Ground-Rent

Income received by a landowner who, by virtue of property in land, transfers the land to another person for use. Ground-rent presupposes the separation of property and management of land, and is the surplus-profit handed over to the landowner by the farmer, the economic form for the realization of property in land. It embodies different essential relations of man to man under different conditions of property.

Ground-rent is a historical category; it arose with the establishment of private property in land and the formation of land tenancy. Under private property in land, ground-rent is the portion of the surplus-produce or surplus-value created by laborers that is appropriated by the landowner without compensation. Marx pointed out that under the capitalist system, ground-rent is a transmuted form of surplus-profit, the surplus-profit passed to the landowner after the farmer received average profit, essentially a product of surplus-labor. The nature, content and form of ground-rent vary according to the nature of property in land. Under different socio-economic systems, ground-rent embodies different relations of production of society.

According to the different reasons of formation, ground-rent can be divided into feudal ground-rent, capitalist ground-rent and socialist ground-rent. Feudal ground-rent is the surplus-product created by the surplus-labor of the peasantry, which the feudal landlord class appropriates without compensation with the help of personal dependence. It had three basic forms: labor-rent, rent in kind, or money-rent. Labor-rent means that the peasants are forced by the feudal landlord’s extra-economic coercion to carry out farming labor on the land managed by the feudal landlord without compensation. Rent in kind means that the tenants paid a portion of their products to the feudal landlord as rent without compensation. Money-rent means a form of rent paid by tenants in money-form after selling their agricultural products.

Capitalist ground-rent means that the tenant capitalist passes a portion of the surplus-value created by the workers to the gives the landowner. The landowner leases the land to the capitalist, who employs the workers to produce and pays rent to the landowner according to the lease contract. This mode embodies the relationship between capitalists and landowners who jointly exploit the wage-laborers. Capitalist ground-rent has three main forms: differential rent, absolute rent and monopoly rent.

Socialist ground-rent refers to the surplus-profit obtained by socialist public property organizations operating or transferring land by virtue of their property inland. As long as the land belongs to different owners, regardless of whether the land is owned in common or privately, property returns will be obtained by virtue of the ownership of the land, and differences in the yield of the soil will arise due to the quality of the soil itself and the differences in investment. However, under capitalist conditions, the private ownership of ground-rent by landlords and capitalists embodies the capitalist relations of exploitation; the ground-rent under socialist conditions is appropriated in common by the state and collective, reflecting the equal relations between man and man under socialist public ownership.