V. I.   Lenin

New Data on the Laws Governing the Development of Capitalism in Agriculture

PART ONE—Capitalism and Agriculture in the United States of America


11. A More Exact Comparison of Small and Large Enterprises

As I have already said, American statisticians in this case take the value of the products raised on the farm, less those used as feed. Taken alone, these data, which appear to be available only in American statistics, are, of course, less exact than the figures for acreage or livestock, and the like. But considered as a whole, in relation to several million   farms, and especially for the purpose of determining the relative standing of the various groups of farms in the country, these data undoubtedly cannot be regarded as less suitable than the rest. At any rate, these data are a much more direct indication than any others of the scale of production, especially commercial operations, i.e., the value of the produce raised for the market. It should be borne in mind that any discussion of agricultural evolution and its laws centers on a consideration of small-scale and large-scale production.

What is more, in such cases the point is always the evolution of agriculture under capitalism, in connection with capitalism, under its impact, or the like. To evaluate this impact the greatest efforts must above all be made to draw a line of distinction between “natural” and commercial economy in agriculture. It is well known that “natural” economy, i.e., production for consumption on the home farm and not for the market, has a relatively important part to play in agriculture, and is giving way to commercial farming at an extremely slow pace. If the accepted principles of political economy are not to be applied mechanically but intelligently, the law of the displacement of small-scale by large-scale production, for instance, can be applied only to commercial agriculture. It is hardly likely that anyone will object to this proposition from the theoretical standpoint. However, it is the rare economist or statistician who will make a special effort to bring out, trace and as far as possible take into account, the characteristics indicative of the transformation of natural into commercial agriculture A great step towards meeting this most important theoretical requirement is made by the classification of farms according to the money value of produce not used for feed.

Let us note that, when considering the undeniable fact that small-scale production is being displaced by large-scale production in industry, enterprises are always grouped according to the value of their product or the number of wage-workers employed. In industry, due to its technical peculiarities, the matter is much simpler. In. agriculture, because relationships are so much more complicated and intertwined, it is a great deal harder to determine the scale of operations, the value of the product and the extent to   which hired labour is employed. For the last-named item, it is necessary to take account of the total annual employment of hired labour and not merely the amount on hand when a census is taken, for agricultural operations are of an especially “seasonal” nature; in addition, it is necessary to list not only the permanent hired labourers but also the day-labourers who play a most important part in farming. To say that this is difficult is not to say that it is impossible. Rational methods of investigation adapted to the technical peculiarities of agriculture, including classification by output, the money value of the product, and the frequency and amount of hired labour employed, will have to be used on a much wider scale, in spite of the thick maze of bourgeois and petty-bourgeois prejudices and the efforts to embellish bourgeois realities. And it may be safely said that any step forward in the use of rational methods of investigation serve to confirm the truth that in capitalist society small scale production is being displaced by large-scale production both in industry and agriculture.

Let us take the 1900 returns for the groups of farms in America classified according to the value of their product:

Average per farm

Farms classified by value of product ($)

Number Acreage of farms
(percentage of total)

Hired labour
1 and under 50
50 and under 100
100 and under 250
250 and under 500
500 and under 1,000
1000 and under 2,500
Over 2,500

Average for all farms 72.3 133

The farms reporting no income, i.e., with a $0 value of product, probably consist primarily of newly occupied homesteads on which their owners had not yet had time to erect buildings, acquire livestock or sow and raise a crop. In a country like America, where colonization is still in progress on such a vast scale, special importance attaches   to the question of how long a farmer has been in possession of his farm.

Leaving aside the zero-income farms, we get a picture quite similar to the one obtained above by grouping the same data according to total farm acreage. As the value of the product raised on a farm increases, there is also an increase in the average improved acreage, the average expenditure on hired labour, and the average value of implements and machinery. By and large, the more profitable farms—in terms of gross income, i.e., the value of their total product—turn out to have the larger acreage. It would appear that the new method of grouping has not yielded anything new-at all.

