. Thus, as the worker aristocracy cannot be maintained for long, the same will happen with this peasant aristocracy.

The study of imperialism and the Marxist theory of ground rent allows us to understand in a deeper way the current phenomena and the perspectives of the World Proletarian Revolution. Mastering this Marxist arsenal of political economy is key to understanding the relationship between the fundamental contradictions in the world today and why the contradiction between oppressed nations and imperialism constitutes the principal contradiction of the epoch.

3- The principal contradiction of the monopolistic stage of the capitalist process

The two-line struggle that went through the ICM in 2022, impulsed by the publication of the Bases for Discussion proposed by the parties and organizations that were members the then CUMIC, focused particularly on the question of the fundamental contradictions in the world and which of these constitutes the principal contradiction today. The struggle should rightly focus on this point, because its correct delimitation is essential for the establishment of a common Political Line for the ICM, which would allow it to unify. Important two-line struggles also took place on this issue during the UMIC itself and, as a result of this struggle, the Political Declaration and the Principles of the ICL established that:

“The whole process of the capitalist society has the contradiction between the proletariat and the bourgeoisie as the fundamental contradiction. Yet, three fundamental contradictions are developed in the world when it transits from non-monopoly capitalism into monopoly capitalism – or imperialism:

First contradiction: between oppressed nations, on the one hand, and imperialist superpowers and powers on the other. This is the principal contradiction in the current moment and the principal contradiction of the epoch of imperialism at the same time.

Second contradiction: between proletariat and bourgeoisie.

Third contradiction: inter-imperialist” ¹⁰³

This definition constitutes an important political leap in the line of the ICM, as it develops what the CPC established in the Chinese Letter from 1963, as well as rectifies important errors and deviations in the 1984 RIM Declaration, which the PCP had already pointed out in the 1980s. Continuing the debate and struggle around this issue is important for raising the ICM’s understanding on the foundations of its General Political Line. Our Party assess that the debate in 2022 was fruitful, as it served to clarify many issues. As part of the ongoing two-line struggle in the ICM after the founding of the ICL, we are also publicly expressing our views on this question, approaching it from two perspectives, one philosophical and the other economic and political. Before analyzing this key question of the ICM from these two aspects, we will briefly look back at the development of formulations on this issue in the course of the development of the ideology of the international proletariat. In this way, we aim to rebut the terminological prevarications made by the UOC (MLM) in last year’s debates.

By studying the economic essence of capitalist society, Marx masterfully established the economic foundations of the contradiction between the proletariat and the bourgeoisie. In Anti-Dühring, Engels completes this formulation, presenting it in its most developed form. In Socialism Utopian and Scientific, the formulation becomes even more precise, as Engels already incorporates the emerging elements of monopoly capital into his analysis of the genesis, development and resolution of the contradiction. He highlights the transformation of free competition into monopoly as follows:

“At a further stage of evolution, this form also becomes insufficient. The producers on a large scale in a particular branch of an industry in a particular country unite in a “Trust”, a union for the purpose of regulating production. They determine the total amount to be produced, parcel it out among themselves, and thus enforce the selling price fixed beforehand. (…) In the trusts, freedom of competition changes into its very opposite — into monopoly; and the production without any definite plan of capitalistic society capitulates to the production upon a definite plan of the invading socialistic society. Certainly, this is so far still to the benefit and advantage of the capitalists.” ¹⁰⁴

And he summarizes the fundamental contradiction and its manifestations as follows:

“Production has become a social act. Exchange and appropriation continue to be individual acts, the acts of individuals. The social product is appropriated by the individual capitalist. Fundamental contradiction, whence arise all the contradictions in which our present-day society moves, and which modern industry brings to light.

A) (…) Antagonism between the proletariat and the bourgeoisie.

B) (…) Contradiction between socialized organization in the individual factory and social anarchy in the production as a whole.

C) (…) unheard-of development of the productive forces, excess of supply over demand, overproduction, glutting of markets, crises every ten years, vicious circle: here, superabundance (…) The contradiction has grown into an absurdity: the mode of production rebels against the form of exchange. The bourgeoisie is convicted of incapacity to manage its own social productive forces any further. (…)

D) Partial recognition of the social character of the productive forces forced upon the capitalists themselves. Taking over of the great institutions for production and communication, first by joint-stock companies, later in by trusts, then by the State.” ¹⁰⁵

Developing the formulation in Anti-Dühring, Engels then demonstrates that the constitution of private and state monopolies in capitalism corresponds to the obligatory partial recognition of the social character of the productive forces, but not the resolution of this contradiction. When Chairman Mao, in On Contradiction, summarizes Marxist discoveries in social sciences, he departs precisely from this formulation by Engels, and establishes the issue as follows:

“When Marx applied this law [of contradiction] to the study of the economic structure of capitalist society, he discovered that the basic contradiction of this society is the contradiction between the social character of production and the private character of ownership. This contradiction manifests itself in the contradiction between the organized character of production in individual enterprises and the anarchic character of production in society as a whole. In terms of class relations, it manifests itself in the contradiction between the bourgeoisie and the proletariat.” ¹⁰⁶

In other words, the economic foundation of the social contradiction between the proletariat and the bourgeoisie is the contradiction between social production and capitalist private appropriation. In turn, as the economic basis is not restricted to the sphere of production, the fundamental contradiction manifests itself as a reflection of the sphere of circulation, that is, of free competition over production, as the contradiction between the organized character of production in individual enterprises and the anarchic character of social production. Enhancing Engels’ formulation, Chairman Mao presents the same fundamental contradiction in its different manifestations: political and economic (production and circulation). Both are dealing with the same issue, so much so that Engels summarizes the proletarian revolution as follows:

“Proletarian Revolution — Solution of the contradictions. The proletariat seizes the public power, and by means of this transforms the socialized means of production (…) into public property. (…) Socialized production upon a predetermined plan becomes henceforth possible. The development of production makes the existence of different classes of society thenceforth an anachronism. In proportion as anarchy in social production vanishes, the political authority of the State dies out. Man, at last the master of his own form of social organization, becomes at the same time the lord over Nature, his own master — free.” ¹⁰⁷

The resolution of the contradiction between the proletariat and the bourgeoisie, in its political aspect, begins with the seizure of power by the proletariat and, in the economic aspect, the socialization of the means of production and the planning of production, now totally socialized. This set of measures transforms social classes into an anachronism and the state gradually becomes extinct, losing its functions part by part until it is completely extinguished with the disappearance of the vestiges of classes, culminating the proletarian revolution with communism. Chairman Mao improves and simplifies Engels’ formulation, showing one single social contradiction in its different manifestations, economic and political. The content of the formulation, however, is the same.

