Course: EC575 Political Economy of Agrarian Change

School of Economics, UOH Course : EC 575 Political Economy of Agrarian Change Prof. R V Ramana Murthy Assignment I Submitted by : Mohit Ranjan Roy Reg. No : 20SEMA110 Semester- IV , PG 2020-22 Course: EC575 Poli/cal Economy of Agrarian Change 1. What is the view that Karl Kautsky took about the survival and tenacity of small peasants under capitalist transition of agricultural sector? What is Friedrich Engels’s supplementation about organising small peasants ? 10M The Agrarian Question by Karl Kautsky (1899) - prompts a critical overview of the agrarian situation in the existing economy (case study of Germany) in the lens of political and theoretical perspective. Kautsky was an outstanding leader of the Social Democratic Party (SDP) in Germany during 1880-1910. Around 1899 he was concerned with the questions like - (1) What are the dynamics of capitalist agriculture and (2) given those dynamics, what stances should the German SDP take towards the peasantry? Kautsky was more concerned about the small peasants due to industrial capitalism leading to transform the agricultural sector as well. He deals with the general question of whether or not capital is bringing agriculture under its domination, whether it is changing forms of production and forms of ownership in agriculture and how this process is taking place. He starts his inquiry with a beautiful and comprehensive description of patriarchal peasant economy and agriculture throughout the feudal era, where as the peasant was partly outside off the market, since the family's subsistence was only minimally relied on commodity exchange. With the development of towns and commercialization the pattern of peasants life also changes. Peasants family now can sell their surplus labour power as a wage labourer. He sketches how the development of capitalist production in towns would accelerate the transformation of the peasant life in the village with the help of technical standpoint (the crop rotation system, division of labour, machinery, fertilisers, steam ploughs, knowledge of microorganisms) i.e. the development of capitalism in agriculture, he proceeds to characterise “modern agriculture.” Further the 'Capitalist character of modern agriculture' shows the drastic separation of the agricultural producers from the landowners i.e. workers, who were erstwhile producers, are now alienated from means of production. The arrival of capitalism in agriculture changes the structure and peasant relations of the firms. The peasants are now renamed as proletarians i.e. as working class, whereas firms are now produce for market with the motive of earn profit and farm owners adopt modern techniques to optimise costs and productivity. So the large scale firms automatically holds the technical superiority over the small farms. Kautsky effectively demonstrates that the stability of petty production in agriculture does not depend in any way on its technical rationality but on the fact that the small peasants work far harder than hired labourers and sometimes, wage labourers are healthier than the small peasant. Small peasants are generally agricultural labourers including their family member, even also adding their children's, with undermining their education and capacity to enter as skilled labour. The number of large and small farms tended toward stability precisely because large farms were labor-intensive, and their size was limited by the availability of rural labor or small peasantry household. Small peasants would accept conditions of 'excessive and cheap' labor and undersell labour power through a process of self-exploitation as they undervalued their labor. It is sometimes drastically very visible that Hired agricultural labourers are quite frequently in a better position than the small peasants. Small peasants underlying themselves within the domain of backwardness like - Over-work, Undernourishment, underconsumption. Under this changing mode of production large size farm owners started to enjoy a profit which involves the surplus value plus the ground rent plus the exploitation or overwork of the small peasants sector. On this leading economic system the question of survival of these small peasants is obvious, Kautsky found it - 'The Cooperative system', through which small peasants can get engaged in the production process. He comes with the solution that village commune must go with large-scale communal farming. Credit cooperatives such as Dairy, Sugar - where they can engage with such functional activities. Though the reality is large farmers easily can get engage in organising cooperative activity. Where as small peasants maximally upgrade their skills and participate as a wage labourers. Kautsky concluded the relations between large and small landowners, which is likely closer to the relations of capitalists and proletarians. The capitalist transition in agriculture does not erase the small and marginal peasantry from agriculture and in the end the fate of the small peasants he mentioned as 'proletarisation of the peasantry'. Engles raised the agrarian question by analysing the historical forms of land ownership and the behavioural patterns of peasant with their specific characteristics and classes on the German countryside and he was highly focused on perspective of smallholders. The main concern he pointed out that the transformation of landownership, i.e. by historically common property of a tribe or village - 'primitive common ownership' to a modern private property rights in a capitalist regime and the formation of very unequal type of large- medium-small- landless holdings under the name of capitalist society. Engles dealt with the German peasantry of the 16th century, analyses the historical and socioeconomic situation and conditions of the peasantry. He found the peasants were depended on their feudal landlords and they were oppressed, exploited without limit - forced to give 'unmeasured services' . Engels expressed his position in "The Peasant Problem in France and Germany" , he considered the peasant as a very essential factor in population, production and also as a political power. He defined small peasants as particularly the former i.e. the owner or tenant - who have a patch of land , survivors of the past modes of production with families by excluding himself from the modern proletarian structure. He further explains the small peasants are as serfdom, bound to their lords and masters where as bigger peasants belong to the bourgeoisie and this bourgeoisie has failed to do its duty in freeing those people from serfdom- feudal relations. Engles comes with the visualisation of worker-peasant alliance, for the large sections of the peasantry to throwing off their feudal yoke. But excludes large and middle peasants as they are bigger peasants and who actually belongs to the bourgeoisie. He not only considered the small peasants, the serfs, tenants, or petty proprietors, apart from agricultural labourers who are on a par with industrial workers are also accounted in his formation of organizing the small peasantry. He clearly emphasised on behalf of Social Democratic party's of German, France, Belgium - the party should organize the peasants and this worker-peasant alliance is the very basic fundamental steps to rooted-up the feudalism from agrarian economy which leads towards a democratic and socialist revolutions . Engles secondly pointed out that SDP (Social Democratic Party) should have clear manifestations about their proposals to peasants, without giving false promises, i.e. the Party is not going to distribute the land radically i.e. by breaking up of large feudal estates and of large peasant holdings and their distribution among all the small peasants and landless labourers. Rather he suggested for the serfs, motive should be freedom from bondage; for the tenants- bring lower rents with the alliance of working class; for the petty proprietors, it should be an end to a usurers’ exploitation through a replacement of the debt to usurers by debt to the new workers’ state; and for laborers, the common land should be taken over by the State from the feudal lords and large peasants. In 1892, The Marseilles Congress Party in France adopted 1st Agrarian programme to form 'peasant cooperatives' for small peasants, tenants farmers to bring together all the elements of rural production and use the national soil, to wage an identical struggle against the feudality of land ownership. By organising small peasants Social Democratic Party can visualised the socialisation of land i.e. through the nationalisation of feudal estates and large peasants’ land but not land distribution. Highly motivated Friedrich Engles visualised the alliance of peasant-worker would be the beginning of a transition to socialism. 3. How Indian scholars did argued the two positions about 'semi-feudal' and 'capitalist' relations existing in Indian agriculture in the mode of production debate? 10M Historically the mode of production debate emerged in India in 1960s-70s with the introduction of Green Revolution in Indian agriculture by introducing high-yielding varieties of rice and wheat to increase food production in order to ease hunger and poverty. And an adoption of modern industrial system in the agricultural sector i.e. technology such as the use of high yielding variety seeds, mechanised farm tools, irrigation facilities, pesticides and fertilizers. So the great Indian mode of production debate took place within scholars with the question that whether green revolution had build the way for capitalist development or not. And what is the nature of Indian agriculture? What are the dominant production relations in Indian agriculture? The debate basically centred on how to characterised the nature of accumulation, is it 'capitalist' or 'semi-feudal' or 'semi-colonial' or 'feudal'. Our prominent scholars through their field survey and research tried to explain and continued this debate. Prominent Scholars like Ashok Rudra, Amit Bhaduri, Utsa Patnaik, Jairas Banaji, John Harris, Daniel Thorner, Nirmal Chandra, Pradhan Prasad, Hamza Alavi and many others participated, raised a series of questions and forwarded the debate. The discourse mainly taking place through the conception of the classical Marxian notion of class based analysis of agrarian India and Secondly, the existing nature of capitalism. The Former of this debate : Sulekh Chand Gupta, G.G. Kotovsky, Daniel Thorner As early as 1962, Sulekh Chand Gupta offered an estimate of capitalist farming as of 1953-54. Taking his point of departure, the concentration of hired labourers on large-acreage units shown in the Farm Management Survey, he noted, that in the state of Uttar Pradesh, the element of hired labour exceeded that of family labour on farms with 20 or more acres. He then extended this finding to the whole of India, i.e. he proposed to treat the farms operating with 20 or more