Agrarian Crisis as the Crisis of Small Property Ownership in Globalizing Capitalism

The topic of agrarian crisis is everywhere.  What does it mean, though?

We know what ‘agrarian’ means.  It refers to agriculture and its social relations.

What does ‘crisis’ mean?  It means a problem (or a set of problems).  It is not an ordinary problem, however.  It is a big problem.  It is a problem that must be addressed immediately.

Agrarian crisis, then, really refers to a problem (or a set of problems) concerning agriculture and its social relations, which must be addressed urgently.

But what is the problem?  When people think about agrarian crisis, they often think about farmers killing themselves, their poverty, etc.  In India, Utsa Patnaik, P. Sainath, and others have written much about the topic.  We know that a farmer is killing himself/herself every half an hour.  We know that costs of farming are increasing much faster than the revenue from farming.  We know that farmers are heavily indebted.  We know that rural ecology is being destroyed by the profit-driven production process.  We know that the state is not doing as much as it (apparently) used to for the farmers.  And so on.

While we know a lot more now about the agrarian crisis than before, a major problem with the thinking about it is this: the impression is generally given that the problem is a problem of agriculture, of rural areas, of a poor country such as India.

It is often suggested that farmers in rich, imperialist countries are really a privileged class vis-à-vis farmers in India.  While I will not deny that farmers in rich countries are not as precarious as those in, say, India, the underlying structural difference is exaggerated in nationalist accounts of the agrarian crisis.  It is also often implied that reversing state withdrawal or the introduction of ‘social-economy’ of farmers (e.g. self-help-type mechanisms; small coops of farmers as commodity sellers or even as producers) or a combination of these things can address the crisis.  While these mechanisms can mitigate the crisis in a short-term manner and/or in certain localities, it is not clear how they can do more than that.

I argue that the agrarian crisis is not entirely about agriculture and rural areas.  It is a broader problem which is manifested in the context of agriculture and rural spaces.  The agrarian crisis, moreover, is hardly a problem confronting only poor countries: thousands of farmers are going out of business in Canada, including in areas not far from where I am writing this piece, and farmers have killed themselves in the US as well.  Farmers are slowly losing control over the farming process in rich countries, too, where their debt is a large proportion of their total asset, making them quasi-nominal owners.  They are more or less completely strangled by the imperative of having to buy expensive farm inputs from big business such as Monsanto.

We need to understand agrarian crisis in less nationalistic and less farming-specific ways.  Agrarian crisis — and similar problems — must not be seen outside of the overall framework of capitalism as a global class relation.  Here are 13 theses seeking to explore the framework for understanding the crisis.

1. The law of value is important: the individual value of a commodity must, more or less, sooner or later, conform to the social value.  The total amount of labor time embodied in living labor and dead labor (e.g. machines, tools, processed raw materials) needed for the production of a commodity on a farm or in a factory must be close to the average in the industry of which such a farm/factory is a part.  In terms of price, the cost of production of a commodity on a farm or a factory must be competitive; it must be close to the socially average cost.

2. The law of value is basically and ultimately an international process.  The increasing use of technologies (e.g. new seeds; new machines) must be seen as a part of this process, a process of the reduction of value (i.e. producing things at less cost).

3. The state can intervene to bridge the gap between the two values: individual and social.  This role can also be played sometimes and in some places by institutions of the social economy, including philanthropy, NGOs, and self-help groups.

If an entrepreneur is commercially producing cotton or car at or above the social value (if her/his cost is more than the average cost in her/his industry which includes many farms/factories), the state can make sure that the gap between the social value and the individual value is minimized, so that the entrepreneur can remain in business in spite of being (somewhat) inefficient.

4. Until the 1970s (and in some countries such as India until the late 1980s), the state had been performing this bridging role for farmers as well as other kinds of property owners.

5. But the state itself (like other similar institutions) is subject to the law of value, because the state itself is dependent on value creation and value circulation.  Even if the state is itself a producer, it cannot continue to indefinitely ignore the law of value, the imperative to produce at a socially average ‘cost’, to cut costs.  The fall of Stalinist regimes, the neoliberalization of statist regimes of Third World capitalist countries, and the severe weakening of so-called welfare states in rich countries are all suggestive of, and corroborate, this process.