Something similar takes place regarding the formulation of Stalin on the most important contradictions in the imperialist stage. Stalin, also departing from the same formulation of Engels, analyzes the most important contradictions in the imperialist epoch as follows:

“Lenin called imperialism ‘moribund capitalism.’ Why? Because imperialism carries the contradictions of capitalism to their last bounds, to the extreme limit, beyond which revolution begins. Of these contradictions, there are three which must be regarded as the most important. The first contradiction is the contradiction between labor and capital. (…)

The second contradiction is the contradiction among the various financial groups and imperialist Powers in their struggle for sources of raw materials, for foreign territory. (…)

The third contradiction is the contradiction between the handful of ruling, “civilized” nations and the hundreds of millions of the colonial and dependent peoples of the world. (…)

Such, in general, are the principal contradictions of imperialism which have converted the old, “flourishing” capitalism into moribund capitalism.” ¹⁰⁸

Chairman Mao, referring precisely to this passage, states that:

“When Stalin explained the historical roots of Leninism in his famous work, The Foundations of Leninism, (…) analyzed those contradictions of capitalism which reached their culmination under imperialism, and showed how these contradictions made proletarian revolution a matter for immediate action and created favorable conditions for a direct onslaught on capitalism.” ¹⁰⁹

Chairman Mao could not repeat the same term used by Stalin, the principal contradictions of imperialism, precisely because in On Contradiction he was formulating for the first time in the history of Marxism that in any complex process, where there are many contradictions, at a given stage there will always be only one principal contradiction. In The Foundations of Leninism, Stalin is not dealing with this philosophical question, which is why he uses most important contradictions and principal contradictions as synonyms. After the qualitative leap in Marxist philosophy established by Chairman Mao, it is clear that these terms can no longer be used synonymously. With regard to the political and social content, there is no difference between Stalin’s and Chairman Mao’s formulation on this question, however, there is an important improvement in the formulation on the contradictions of the imperialist epoch, such improvement corresponds to the development in philosophy achieved in the third stage of Marxism. In other words, when dealing with a phenomenon and identifying its contradictions, it is necessary to establish which are the fundamental contradictions and, of these, which is the principal one at each stage of the process of transformation of that phenomenon.

That is why, in the Chinese Letter, the CPC presents the contradictions of the imperialist era as follows:

“In defining the general line of the international communist movement, the starting point is the concrete class analysis of world politics and economics as a whole and of actual world conditions, that is to say, of the fundamental contradictions in the contemporary world. (…)

What are the fundamental contradictions in the contemporary world? Marxist-Leninists consistently hold that they are:

– the contradiction between the socialist camp and the imperialist camp;

– the contradiction between the proletariat and the bourgeoisie in the capitalist countries;

– the contradiction between the oppressed nations and imperialism; and

– the contradictions among imperialist countries and among monopoly capitalist groups.” ¹¹⁰

Chairman Mao, when referring to the development of the Chinese Revolution, also uses the term fundamental (basic) contradictions to characterize the process:

“The contradiction between imperialism and the Chinese nation and the contradiction between feudalism and the great masses of the people are the basic contradictions in modern Chinese society. (…) But the contradiction between imperialism and the Chinese nation is the principal one.” ¹¹¹

This improvement in the nomenclature of concepts made by Chairman Mao corresponds to the philosophical development of the Maoist stage in relation to both Engels and Stalin. It doesn’t make sense, therefore, to continue using terms that were not wrong when they were used, but have become outdated with the development of the ideology. We should therefore unify the concepts and, instead of the most important contradictions, adopt fundamental contradictions and highlight the principal contradiction among them. To waste too much time on this question, as the leadership of the UOC (MLM) does, is to reduce the philosophical debate to a question of semantics that muddles the issue in order to confuse – above all – themselves. Aiming to respond to PCC-FR, they criticize it for “abandoning the idea of the most important contradictions in order to embrace that of fundamental contradictions”. And the UOC (MLM) even finds this “error” in the document of the CPC:

“Going back to the problem of the fundamental contradiction, doubtlessly the ‘Letter in 25 points’ or the ‘Chinese Letter’ from 1963 incurs in an imprecision when putting forward four fundamental contradictions.” ¹¹²

The leadership of the UOC (MLM) says that those of us who make up the ICL cling to “the 1963 General Line as if it were the tablets of Moses”. What we are doing is taking it as the most advanced formulation of the General Line of the ICM in the period of Chairman Mao, and we are trying to apply it to the new conditions. At the same time, we identify limits in this very important document, such as the lack of specification of what was the principal contradiction in the world. In the same way, we recognize the positive aspect of the 1984 RIM Conference, but we principally criticize the ideological and political errors in its Declaration, an expression of the rotten Avakianist theses, so applauded by the UOC (MLM). In this Declaration, the question of the fundamental contradiction is formulated as follows:

“All the major contradictions of the world imperialist system are rapidly accentuating: the contradiction between various imperialist powers, the contradiction between imperialism and the oppressed peoples and nations, and the contradiction between the bourgeoisie and the proletariat in the imperialist countries. All of these contradictions have a common origin in the capitalist mode of production and its fundamental contradiction. The rivalry between the two blocs of imperialist powers led by the US and the USSR respectively is bound to lead to war unless revolution prevents it and this rivalry is greatly affecting world events.” ¹¹³

The big mistake implicit in this formulation is that it contains one of the dogmas of Avakianism: the inter-imperialist contradiction is the motive force of history. This is why it is listed as the first contradiction and highlighted at the end as the contradiction that will greatly influence world events. Another error, which our Party believes needs to be corrected, is the characterization today of the contradiction between the proletariat and the bourgeoisie as being restricted to the imperialist countries. After all, already at the beginning of imperialism, as Stalin shows in Foundations of Leninism, this contradiction becomes international, in force in all countries of the world, regardless of the percentage of workers in the population of an oppressed nation.

With regards to the Letter in 25 points, we believe that there are two inaccuracies in it, resulting from the weight of the right wing in the leadership of the CPC before the GPCR. The first inaccuracy, already mentioned above, is that four fundamental contradictions are presented, but the principal one is not specified among them. After all, according to the law of contradiction fully established by Chairman Mao, since the world in the imperialist era is a complex process in which there are several contradictions, one of them is the principal contradiction. In this case it is, as Chairman Mao always said, the contradiction between nation and imperialism, based on the formulation of the great Lenin that in the epoch of imperialism the world was divided between a handful of advanced nations, powers, on the one hand, and the vast majority of backward nations, on the other.

The second inaccuracy lies in the characterization of the contradiction between the proletariat and the bourgeoisie only in capitalist countries; this coincides, in part, with the position of Liu Shao-chi, who defended the farcical theory of the end of the contradiction between the proletariat and the bourgeoisie in socialism. These two errors were rectified by the CPC in the preparatory debates and resolutions of its 9th Congress in 1969. The Political Declaration and the Principles approved at the UMIC corrects all these issues and therefore constitutes the most developed formulation of the Marxist-Leninist-Maoists for the ICM.