acres as rough estimates of capitalist farms, this was not over- estimating, since in parts of India farms as low as 7.5 acres operated with farm servants throughout the year. He applied this technique, just discussed above in the ‘1953-1954 Census of Land Holding’, and came to the conclusion that less than 6 or 7 % of all operational holdings, amounted to about 1/3rd of the total area under cultivation (i.e., about 1/3rd was under capitalist production). G.G. Kotovsky also presented a similar estimation (1964). In 1953-54, he calculated that the land cultivated entirely or primarily by hired labor accounted for 25 percent to 30 percent of India's total area. He found that Capitalism in agriculture was a leading tendency, but yet it still did not dominate. In a series of articles published in a newspaper (The Statesman), Daniel Thorner in 1967, through his village tour in seven states of India. He witnessed that there were some enterprising cultivators, who eager to experiment with new scientific methods, wanted to switch to power for pumping and traction, ready to invest in improvements, preferring to cultivate themselves with hired labours, rather than, or in addition to, giving out land on rent in small parcels, and able to obtain substantial increases in output; although a few years back he was impressed by rural stagnation. Some of the new style cultivators that Thorner came across, were former industrialists, merchants, moneylenders, civil servants, and other persons of high economic and social status. He named these agriculturists as “gentleman farmers”, and predicted that the rise of such section is sure to bring about dynamism in economic development of the rural society in India. Leading Characters of this debate : Ashok Rudra & Utsa Patnaik Ashok Rudra in 1968-69, along with his two colleagues, reported a sample survey of big farmers in Punjab to find out what was really happening in Indian agriculture. The sample survey included 261 farms above 20 acres in size in all eleven districts of the Punjab. With regard to Daniel Thorner’s “gentleman farmers”, Rudra’s impression was largely negative, in his sample • 92% of the large farmer responded and claimed that cultivator was the only occupation they ever had • As many as 97% denied having any subsidiary calling • A bare 3% were former government or military men • And only 1% had the opportunity of college education • While 69% were completely illiterate. While concerning about agriculture, it is seen that land owned by these big farmers had increased by 9.5 % over twelve years, largest land size groups registering the maximum gain. Rapid rates of capital formation were also evident due to maximum use of tractors, pumps, tube-wells, agricultural implements etc. Thorner later pointed out that the "gentleman farmers" value lay not in their absolute or relative numbers, but rather in the dynamism they had brought to the land in the countryside. Rudra in his second instalment pointed out that, in 39% of the cases one or more adult males other than the head of the household are involved in work outside of agriculture. Rudra also takes up the question of peasantry classes in this instalment, claiming that if all farm variables could be made continuous and functions of size, then the Marxian concept of small farmers, medium farmers, and large farmers would be baseless. Rudra, in his third and final instalment (1970), sets some criterion for distinguishing capitalist farmers from large farmers . He expected that large farmers in Punjab would: - Tend to cultivate his land himself rather than give it out on lease (percentage of land rented out to total land owned) - Tend to use hired labour in a much greater proportion than family labour (wage payment in cash for acre of farm size X2) - Tend to use farm machinery (value of modern capital equipment per acre of farm size X3) - Market an important share of his produce (percentage of produce marketed to total produce X4) - So organise his production as to yield a high rate of return on his investments (cash profit per acre X5; productivity defined as value of output per acre of farm size X1) He used variables from his own data, and argued that if indeed there existed a category of farmers who were capitalists, then there would be a strong correlation between each pairs of the Xs ( i.e. X2 and X3, X2 and X4 etc) , his field data however failed to provide any strong association and thus he concluded that there did not exist any such class. Utsa Patnaik, a year later in 1971, demolishes his argument, and argues that his analysis was “unhistorical” and a strong positive association would make sense in an unreal idealised world in which different classes existed only in their purest form; she further argued that such correlation would have existed if the process of capitalism had been carried out to such an extent that it is the dominating mode of production. Historically, she contends, the capitalist is a former rich peasant or landlord, who gradually develops within the preexisting non-capitalist mode of production. She believes, ex-colonial countries like India is characterised by limited and distorted development of capitalism. According to Patnaik, the criterion of capitalism is not ‘wage-labour’, or ‘production for the market’ – since they were also present during the colonial times, which was not capitalist in nature – but accumulation and re- investment of surplus value in order to generate more surplus