The state cannot continue to play the role of ‘value-matching’ for too long.  It cannot do so especially after capitalism — its law of value — has become, in reality, more and more globalized.

6. This has resulted in the law of value acting as if it were a natural force, destroying inefficient property owners.  If the cost of producing a commodity or a service is consistently above the average, that unit is in trouble.

7. Given the economy of scale (when commodities are produced in bulk, the cost of production per commodity unit tends to be reduced), smaller owners tend to be inefficient owners.  (I am aware that sometimes they can depress their own consumption levels — as well as the consumption levels of people they may employ for a wage — to remain in business.  I am also aware that relations of gender, race, caste, and family are made use of to cut costs.  For example: remittance from a family member can help a losing business remain afloat; gender and other relations are used to depress wage payments.)

8. The so-called agrarian crisis is really, to a large extent, a crisis of small owners, including small-scale capitalists.  It is a crisis of smaller property owners, under the rule of capital as a global social relation, under the rule of the law of value.  Not only that.

9. The other side of the agrarian crisis is the crisis of livelihood of workers who are involved in production.  As the imperative of cost cutting gets strong and globalized, there is not only a tendency towards unemployment/under-employment (in spite of palliatives such as employment guarantee schemes).  Such an imperative also leads to a situation where wages paid by small capitals are hardly adequate for a decent life (I am not suggesting that big capitals really pay decent wages).  Rural labor, including that employed intermittently by rural small capitals (including non-farm business), is a part of the expanding reserve army of the world.  In other words: super-exploitation of rural labor is a part of the agrarian crisis, which, in turn, is a part of the crisis of small capitals (and the latter crisis is, in turn, a part of the current terminal crisis of capitalism, which cannot be discussed given the limitations of space here).

Agrarian crisis is not entirely about farmers and peasants.  It is also about rural labor.  It is not about agrarian or rural capitalism.  It is about capitalism tout court.

10. Because there are small capitals — or small-scale property owners, including those who may employ a few wage workers — in all countries of the world (rich and poor), there is a crisis of small property ownership everywhere in the world.

In other words, there is a global tendency towards Leninization, i.e. a global tendency towards class differentiation, towards concentration and centralization.  This process includes a) a process of the expansion of the global working class, which is living a precarious life, b) a process of smaller owners gradually going out of business, and c) a process of some people increasingly controlling more and more of society’s material resources (including the land of erstwhile owners).

As small property owners, farmers in rich countries and farmers in poor countries share some fundamental common interests.  It is capitalism that is the common cause of their precarious condition, their crisis.

11. As Marx’s model of capitalism as a global relation (which he talks about in the Communist Manifesto so eloquently) becomes a reality, so does Lenin’s model of development of capitalism as he talks about it in his Development of Capitalism.

Yes, this globalization of the law of value is mediated by various factors (including caste/race/gender factors, the operation of self-help groups, and so on), which can modify the law in specific localities, producing spatial unevenness.

But the law itself is undoubtedly operational.  (For the analytical purpose, I am abstracting from the other process that is endemic to capitalism: forcible dispossession, including of smaller owners, which has been much talked about producing a cottage industry of land grab studies.  This tradition of thinking, more or less, ignores conditions of rural labor and abstracts from capitalist relations of exploitation on the land.)

12. This globalization of capitalist relations has all kinds of implications.  That is, there are implications for class struggle, for the extent to which capital and its state can accommodate demands for concessions, for how authoritarian the state is liable to become in responding to people fighting for relief against the law of value, and so on.

13. If the agrarian crisis is a crisis of small-scale property ownership and a crisis of livelihood of the laboring class, a crisis caused by the capitalist relations operating increasingly at a global level, it follows that the long-term resolution of such a crisis requires concerted multi-scale political mobilization on the part of labor and peasants/farmers against global capitalist relations to establish a society where resources, including land, are used in an ecologically sound manner for the benefit of all human beings of the world.

Raju J Das, York University