3.1- The philosophical aspect of the problem

Having clarified the content of the issue and demonstrated the biblical misrepresentation of it by the leadership of UOC (MLM), let’s take a deeper look at its philosophical aspect. There are two important philosophical problems in this debate: 1) the dialectical relationship between the universality and particularity of contradiction, and 2) the question of the principal contradiction in a process and in the stages of this process. These two problems are part of the law of contradiction and have already been sufficiently clarified by Chairman Mao. Its resolution, therefore, can be directly found in On Contradiction itself.

Let’s start with the first problem:

In his formulation of the law of contradiction, Chairman Mao highlights the need to study the universality and particularity of contradiction. He begins his presentation with the universality of contradiction, as it is the simplest aspect, and defines that the universality or absolute character of contradiction consists of the fact that contradiction exists in the process of all things and phenomena and that its existence runs from the beginning to the end of every process. He thus shows that, at the beginning of a phenomenon, even if the struggle between opposites is not apparent, contradiction is already present. Furthermore, he demonstrates that “the universality of contradiction” “resides in the particularity of contradiction”, already establishing the dialectical, contradictory relationship between the universal and the particular.

After this definition, he begins “the special analysis of the particularity” of contradiction. This is a special analysis because particularity is more complex than universality, and harder for dogmatic thinking to understand. It shows that different forms of movement of matter each have a particular character. That in the study of contradiction, it is necessary to take what is common between a certain form of movement of matter and other qualitatively distinct forms and, specially, it is necessary to examine what is particular about the form of movement being studied. The common element between different forms of movement constitutes the universal aspect; what is distinct in each form of movement constitutes its particular trait or aspect.

It shows how the different sciences, due to studying different forms of movement of matter, deal with different particular contradictions and points out that in the social sciences the particular contradiction lies in how the contradiction between productive forces and relations of production manifests itself. He reveals, however, that in every form of movement of matter there are different processes that are qualitatively different in relation to the others and that, therefore, it is not enough to study only the particular contradiction of a large system of forms of movement of matter, that it is necessary to study ” (…) the particular contradiction and the essence of each process” ¹¹⁴ in this form of movement. In order to discover the particularity of the contradictions in the process of development of a thing or phenomenon, in other words, the essence of this process, he emphasizes the need to study “the particularity of each one of the aspects of each contradiction.”

Finally, he emphasizes that it is not enough to study the particular contradictions of a process and the opposing aspects of each of the contradictions of this process; in studying the particularity of the contradiction, it is also necessary to study the particular features of each one of the stages of the process of development of a thing:

“Not only does the whole process of the movement of opposites in the development of a thing, both in their interconnections and in each of the aspects, have particular features to which we must give attention, but each stage in the process has its particular features to which we must give attention too.” ¹¹⁵

He concludes by affirming that “(…) The fundamental contradiction in the process of development of a thing” and the essence of this process do not disappear as long as the process is not completed. He points out, however, that in a given process “conditions usually differ at each stage”, although this does not mean that the fundamental contradiction of the process is altered in the course of these stages. In other words, in the course of the development of one same process, when stages occur, each one of them will have particular traits, which do not imply a change in the essence of this process.

In short, in his study on the particularity of the contradiction, Chairman Mao departs from the forms of movement of matter, moves on to the different processes that exist within a given form of movement of matter, until reaching the different stages of the development process of a thing. This is where the dialectical relationship between the universality and the particularity of the contradiction is already present: the common characteristics of different forms of movement of matter constitute the universal aspect, while the distinctive features constitute the particularity of each form. Considering one same form of movement, each process has particular contradictions, while what is common to these processes constitutes their universality. If we take a single process of development of a thing separately, the particular contradiction that distinguishes it from other processes becomes the universal aspect of this particular process, while the specific characteristics of each stage constitute the particularity of one stage in relation to another stage.

After philosophically studying this dialectical movement from the universal to the particular, Chairman Mao illustrates this process with examples from social science, discovered by Marxism. He thus shows that Marx and Engels, in studying society as a specific form of movement of matter, discovered the contradiction between the productive forces and the relations of production, the contradiction between the exploited and exploiting classes and, stemming from these, the contradiction between the economic base and the superstructure. In applying the law of contradiction to the study of a specific process within this form of movement, that is, capitalist society, points out that Marx discovered the fundamental contradiction in this society between the social character of production and the private character of property – as seen in the previous topic. He thus describes the dialectical relationship between the universal and the particular present in Marxist discoveries:

“Because the range of things is vast and there is no limit to their development, what is universal in one context becomes particular in another. Conversely, what is particular in one context becomes universal in another. The contradiction in the capitalist system between the social character of production and the private ownership of the means of production is common to all countries where capitalism exists and develops; as far as capitalism is concerned, this constitutes the universality of contradiction. But this contradiction of capitalism belongs only to a certain historical stage in the general development of class society; as far as the contradiction between the productive forces and the relations of production in class society as a whole is concerned, it constitutes the particularity of contradiction.” ¹¹⁶

What is universal in one context is particular in another, and vice versa. This is the essence of the dialectical relationship between universality and particularity: both are interdependent, opposed and, in certain circumstances, transform into each other. The contradiction between social production and private appropriation, for example, when capitalist society is taken as a process, constitutes the universal aspect of this process. However, when it is class society that is taken as a process and capitalist society as a stage in this process, the contradiction between social production and private appropriation constitutes the particular aspect in capitalist society of the contradiction between productive forces and relations of production. In this passage, therefore, we can see the dialectical relationship between process and stage handled by Chairman Mao. When taking class society as a whole, capitalist society is a stage in this process; in turn, if capitalist society is taken as a process, imperialism is a particular stage in this process. And Chairman Mao concludes the chapter on the particularity of contradiction by giving us the example of Comrade Stalin’s analysis of the particular contradictions of the imperialist stage of the capitalist process. He states that:

“Since the particular is united with the universal and since the universality as well as the particularity of contradiction is inherent in everything, universality residing in particularity, we should, when studying an object, try to discover both the particular and the universal and their interconnection, to discover both particularity and universality and also their interconnection within the object itself, and to discover the interconnections of this object with the many objects outside it. When Stalin explained the historical roots of Leninism (…) analyzed those contradictions of capitalism which reached their culmination under imperialism (…) What is more, he analyzed the reasons why Russia became the cradle of Leninism, why tsarist Russia became the focus of all the contradictions of imperialism, and why it was possible for the Russian proletariat to become the vanguard of the international revolutionary proletariat.” ¹¹⁷

This example brings together three levels, the philosophical understanding of which is key to firmly advancing the ICM’s common understanding of the contradictions in the world: the universal, the particular and the specific; in other words, capitalism as a process, imperialism as a stage in this process and the manifestation of the particular contradictions of imperialism in a specific country, in this case Russia. Thus, we have a double relationship between the universal and the particular: firstly, the particular contradictions of imperialism in relation to the universal capitalist process; and secondly, the universal contradictions, common to the whole world in the imperialist era, and their particular manifestation in a singular country. Because of Stalin’s handling of the dialectical relationship between the universal and the particular, Chairman Mao states:

“Thus, Stalin analyzed the universality of contradiction in imperialism, showing why Leninism is the Marxism of the era of imperialism and proletarian revolution, and at the same time analyzed the particularity of tsarist Russian imperialism within this general contradiction, showing why Russia became the birthplace of the theory and tactics of proletarian revolution and how the universality of contradiction is contained in this particularity. Stalin’s analysis provides us with a model for understanding the particularity and the universality of contradiction and their interconnection.” ¹¹⁸

The particular contradictions of a stage cannot suppress the particular contradiction of a process, because if the particular contradiction of the process were eliminated in a stage, it would no longer be a stage of a process, but a new process. However, there will only be a change of stage in the same process if there are different particular contradictions between one stage and another. Otherwise, there would be no stages in the process, just a mechanical growth of the same contradictions. Chairman Mao shows how, by aggravating the fundamental contradiction of the process, certain contradictions are deepened, others are resolved and new contradictions emerge. It is this modification of particular features in the course of the process of development of a thing that marks the emergence of a new stage, or the overcoming of an old one.

In the public debate last year, in the criticism of the definition of the principal contradiction in the world, the argument was raised that pointing out one principal contradiction in the world could lead revolutionary parties and organizations to mechanically and immediately identify the principal contradiction in the world with the principal contradiction in their country. Although this argument demonstrated a lack of understanding of the law of contradiction, it did bear certain meaning as a warning, since in the past, particularly in the 1960s and 1970s, there was a tendency for Maoist parties and forces to mistakenly identify the principal contradiction of their revolution with the principal contradiction of the epoch, that is, between oppressed nations and imperialism. Even in the history of the Communist Party of Brazil, this error occurred: the different Maoist fractions existing in the Brazilian revolutionary process in that period characterized the fascist military coup of 1964 as a direct intervention by Yankee imperialism, and thus erroneously defined the country’s principal contradiction as that between the nation and imperialism. This underestimated the fact that the principal contradiction in Brazilian society was the one between the poor peasantry and the latifundium, which expressed itself as a contradiction between the masses and semi-feudality, manifesting itself in an acute and massive peasant struggle. There were very significant efforts and results from the Maoist intervention in the countryside during that period, most notably the heroic Araguaia Guerrilla, the first attempt to unleash the People’s War in our country. However, the error in this understanding of the principal contradiction in society and of the Brazilian revolution, opened up gaps for the detour from the path of the People’s War towards revisionism, after the military defeat of that important initiative. This resulted in great ideological damage to the Party, with its almost complete liquidation.

What is necessary to avoid repeating this mistake is to improve the Communist Parties’ understanding and handling of the law of contradiction. It is necessary to grasp more deeply the dialectical relationship between the universal and the particular, in order to understand that, in the imperialist stage, particular contradictions are configured distinctively from the previous stage of free competition, while essential, universal, common characteristics are maintained. That these characteristics of imperialism, which are particular to the capitalist process as a whole, also constitute “the universal of the contradictions of imperialism”, and that this universal manifest itself in a particular way in each of the countries of the world. And that, therefore, the general line of the ICM can never replace the need to develop the political line of each revolution, which will have its particularities and specificities, as well as universal aspects common to all revolutionary processes around the world.

This brings us to the second philosophical problem we mentioned: the question of the principal contradiction in a process and in the stages of this process. Chairman Mao studies this in a separate chapter of On Contradiction, but he emphasizes that the question of the principal contradiction is part of the problem of the particularity of contradiction. He shows that in the process of development of a complex thing there are many contradictions and one of them is necessarily the principal one. This principal contradiction, in turn, is the contradiction “whose existence and development determine or influence the existence and development of the other contradictions.” ¹¹⁹

In illustrating the problem of the principal contradiction, Chairman Mao compares the complexity of revolutionary processes in imperialist countries with the Chinese revolution. He thus states that in revolutions in imperialist and developed capitalist countries “the two forces in contradiction, the proletariat and the bourgeoisie, form the principal contradiction”. ¹²⁰ In semi-colonial countries like China, he states, “the relationship between the principal contradiction and the non-principal contradictions presents a complicated picture.” ¹²¹ He shows that when imperialism unleashes a war of aggression against a semicolonial country, the different social classes can temporarily unite in a revolutionary national war:

“At such time the contradiction between imperialism and the country concerned becomes the principal contradiction, while all the contradictions among the various classes within the country (including what was the principal contradiction, between the feudal system and the great masses of the people) are temporarily relegated to a secondary and subordinate position.” ¹²²

As seen above, Chairman Mao considered in the 1930s that there were two fundamental contradictions in Chinese society: between the oppressed nation and imperialism; and between the feudal system and the popular masses. What he is now demonstrating is that, depending on the circumstances, these contradictory pairs can swap places and one take over the principality while the other becomes subordinate, and vice versa. The modification of the principal contradiction determines the modification of the stage of the Chinese Revolution, the CPC’s united front policy and the military strategy in the People’s War. Understanding the modification in the principal contradiction in a specific revolutionary process is decisive for its correct conduction.

In making this analysis of China’s revolutionary process, Chairman Mao puts forward a formulation that is key to the present polemic in the ICM:

“But whatever happens, there is no doubt at all that at every stage in the development of a process, there is only one principal contradiction which plays the leading role.” ¹²³

In other words, in the case of China, as long as there was no direct imperialist aggression, the principal contradiction at that stage of the Chinese Revolution was that which opposed the popular masses to the feudal system. It is this contradiction that determines the political and military line of the Party. In turn, when there is imperialist aggression, the principal contradiction changes and the new one starts to govern all the others, including the one that opposes the masses to feudality. That is why, at the time of the National Revolutionary War, Chairman Mao distinguished between landowners who supported the invading enemy and those who took part in the national resistance. Only pro-Japanese landowners were attacked by the Party during the period of the anti-Japanese national resistance war. In other words, the principal contradiction of that stage of the Chinese Revolution had changed from the principal contradiction of the previous stage. The process was the same: the Chinese Revolution; but the principal contradiction changed from one stage to the other, from agrarian to national, both part of the New Democratic Revolution.