value, in an ever expanding scale. The capitalist, according the Patnaik, can be recognised by the “degree of capital intensification”, the process was already underway since mid-50’s in Patnaik’s views. Citing the results of her own field data, carried out in 1969, covering 66 big farmers in five states, she reported that a new class of capitalist farmers was indeed emerging and that capitalist development was underway, although, in varying degrees, throughout the regions which she studied. She also deals with Rudra’s attempt to define peasant classes in terms of statistical discontinuities and says that the Marxian distinction of peasant classes does not arise out of superficial statistical criterions but through the relations of production that bind them together. In reply, Rudra (1971) defends himself and suggests that the statistical enquiry is a translation of Marxian theory, from quality to quantity. Patnaik (1971) says that Rudra had hopelessly confused between two different propositions: That there exists within the prevailing non-capitalist economy there exists a small but growing class of capitalists. And Indian agriculture is characterised by sharp polarisation into two main classes i.e. capitalists and wage labourers. Paresh Chattopadhyay (1972) enters the argument and criticises Utsa Patnaik for giving a new definition of capitalism, and cites Lenin’s definition as capitalism being the highest stage if production where labour power itself becomes a commodity. Jairus Banaji (1972) comes in as a supporter of Patnaik. The search for Marxist characterisation of the colonial economies prior to the growth of a local industrial bourgeoisie, which particularly interests Banaji. His argument was focused on the mode of production of colonial India. Indian Agriculture as Semi-feudal in nature : Amit Bhaduri, Pradhan Prasad, Nirmal Chandra, Ranjit Sau Amit Bhaduri, on the basis of a survey, 26 West Bengal villages in 1970, he concluded that the existing production relations can best be described as semi- feudal, since they had more in common to the classical feudalism than modern capitalism. According to him, the semifeudal relations can be identified by (a) Prevalence of share cropping, (b) Perpetual indebtedness of the small peasants , (c) Concentration of the two modes of exploitation, namely usury and land ownership, in the hand of the same economic class , (d) Lack of accessibility of market for the small tenant. Bhaduri pointed out perpetual indebtedness requires the peasants’ families always fall short of consumption requirement. Bhaduri tells us that the rate of interest in these loans can range from 25-200% for a period of four months; thus usury is an important form of income to the land owner. Technological improvements are ignored, since an increase of productivity might free the peasants from perpetual indebtedness. Thus semi-feudal relations operate as a barrier to the introduction of improved technology. Pradhan Prasad (1973-74) showed support for Bhaduri’s thesis from a survey of 2000 households in a couple of dozen villages in 1970 and 1972, and points out that the main objective of the land owners is to have political and social influence over the tenants rather than maximising profit or return. In a his article (1974) based on evidence of various sample surveys conducted through 1951-1971, he concludes that the semi-feudal model is by and large valid for most part of rural India. Nirmal Chandra (1974-75) , used official data for West Bengal, and applying the laws of motion of agriculture formulated by Kautsky and Lenin in the context of a national economy undergoing capitalist transformation, he suspected, that our country was not going through a capitalist transformation at all and that there were important socio- economic forces impeding such a transformation. Nirmal Chandra agrees with Bhaduri, except one position, he felt that Bhaduri over-exaggerated the effect of semi feudal relations in holding back the productive forces, he argued that if one allows for variable share cropping ratio, the landowners could be better off, while keeping the peasants where they were. Nirmal Chandra also put forth that underemployment and unemployment was keeping this system stable and hindering the growth of capitalism in rural India. Ranjit Sau (1975) expresses agreement with Nirmal Chandra, and adds that the nonavailability of alternative job prospects results in the stubborn persistence of small peasants to continue cultivation. CONCLUSION: To review the Indian agricultural system and how it progress through time across country and whats its nature of production or production relations it is so very difficult to conclude in a single form due to its very complex and diverse nature throughout the country. The Mode of Production Debate, among scholars they tried to simplify and find the existing production relations by surveying across country. Whereas Utsa Patnaik (UP) was in favour of capitalist development, Rudra pointed against that (Patnaik 1990). Bhaduri (1973) pointed out about persistence of semi-feudalism based on usury capital. This debate opens up the way for further rethinking of agrarian question. 2. Explain the summary of Stephan Epstein’s transition debate between, in highlighting the role of factors such as the state and technological change in English capitalist transition, over class struggle as the prime mover? 