But now let us take the averages (the value of livestock and implements, expenditure on hired labour and fertilizers) per acre instead of per farm:

Per acre of all land ($)
Farms classified by  value of product
Outlays on hired labour Outlays on fertilizers Value of
Value of
and machinery
1 and under 50
50 and under 100
100 and under 250
250 and under 500
500 and under 1,000
1000 and under 2,500
Over 2,500

The exceptions in some respects are the zero-income farms, which in general are in a very special position, and the farms with the highest incomes, which turn out to be less intensive than the next group, judging by three out of the four characteristics we have chosen. But on the whole we find a uniform increase in the intensity of agriculture with the increase in the value of the farm product.

This result is the very opposite of the one obtained when farms were grouped by acreage.

The same figures yield diametrically different conclusions, depending on the method of grouping.

As the enterprise grows in size the intensity of agriculture declines—if the criterion is acreage, and increases—if the criterion is the value of the product.

Which of these two conclusions is the correct one?

It is clear that if the land is not being improved, acreage gives no idea at all of the scale of agricultural operations (we must not forget that in America farms are grouped not only according to the improved acreage, but also by the total acreage and that in that country the proportion of the improved acreage ranges from 19 to 91% in the farm groups, and from 27 to 75%, in the geographical divisions); it gives no correct idea at all if besides this there are so many substantial differences between farms in the methods of cultivation, the intensity of agriculture, the methods of field cropping, quantities of fertilizers, the use of machinery, the character of livestock farming, etc.

This is known to apply to all capitalist countries and even to all those whose agriculture is affected by capitalism.

We see here one of the most profound and general reasons why mistaken notions about the “superiority” of small-scale agriculture are so tenacious, and why bourgeois and petty-bourgeois prejudices of this type prove to be compatible with the great progress made in the last few decades by social statistics in general, and agricultural statistics in particular. To be sure, the tenacity of these mistakes and prejudices is also a matter of the interests of the bourgeoisie, who seek to cover up the depth of class contradictions in contemporary bourgeois society; and everyone knows that when it comes to interests, the most incontrovertible truths are liable to be questioned.

But we are here concerned only with an examination of the theoretical sources of the erroneous notion of the “superiority” of small-scale agriculture. There is no doubt at all that of all these sources the most important one is the uncritical, routine attitude to the hackneyed methods of comparing enterprises only by their total acreage or the improved acreage.

The U.S.A. is an exception among capitalist countries in that it alone has a great deal of unoccupied, unsettled land, which is given away free. Agriculture still can and indeed does develop here through the occupation of vacant land, through the cultivation of virgin lands never before put to the plough—here it does develop in the form of the   most primitive and extensive livestock and crop raising. There is nothing of the kind in the old, civilized countries of capitalist Europe. In these countries, agriculture develops mainly through intensive methods, not by increases in the quantity of land under cultivation, but by improvement in the quality of cultivation, by increases in the amount of capital invested in the original acreage. Those who compare farms by acreage alone lose sight of this principal trend in capitalist agriculture, a trend which is gradually becoming the principal one in the United States as well.

The principal trend in capitalist agriculture is the conversion of small-scale enterprise, which remains small in terms of acreage, into large-scale enterprise in terms of output, in the development of livestock raising, the quantity of fertilizers, the scale on which machinery is used, and the like.

That is why the conclusion drawn from the comparison of the various groups of enterprises by acreage—that the intensity of agriculture declines with the greater size of enterprise—is entirely incorrect. The only correct conclusion, on the contrary, is to be drawn from the comparison of the various farms by the value of their product—the bigger the enterprise, the greater is the intensity of agriculture.

For acreage is only circumstantial evidence of the scale of agricultural operations, and the broader and more rapid the intensification of agriculture, the less authentic is this “evidence”. The value of the product of an enterprise is not circumstantial but direct evidence of the scale of its operations. Moreover, it is true in every case. By small-scale agriculture is always meant the kind that is not based on hired labour. But the transition to the exploitation of hired labour does not depend only on the extension of the acreage of an enterprise on its old technical basis—this occurs only in primitive, extensive enterprises—but also on an improvement of equipment and techniques and their modernization, investment in the same acreage of additional capital in the form of, say, new machinery or artificial fertilizers, or of increased and improved livestock, etc.