Imperialism is the higher, last and particular stage of capitalism. Its particular features are governed by the sharpening of the fundamental contradiction of the capitalist process, which manifests itself in class relations as the antagonistic contradiction between the proletariat and the bourgeoisie. This contradiction is universal for the whole process, it will exist until the complete disappearance of the bourgeoisie and the other social classes – a task that will take place throughout the period of acute struggles in the transition to communism, as the historical experience of the dictatorship of the proletariat has already shown. However, in the course of the development of the capitalist process, at least three stages were shaped: its dawn, when it emerged as a mode of production subjugated by the feudal mode of production; its “flourishing”, in the stage of free competition; and its agony, in the imperialist stage. Throughout this long process, the contradiction between the proletariat and the bourgeoisie remained a particular and fundamental contradiction. It will continue in the transition period, socialism, but as a new and qualitatively different phenomenon, since the proletariat will become the dominant aspect and the bourgeoisie the dominated aspect of the contradiction. The experience of the dictatorship of the proletariat in China and Chairman Mao’s formulations show that this contradiction remains the principal contradiction throughout the process of socialist revolution until we reach communism. Becoming aware of this continuity is decisive in order to sustain the dictatorship of the proletariat, smash attempts at restoration and move towards the shining communism. Although this particular contradiction in the process continued and continues as a fundamental contradiction until the complete extinction of social classes, at each stage of this process a contradiction matures that becomes the principal one. A new stage only emerges in a given process when a new principal contradiction that determines the new particular characteristics of this new stage emerges. As seen above in the example of the modification of the principal contradiction and the emergence of new stages in the process of the Chinese Revolution.

There is therefore a full correspondence between the law of contradiction established by Chairman Mao and the definition contained in the ICL’s Political Declaration and the Principles that the contradiction between oppressed nations and imperialism corresponds to the principal contradiction of the entire imperialist stage. Dialectically, this delimitation is not only possible, but necessary. The fact that any of the other fundamental contradictions can become, depending on the conditions, the principal contradiction in the world, as in the case of a world inter-imperialist war, means that the imperialist stage is also subdivided into qualitatively different phases. Here again we find ourselves with the dialectic between the universal and the particular. Just as, by taking class society as a process, we can characterize capitalist society as a stage in this process, we can consider imperialism as a process whose different phases correspond to stages in its development. In this way, each phase in the stage is characterized by a change in the principal contradiction, but the principality tends to return to the principal contradiction that marks the stage of the process.

The fundamental contradiction of a process, therefore, is that particular contradiction that distinguishes it from other qualitatively different processes (capitalism and feudalism, for example). But when you take the stages of the same process, the fundamental contradiction will be the one that continues to govern the process as a whole, through the modification of the principal contradiction in the different stages of it (free competition and imperialism, for example). Every complex process is made up of countless contradictions, but what are the fundamental contradictions? They are the contradictions that shape the nature of the process and its stages or phases. Among the fundamental contradictions, one will be the principal one in the current stage and the others will be secondary.

We have seen that, philosophically, it is correct to identify the fundamental contradictions in the world today, in the imperialist stage. Furthermore, we have also seen that among these fundamental contradictions, depending on the circumstances, one will be the principal contradiction; that this does not negate the existence of a, particular, fundamental contradiction of the process. On the contrary, this is the way in which the universal contradiction manifests itself, because the universal can only exist concretely in the particular. At the same time, we have sought to demonstrate how each particular stage is also marked by a particular contradiction, or by the principal contradiction of the stage, that the change in this principal contradiction determines the overcoming of phases in the same stage. Finally, we saw that the existence of a principal contradiction in the world does not mean that the principal contradiction in all countries is the same.

The difficulty in understanding this complex relationship lies in grasping and handling the dialectical relationship between the universal and the particular, a decisive element of the law of contradiction formulated at a higher level by Chairman Mao. However, philosophy is not enough for us to correctly identify the fundamental contradictions in the world today and which of these is the principal contradiction of the imperialist stage. This is only possible, as the Letter in 25 points highlights, from a “concrete analysis of the classes, the world economy and politics”. This is what we will try to do next.

3.2- The economic and political aspect of the question

The immediate economic manifestation of the contradiction between the proletariat and the bourgeoisie, the fundamental social classes of the entire capitalist process, is brilliantly presented by Marx in his work Wages, Prices and Profits. In this work, the founder of the scientific ideology of the proletariat demonstrates that the immediate economic contradiction between the fundamental classes of capitalist society was to be found in the opposition between the worker’s wage and the bourgeoisie’s profit. When he made this presentation, addressed to the leadership of the First International, Marx had already fully formulated his theory of surplus value. Thus, he demonstrated on solid scientific grounds how the struggle to win wage raises implied an immediate reduction in capitalist profit. He thus refuted the misconceptions within the workers’ movement, which argued that any wage increase could be annulled by the subsequent rise in the price of the means of subsistence. Marx demonstrated that wages and profit make up two parts of the same unit: the new value added in the production process and that, therefore, increasing wages implies a reduction in profit. At the same time, Marx demonstrates in this same work how the struggle of the proletariat cannot be reduced to an increase in the value of labor power, to a “fair wage”. He shows that as long as wage labor exists, as long as the bourgeoisie owns the means of production, the proletariat will be a subjugated, exploited class and also pressed by competition with its own brothers for jobs, a mechanism through which the capitalist class manages to impose wage cuts and recover its profits.

In Capital and Anti-Dühring, Marx and Engels demonstrate that the background economic contradiction in capitalist society is that between social production and private appropriation. This contradiction cannot be resolved, even momentarily, by the struggle for wages; its resolution corresponds to the socialization of the means of production, a task that can only be accomplished, as Marx demonstrates, through the dictatorship of the proletariat. The immediate manifestation of this contradiction, however, is the continuous effort of the capitalists to reduce the value of labor power to its minimum, and often below it, in order to achieve an increase in the extraction of surplus value, which provides the bourgeoisie with its luxurious life and its gigantic accumulation of wealth. Surplus value is therefore the immediate economic basis of the contradiction between the proletariat and the bourgeoisie.

What, in turn, is the economic basis of the contradiction between oppressed nations and imperialism? As we saw earlier, when it comes to maximum profit, it is based on three pillars: 1) obtaining a higher rate of surplus value, to the extent that it is convenient and possible for it to exploit the proletariat of the oppressed nations to a more extreme degree than in the imperialist citadels; 2) restricting the profit of the non-monopolist bourgeoisie by imposing a minimum profit on it; and 3) the suppression or appropriation by finance capital of the ground rent from the primary products of the oppressed nations. The struggle of the proletariat in these countries for better wages is the immediate, just and necessary response to this super-exploitation. Imperialism is therefore interested in the maximum of violence, political control and the minimum of trade union freedom, in order to impose a wage below the value of labor power. The national bourgeoisie reacts to the restriction of its profits by demanding protective measures from the old state for the fragile, small and medium-sized national industry. As its production is, as a rule, subjugated to monopoly production, it has very precarious economic and political conditions to achieve these objectives.