10M In 2006, Stephan R. Epstein in his essay criticized Maurice Dobb and Rodney Hilton's thesis. They argued that the transition to capitalism was caused by a 'class struggle' between serfs/peasants and feudal lords. Where as Epstein's paper deals with the historical complexities of agricultural transition towards capitalism, arguing that the contradiction between the rate of development of productive forces in agriculture and the institutional constraints of the feudal political economy was the primary factor driving the transition to capitalism. Dobb used Marx's Capital to explain England's 'truly revolutionary path' to capitalism, which included class struggle—the 'prime mover'—and class differentiation in terms of property rights to land, and defined the historical and theoretical problems, which Hilton as a historian always agreed with it. After this Class struggle and self-determination through struggle were central point to Hilton’s Marxism. So the concluded that the transition from feudalism to capitalism in Britain was the outcome of the struggle over rents between landlords and peasants. Stephan Epstein critically evaluates Dobb-Hilton's English centric position. Dobb argued Feudalism faced a 'general crisis' in the 15th century England due to the systems inefficiency to accumulate capital as well as technical innovation, existing peasant overexploitation, resulting in a class war between peasants and feudal lords. Here Epstein raises a question , If Feudalism characterised as an inefficient mode, then how it succeed to expand territorially, economically and technologically throughout the Europe. Also in account of Hiltons documentation of rural struggle and resistance against landlord exploitation , that leads to transition towards for a market , which resulted in a huge number of wage labourers who can rely on the market to satisfy their basic needs. According to Epstein, it was ultimately the class struggle that gave rise to agrarian capitalism and competitive capitalist markets of sellers and buyers. But Epstein concerned about the two missing pillars that Dobb-Hilton ignored, they are - technological development through time and a political economic intervention of states and markets. To counter this argument Hilton gave data that the landlords invested at the rate of a mere 5 percent, which was insufficient to support 13th century productivity. Rather than invest in capital, the lords tended to invest in maintenance of a large retinue and army; to spend most income on personal display; to upkeep their social and political standing. But, Epstein points out that a net annual rate of capital accumulation of 5 percent in the 13th and 14th centuries is not too low for a preindustrial economy. Epstein also remind them about the role of trade in feudalism, i.e. the peasant petty commodity production to monetisation of this production in the late medieval period. Where as growing trade enabled production for markets, ‘both the means and the motive for improving cultivation’ and for engaging in petty commodity exchange. It led to class differentiation and capital accumulation within the economy of small producers. Epstein includes the role of the State as an institutional frame work, which Hilton-Dobb missed to account with. He defined feudalism as a social-economic formation through time dimension and the journey of feudal mode of production to transition towards capitalism he sketches some points- 1. Decentralised power to landlords, expressed through private jurisdiction; 2. ‘Feudal rent’ includes payments for seigneurial monopolies (besides commercial taxes); 3. Centrality of peasant commodity production to the economy and 4) Money element introduced in the relations of production by mercantile capital and urbanization. Epstein outlined his feudalism model as most rural producers owned their means of production and sold a portion of this on the market. That is they reacted positively to changes in supply and demand, as well as relative pricing. Feudal lords extracted agriculture surplus through military threatening, also directly as rent in cash or labor, and indirectly through taxation, trade levies. By the times the introduction of jurisdictionally ‘free’ trade which did not just lower feudal and urban revenues – it also challenged the superiority of lord over peasant and town over country. In agricultural production non-ignorable constrains like weather and markets risks is a important factor to considering growth, along with underdeveloped agricultural and botanical sciences slowed the technological innovation and implementation of modern methods in agrarian economy. He argued especially the development of regional and national metropolises after the late medieval crisis in 15th century, offered improved opportunities for exchange of knowledge; higher average quality of labour, a greater likelihood of matching skills to demand. Since the 14th century, a significant increase in manufacturing in both the city and the countryside has resulted in an unprecedented absorption of labor due to regional development, alongside commercial agricultural activities in England. Traditional urban vocations and the urban tax base were threatened by this growing rural semi-industry. It also had to be wary of absorbing displaced peasants overnight, since this may irritate the landlords. The gradual separation of workers from the means of production, which caused them to become footloose and seek work in non-agricultural industries, which finally leads easing of feudal traditions.