The classification of farms by the value of their product brings together enterprises which really have the same scale of production, regardless of acreage. Accordingly, a highly   intensive enterprise on a small tract of land falls into the same group as a relatively extensive enterprise on a large tract; both are actually large-scale in terms of production and the employment of hired labour.

On the contrary, the classification by acreage throws together large and small enterprises, because they happen to have a similar acreage; it puts into the same group enterprises with an entirely different scale of operations, those in which family labour predominates, and those in which hired labour predominates. The result is a picture of blunted class contradictions within capitalism, a picture which is basically incorrect and entirely misleading as to the actual state of affairs, but one the bourgeoisie is very fond of. This leads to an equally fallacious embellishment of the condition of the small farmers, which the bourgeoisie is just as fond of. The net result is a vindication of capitalism.

In effect, the fundamental and principal trend of capitalism is the displacement of small-scale by large-scale production, both in industry and in agriculture. But this displacement should not be interpreted merely as immediate expropriation. Displacement also implies the ruin of the small farmers and a worsening of conditions on their farms, a process that may go on for years and decades. This deterioration assumes a variety of forms, such as the small farmer’s overwork or malnutrition, his heavy debts, worse feed and poorer care of livestock in general, poorer husbandry—cultivation, fertilization and the like—as well as technical stagnation on the farm, etc. If the researcher is to be absolved from the charge of wittingly or otherwise playing up to the bourgeoisie by giving a false impression of the condition of the small farmer, who is being ruined and oppressed, his task is, first and foremost, to give a precise definition of the symptoms of this ruination, which are not at all simple or uniform; his next task is to determine these symptoms, to analyze and, as far as possible, to define the extent to which they have spread and how they change with time. But present-day economists and statisticians hardly pay any attention to this vital aspect of the matter.

Just imagine that to a group of 90 small farmers who have no capital to improve their farms, who lag behind the times and are gradually being ruined the statistician adds 10 farmers   who have all the capital they need and on equally small tracts of land start large-scale operations based on hired labour. The net result would be an embellished picture of the condition of all the hundred small farmers.

The U.S. Census of 1910 produced just that kind of embellished picture—and one that, objectively, favored the bourgeoisie—primarily because it discarded the method used in 1900 of comparing the acreage grouping and the value-of-product grouping. We learn, for instance, only that expenditure on fertilizers increased immensely, namely, by 115%, i.e., more than double the previous figure, while the expenditure on hired labour went up by only 82%, and the total crop value by 83%. This is tremendous progress. It is the progress of national agriculture as a whole. And, I dare say, some economist is likely to draw—if indeed has not yet drawn—the conclusion that this is the progress of small-scale family farming, for, generally speaking, the returns for the size groups by acreage indicate that “small-scale” agriculture has a much higher per-acre expenditure on fertilizers.

But we now know that such a conclusion would be fallacious, because the one thing the grouping of farms by acreage does is to lump together farmers on the way to ruin, or at any rate the indigent small farmers who cannot afford to buy fertilizers, and capitalists (even if they are small-time capitalists) who, on small tracts of land, start large-scale farming operations with the use of up-to-date, intensive methods and the employment of hired labour.

If small-scale agriculture is being generally displaced by large-scale agriculture, as the figures for the total value of farm property in 1900 and 1910 show; if, as we shall presently see, the raising of highly capitalist crops on small tracts developed at an especially fast rate in this period; if, according to the general statistics on small and large enterprises grouped by the value of their product, expenditures for fertilizers increased proportionately with the scale of the enterprise—then the conclusion inevitably follows that the “progress” in the use of fertilizers from 1900 to 1910 went to increase the preponderance of capitalist agriculture over small agriculture, which was displaced and suppressed to an even greater extent.



  10. Defects of Conventional Methods of Economic Analysis. Marx on the Peculiarities Of Agriculture | 12. Different Types of Enterprises in Agriculture  

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