The agro-exporting latifundia, due to receiving a high revenue from their production, maintain a stable alliance with imperialism, although they are always threatened by a crisis of overproduction and a generalized drop in international prices for their monoculture, and are at the mercy of the international financial oligarchy. With regard to national wealth, the oppressed nations struggle to ensure national control of this production and to guarantee a price policy that minimally guarantees the right to capitalist ground rent. As the ruling classes of these states are lackeys of imperialism, in general, this struggle for ground rent is reduced to bargaining for benefits, or for “modest amends”, as Lenin characterizes it.

The resolution of the contradiction between nation and imperialism, as well as the contradiction between the bourgeoisie and the proletariat, cannot be merely economic; no measure of consortium of oppressed countries, or of import substitution, can resolve this tendency to subjugation, of permanent super-exploitation of the proletariat of these countries, of the restriction of the profit of the national bourgeoisie, nor of the suppression of the ground rent of national resources. Only national liberation, the definitive conquest of political independence from imperialism, can ensure the achievement of these demands; and this political liberation can only be achieved through protracted people’s war in a revolution of new democracy uninterrupted to socialism, which builds from the outset a joint dictatorship of the revolutionary classes as a transit to the dictatorship of the proletariat.

The economic basis of the inter-imperialist contradiction is, first and foremost, the control of the highest possible part of the total surplus value produced worldwide. To this end, it is necessary to control the colonies/semi-colonies in order to monopolize the permanent super-exploitation of these proletarians, thus restricting the volume of the proletarian masses exploited by the financial capital of the rival powers. In addition, the control of the semi-colonies to suppress the ground rent of their primary products, thus reducing the costs of constant capital and allowing it to achieve maximum profit rates. By controlling certain sources of raw materials, by establishing a monopoly price on this primary production, it thus manages to reduce the surplus value of rival imperialist powers that are only buyers of these commodities. The way in which this contradiction is resolved are imperialist wars, which begin with aggression against oppressed nations controlled by rival powers, until they reach the point of direct confrontation between the powers themselves on their territories. This contradiction can only be eliminated by sweeping imperialism away from the face of the earth, because as long as there is imperialism there will be the inevitability of imperialist and inter-imperialist wars, and as an inseparable part of finance capital’s pursue for maximum profit.

Any one of these fundamental contradictions can become the principal one and thus determine the development of the other contradictions. However, in the imperialist stage, which of these contradictions plays the most dominant role among the others? From an economic point of view, answering this question requires us to depart from the particular form of formation of surplus value in the imperialist stage, which is maximum profit. The principal contradiction of the imperialist stage, therefore, is that which determines the development of the other contradictions aimed at achieving, maintaining and disputing the surplus value produced in the world in order to achieve the formation of maximum profit, will be the principal contradiction of the imperialist stage. Analyzing this question from an economic point of view helps to shed light on the relations of exploitation and production in the stage of monopoly capitalism; to understand the role of social classes, in general, and the necessary relationship between imperialism and bureaucratic capitalism, with a semi-feudal basis.

Since the suppression of capitalist ground rent is a necessity for the maximum profit of finance capital, imperialism has always been interested in maintaining a feudal or semi-feudal monopoly of land. This is the economic reason for the close ideological-political relationship between big landowners in oppressed countries and their masters in the imperialist powers. Whether for food production or the extraction of raw materials, the existence of large properties in semi-colonial countries is essential for the suppression of capitalist ground rent in semi-colonial countries. After all, it is much cheaper for financial capital to pay rent to a small class of parasitic large landowners, for the extraction of a country’s natural wealth, than to pay what would be capitalist ground rent for an entire nation. When the old state is the owner of these natural riches, it is generally satisfied with the payment of royalties by finance capital, which are always below what would be the rate of capitalist ground rent. The royalties paid by finance capital, whether to the big landowners or to the old bureaucratic state, are a semi-colonial ground rent and not a capitalist ground rent. The quantitative difference between the two is the surplus value retained by finance capital, which will make up its maximum profit.

The role that imperialism’s exploitative relations with the oppressed nations play in the production of maximum profit is similar to the exploitation of the poor people and masses of these countries by bureaucratic capitalism and semi-feudalism, Bureaucratic capital needs to reproduce the peasant economy, because the peasant produces for the internal market in exchange for a small rent, which in no way corresponds to the capitalist ground rent. Thus, even though peasant production has a much lower productivity than large-scale mechanized production, it often provides a cheaper food product. This is possible, not because small-scale production is more efficient than large-scale production, but because the subjugation of the peasantry and their permanently ruined production – because it is sold at prices below the cost – ensures these lower prices. In this way, bureaucratic capital indirectly exploits the peasantry, because the peasant, isolated on his plot, cannot cope with the monopolized capitalist internal market and is always forced to sell his production at the price they pay. The rent he receives is only enough to reproduce his ruined economy. In turn, this ruined production can only be maintained in these conditions by being surrounded on all sides by big properties. Otherwise, peasants would seek better conditions to grow and prosper. In this way, it is the latifundium system that ensures peasant oppression, their miserable condition and super-exploitation, in which they provide food for the domestic market without earning either rent or profit, as was the case with the Irish peasant analyzed by Marx. The yield earned by these peasants is not capitalist ground rent, but semi-feudal ground rent. This is the first economic reason why peasant production, although in constant ruin, is never completely eliminated under imperialism. However, there is another economic reason for this phenomenon. The reproduction of the peasant economy, ruined by large landed property, serves as a reserve labor force, always available for seasonal agricultural work; but, in addition, the countryside in semi-colonial countries always exports waves of workers to the cities from time to time, forced to submit to the worst conditions of exploitation in industry and the service sectors. The reproduction of the peasant economy thus plays a key role in constantly producing a relative overpopulation, which in turn is essential for the other factor of maximum profit: the permanent super-exploitation of the working class. In Brazil, the most exhausting jobs in the construction industry are usually carried out by peasants who have recently been expelled from the countryside. If this peasant economy is liquidated, this invaluable source of workers to be super-exploited is exhausted, those are generally the peasant regions of oppressed countries.

Latifundium, due to its semi-feudal condition, is the social agent of imperialism that ensures the suppression of the capitalist ground rent that would belong to the peasants – in the case of agricultural production – and to the nation – in the case of the natural wealth plundered by imperialism. Latifundium is indispensable for bureaucratic capitalism because it ensures revenues from the export of agricultural and mineral commodities, and, on the other hand, it ensures the cheap production of food for the internal market, by the peasantry, and the production of an excess overpopulation that migrates from the countryside to the city, thus ensuring the super-exploitation of the working class in the industries of the semi-colonies. In this way, latifundium contribute both to the monopoly profit of bureaucratic capital and to the maximum profit of financial capital; on the other hand, bureaucratic capital and financial capital provide the latifundium with all the military, political and legal security for the most atrocious crimes against the peasants and indigenous populations. They ensure the rent of this class of parasitic enemies of the people. This relationship of dependence between latifundia and bureaucratic capitalism; between bureaucratic capitalism and imperialism, is the basis of the system of exploitative relations that ensure imperialist maximum profit.

