lecture four, development

the agrarian question

development attends to social formations with a large peasantry—so the 'agrarian question' is essential to the problems of this course, naturally.

one and a half debates on the peasantry that have really mattered

the first generation – from the first decade of the 20^th century to the middle of the 20^th century. trying to deal with the question of what would happen to the peasantry as capiatalism spread. one answer was given by England—by the time that this debate was happening, England was far and away an urban country.

so people trying to understand the fate of the peasantry, looking at England, would expect more or less steady extinction. yet what they found, looking at continental Europe and elsewhere, was different – much slower extinction, if any

(1) economic: what explains the ability of the peasantry to persist, in the face of competition?

(2) political: what should socialists do? Sdem parties rooted in the working-class were concerned about what to do, when the bulk of the population was not w-class. peasants demanding strengthening of individual property, while w-class wanted socialization.

one easy answer was that history will solve this for us. if we wait long enough, the peasantry will disappear. the difficulty, though, again was that this wasn't happening fast enough.

what will happen to the peasantry? if they're not disappearing, why?

this was Kautsky's question.

when Kautsky started this book, he had wanted to show that the peasantry was doomed to extinction. but what he found was that there are actually mechanisms in place that allow the peasantry to exist, however precariously.

the sources of persistence are of two basic kinds: (1) peasants, when faced with more competitive producers, have one advantage—they aren't motivated to produce at the going rate of profit. for peasants the object of production is survival. they'll accept returns on their labour that are far beneath average – peasants will exploit themselves as is necessary. capitalists, however, will only produce at an average or above-average rate of return; they will withdraw at profits lower than this; (2) insofar as peasants are able to hold on to their plots of land, they end up being quite functional – (a) for employers in rural areas, the persistence of the peasantry promises cheap labour (costs of reproduction lowered by tiny plots of land); (b) insofar as they're willing to exploit themselves, they lower the cost of food, benefiting urban employers.

Kautsky and Lenin both recognized that the entrance of capital doesn't result in them following the same path that England did. capitalism can hold in place and accentuate the non-transformation of social relations in agriculture: agribusiness living in harmony with smallholders/small peasants.

the net result of this is not an equilibrium, even-based economic development; but accentuated unevenness.

this then brings up the next question. what do you do about this?

the traditional answer has been land reform. takes care of underemployment, produces income for peasants, and perhaps produces more efficiency (compared to larger landholdings). this last point is dubious (and the others depend on the nature of the land reform, no doubt).

let's talk about the inverse relationship of farm size-productivity.

Lenin versus 'populists' is rehashed, here. Lenin's response was land vs. labour productivity. and the basic point is the same, here.

in other words, giving land to peasants is fine for urban elites, of course. but it's terrible for peasants, welfare-wise.

exceedingly difficult to make judgments of relative efficiency of investments. when you do measure them, the relationship is a tenuous one.

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not that it's not capitalism, but that it's a very backward form of agrarian capitalism.

industrial transitions of late developers are very different, but agrarian transitions are even more different. these 'odd' forms generate endogenous obstacles, political and economic.

an end-run around the problem of the agrarian question through State-based cooperatives, etc.

GR allowed them to boost agricultural productivity without changing property structures.

Kautsky writing in the context of the influx of cheap grain, destroying peasantry; since the 1970s and liberalization, we're living in a parallel phase of rapid agricultural transition.

Patnaik's proposal that the internal market be treated as the 'export market,' which presupposes that you boost internal demand through boosting peasant incomes.

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in sum: Late developers find themselves in a situation where the market isn't helping: agrarian underdevelopment as capital comes in, and foreign endowments lock you into cumulative disadvantages. This is where the State is supposed to come in.