In turn, this alliance of reactionary classes, these three mountains (semi-feudalism, imperialism and bureaucratic capitalism) that weigh down on the masses of the countryside and the city of the oppressed countries, by super-exploiting the proletariat, the peasants, and the national wealth in that manner, has as its final product the endless masses of immigrants, who arrive year after year in the imperialist countries, to be super-exploited in all kinds of work. European industry would not survive without the masses of Turkish, Kurdish, Polish, Arab, African, and other immigrants; the service sector would not function without the masses from India, Bangladesh, Senegal, Vietnam, Ecuador, etc. In the same way, Yankee imperialism wouldn’t survive a day without the masses of Mexico, Colombia, Brazil, etc., who produce everything there. Bureaucratic capitalism, having latifundium as one of its foundations, is responsible for the production and export of this indispensable contingent for the imperialist production. This is a proletariat besieged by migratory policies and police persecution and forced to accept the conditions of super-exploitation in the metropolitan centers of the imperialist powers. It’s the third-worldization of the first world, as Chairman Gonzalo correctly analyzed.

The monopoly price, studied in the previous topic, is another important economic element for understanding the causes of the continued reproduction of the national bourgeoisie’s outdated industry and the ruined peasant economy in colonial/semicolonial countries. Although with a much lower level of productivity than big industry, as soon as the monopoly price of financial capital is established in a given branch, the opportunity arises for the non-monopolistic economy to survive. With a much higher cost of production, small and medium-sized businesses become viable when a monopoly price is set, because it allows them to make a minimal profit. In Brazil, beans are one of the main food products of the masses of peasants and workers; traditionally they were a commodity produced by peasants and therefore sold at a very low market price, which benefited the industrial bourgeoisie, as it meant a reduction in the value of the workforce. With the pro-latifundium policies during the Worker’s Party (PT) administrations of Lula and Dilma (2003-2016), the peasant economy’s production has sharply fallen. The lack of peasant beans on the market led to a significant rise in the market price of this commodity, which came to be dominated by large landlord production. The landlord, unlike the peasants, is able to impose their market price, which generated a 200% increase in the price of this commodity. On the one hand, this impacted the masses of the population with a rise in the cost of living and, on the other, it allowed peasant beans to return to the market, which with this new price was once again viable for the peasantry, despite its low productivity. The monopoly price thus explains the survival of domestic industry in the cities, and small and medium-sized production in the countryside.

The imperialist maximum profit is therefore explained by this complex relationship between imperialism and bureaucratic capitalism, between the imperialist bourgeoisie and the bureaucratic and comprador bourgeoisie, between imperialism and latifundium, between latifundium and peasantry in colonial/semicolonial countries. Thus, it is in these particular conditions of the imperialist stage that the contradiction between social production and private appropriation develops itself, as well as its manifestation in the class relationship between the proletariat and the bourgeoisie, which cannot be explained only from itself, only from the immediate relationship between wages and surplus value. So much so that the emergence of imperialism determines the consolidation of the phenomenon of the workers’ aristocracy in imperialist countries. In this way, colonial/semicolonial national oppression implies a change in the conditions for the development of the contradiction between the proletariat and the bourgeoisie in the imperialist countries.

In turn, it is imperialist domination that ensures for its own benefit the existence of the semi-feudal monopoly of land in the oppressed countries; this monopoly of land ensures the reproduction of a ruined peasant economy that produces basic food and is a determining factor in the low wages of the proletariat in general, by supplying fundamental goods for the reproduction of the workforce that are produced below cost price. This ensures the reproduction of a gigantic industrial reserve army, which, due to its miserable living conditions, is the source of the constant export of surplus population to the big urban centers. The mass of poor people expelled from the countryside to the city by the semi-feudal land monopoly in turn ensures the permanent super-exploitation of the proletariat in colonial/semicolonial countries. This super-exploitation is the source of values for the bribery of part of the working class in the imperialist countries. The semi-feudal monopoly of land, the overcrowding of the big cities in the oppressed countries and the permanent super-exploitation of the proletariat, puts pressure on the export of huge proletarian contingents to the imperialist centers. The mass of immigrants in the imperialist countries puts downward pressure on the wages of workers in the metropolises, contributing to the deterioration of the labor aristocracy. The imperialist bourgeoisie needs more and more to increase the extraction of surplus value on its own territory, because it is constantly fighting against the law of the tendency of the rate of profit to fall, brilliantly discovered by Marx.

Chairman Mao establishes that the principal contradiction is the one “whose existence and development determine or influence the existence and development of the other contradictions”. ¹²⁴ The economic, political and social analysis of imperialism shows that the principal contradiction of this stage of capitalism is between oppressed nations and imperialism, which determines the others. For, as we have just seen, it is colonial/semicolonial national oppression, sustained by latifundium, that conditions the super-exploitation of the proletariat in the oppressed countries and also in the imperialist countries. In turn, it is the colonial/semicolonial national oppression and its inseparable suppression of ground rent in these countries that ensures maximum profit at the expense of the profit of the rival power. The control of these sources of raw materials, the colonial/semicolonial national oppression, also determines the inter-imperialist contradiction, which is summed up as Lenin states in the struggle for the division of the world between a handful of powers.

This is why the principal contradiction of the imperialist epoch is that between oppressed nations and imperialism. And this does not negate the existence of the fundamental contradiction of the capitalist process and its manifestation in class relations between the bourgeoisie and the proletariat. Because it continues to be a fundamental contradiction of the process even during the imperialist stage, after all, economically, all the maximum profit appropriated by the powers is fundamentally shaped by the surplus value extracted from the proletariat. In addition, the maximum profit is also shaped by the suppression of ground rent from agricultural products and the extractive industry in the oppressed countries, which directly leads to an increase in profit (by reducing the costs of constant capital) and indirectly to an increase in surplus value (when the commodities enter in the consumption of the proletariat). The principal contradiction of the stage does not cancel out the fundamental contradiction of the process, which is the dialectical relationship between the universal and the particular, masterfully established by Chairman Mao in the law of contradiction.

124 Footnotes

V. I. Lenin, Imperialism, Highest Stage of Capitalism, our emphasis. ↩
UOC (MLM), Negation of Negation Magazine, n 6, 2023. ↩
Ibid. ↩
Ibid. ↩
UOC (MLM), Revista Contradicción, n 1, apud, nº 8, 1990, our translation and emphasis. ↩
Ibid. ↩
V. I. Lenin, Imperialism, Highest Stage of Capitalism, our emphasis. ↩
PCR-USA, Another twist in the world, apud, Contradiction Magazine, n 8, our translation. ↩
Chairman Mao, The Chinese Revolution and the Chinese Communist Party, our emphasis. ↩
V. I. Lenin, Imperialism, Highest Stage of Capitalism, our emphasis ↩
UOC (MLM), Negation of Negation Magazine, n 6, 2023, our emphasis. ↩
V. I. Lenin, Imperialism, Highest Stage of Capitalism, our emphasis. ↩
V. I. Lenin, Imperialism and socialism in Italy, our emphasis ↩
V. I. Lenin, Imperialism, Highest Stage of Capitalism, our emphasis. ↩
UOC (MLM), Negation of Negation Magazine, n 6, 2023, our emphasis. ↩
V. I. Lenin, Imperialism, Highest Stage of Capitalism, our emphasis. ↩
Karl Marx, Capital, Book 1, our emphasis. ↩
Ibid. ↩
Ibid. ↩
Ibid. ↩
Friedrich Engels, Socialism: Utopian and Scientific, our emphasis. ↩
Ibid. ↩
Ibid. ↩
V. I. Lenin, Imperialism, Highest Stage of Capitalism, our emphasis. ↩
Chairman Mao, On Contradiction ↩
Friedrich Engels, Anti-Dühring, our emphasis. ↩
Ibid. ↩
Ibid. ↩
Ibid. ↩
Ibid. ↩
Karl Marx, Capital, Volume 1, our emphasis. ↩
V. I. Lenin, Imperialism and the Split in Socialism. ↩
V. I. Lenin, Theses for the 2^nd Congress of the Communist International. ↩
V. I. Lenin, Imperialism, Highest Stage of Capitalism, our emphasis. ↩
J. V. Stalin, Economic Problems of Socialism in the USSR. ↩
V. I. Lenin, Imperialism, Highest Stage of Capitalism, our emphasis. ↩
Ibid. ↩
Friedrich Engels, Anti-Dühring, our emphasis. ↩
V. I. Lenin, Imperialism, Highest Stage of Capitalism, our emphasis. ↩
Ibid. ↩
V. I. Lenin, Imperialism and the Split in Socialism. ↩
J. V. Stalin, Economic Problems of Socialism in the USSR. ↩
Ibid. ↩
V. I. Lenin, Imperialism, Highest Stage of Capitalism, our emphasis. ↩
Ibid. ↩
J. V. Stalin, Economic Problems of Socialism in the USSR. ↩
V. I. Lenin, Imperialism, Highest Stage of Capitalism, our emphasis. ↩
V. I. Lenin, On the Caricature of Marxism ↩
Karl Marx, Capital, Volume 1, note, our emphasis ↩
Karl Marx, Economic and Philosophic Manuscripts, our emphasis. ↩
Karl Marx, Capital, Volume 4 ↩
UOC (MLM), Negation of Negation Magazine, n 6, 2023, our emphasis. ↩
Ibid. ↩
Ibid. ↩
Ibid. ↩
UOC (MLM), Program for the Revolution in Colombia, Fourth Edition, 2015, our translation and emphasis. ↩
UOC (MLM), Negation of Negation Magazine, n 6, 2023, our emphasis. ↩
Karl Marx, The Poverty of Philosophy, our emphasis. ↩
Karl Marx, Capital, Volume 3, our emphasis. ↩
Ibid. ↩
UOC (MLM), Negation of Negation Magazine, n 6, 2023, our emphasis. ↩
Ibid. ↩
UOC (MLM), Contradiction Magazine, n 18, 1996, our translation and emphasis. ↩
UOC (MLM), Program for the Revolution in Colombia, Fourth Edition, 2015, our translation and emphasis. ↩
Karl Marx, Capital, Volume 3, our emphasis. ↩
UOC (MLM), Program for the Revolution in Colombia, Fourth Edition, 2015, our translation and emphasis. ↩
Karl Marx, Capital, Volume 3, our emphasis. ↩
UOC (MLM), Contradiction Magazine, n 18, our translation and emphasis. ↩
Karl Marx, Capital, Volume 3, our emphasis. ↩
Ibid. ↩
Ibid ↩
Ibid. ↩
Karl Marx, Letter to Engels on “Capital”, August 9, 1862, our emphasis ↩
Karl Marx, Capital, Volume 3, our emphasis. ↩
Ibid. Some adjustments were made in the Table to illustrate it better. ↩
Ibid. ↩
Karl Marx, Capital, Volume 4, our emphasis ↩
Ibid. ↩
V. I. Lenin, Agrarian Program of Social Democracy in the First Russian Revolution, CW 4th Edition, Volume 13, our emphasis. ↩
Chairman Mao, Cast Away Illusions, Prepare for Struggle ↩
Karl Marx, Capital, Volume 3, our emphasis. ↩
Ibid. ↩
Ibid.. ↩
Ibid. ↩
Ibid. ↩
Ibid. ↩
Friedrich Engels, Capital, Volume 3, our emphasis. ↩
Karl Marx, Capital, Volume 3, our emphasis. ↩
Ibid. ↩
Karl Marx, Capital, Volume 3, our emphasis. ↩
Karl Marx, Capital Volume 4, our emphasis. ↩
Karl Marx, Capital, Volume 3, our emphasis. ↩
Karl Marx, Capital, Volume 4, our emphasis. ↩
Karl Marx, Capital, Volume 3, our emphasis. ↩
V. I. Lenin, Imperialism, Highest Stage of Capitalism, our emphasis. ↩
Ibid. ↩
Karl Marx, Capital, Volume 3, our emphasis. ↩
Ibid. ↩
Ibid. ↩
Ibid. ↩
Chairman Mao, Abandon Illusions, Prepare to Fight, our emphasis. ↩
V. I. Lenin, Ten “Socialist” Ministers, our translation and emphasis. ↩
International Communist League, Political Declaration and Principles, 2022. ↩
Friedrich Engels, Socialism Utopian and Scientific, our emphasis ↩
Ibid. ↩
Chairman Mao, On Contradiction, Selected Works, Foreign Languages Volume 1, our emphasis. ↩
Friedrich Engels, Socialism Utopian and Scientific, our emphasis. ↩
J. V. Stalin, Foundations of Leninism, our emphasis ↩
Chairman Mao, On Contradiction, Selected Works, Foreign Languages Volume 1, our emphasis. ↩
CPC, A Proposal Concerning the General Line of the International Communist Movement, our emphasis ↩
Chairman Mao, The Chinese Revolution and the Chinese Communist Party, our emphasis. ↩
UOC (MLM), Negation of Negation Magazine, nº6, 2023, our emphasis ↩
RIM, Declaration of the Revolutionary Internationalist Movement – Adopted by the delegates and observers at the second International Conference of Marxist-Leninist parties and organizations which formed the RIM, 1984, Our emphasis. ↩
Chairman Mao, On Contradiction, Selected Works, Foreign Languages Volume 1, our emphasis. ↩
Ibid. ↩
Ibid. ↩
Ibid. ↩
Ibid. ↩
Ibid. ↩
Ibid. ↩
Ibid. ↩
Ibid. ↩
Ibid. ↩
Ibid. ↩