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Abstract
The paper measures the size of primary-sector surpluses in the form of ground-rent appropriated by social subjects other than landowners in Brazil, and assesses their weight in supporting the process of capital accumulation during the period 1953–2008. For that purpose, the paper identifies the mechanisms through which state policies channelled a portion of ground-rent to capital, especially in the industrial sector, assessing their individual impact. The paper finds that transferred ground-rent has complemented surplus-value normally available for appropriation by capital and thus helped sustain its process of accumulation throughout most the period analysed here, including the post-1990 ‘neoliberal’ era.
Notes
1. On the contrary, agrarian production expanded continuously during those years. See Graham, Gauthier and Mendonca de Barros (1987, 8). Indeed, as Bacha (1978, 144) noticed, the fast expansion of coffee production during the period of high ‘taxation’ (i.e. 1947–1954) is an indication that normal profitability was not being affected.
2. Wage differentials between agrarian and industrial workers do not necessarily imply the payment of the rural labour-force below its value. Urban wages are normally higher than rural wages for at least two reasons. First, the cost of reproduction of the urban labour-force is higher than that of the rural labour-force because the productive attributes of the former are more complex than those of the latter. Secondly, rural workers need, ceteris paribus, to consume comparatively less use-values than their urban counterparts since they tend to have lower expenditures in transport, clothing, housing, etc. See Grinberg and Starosta (2009).
3. The marginal land is, by definition, the one where, ceteris paribus, capital sets in action the lowest level of labour productivity. This does not mean, however, that the last land brought into production to satisfy social demand is, by definition, the marginal one. Yet, it means that, unless all lands are of the same quality, at any moment there would be a plot of land which is the marginal one.
4. In primary production, crucially in the agrarian sector, the different successive (intensive) applications of capital do not change – as in industrial activities – the quality of the output. They simply change its quantity. Each portion of capital is thus associated with a different level of labour productivity. See Iñigo Carrera (2007, 102–103).
5. Equally, if rural (or mining) wages are particularly lower than urban wages, for reasons other than differences in the cost of reproducing both types of labour-power in the conditions required by capital, the rate of profit would, ceteris paribus, be higher in the rural than in the urban sector. Competition among capitals to appropriate these extraordinary profits would transform them into ground-rent. See Marx (1981, 765, 890).
6. This section refines the theoretical foundations and methodology, and extends the temporal extension, of the analysis presented in Grinberg (2008).
7. This is noted by Brandão and Carvalho (1991, 120–122) who find themselves in difficulty when attempting to do it.
8. Profit-rate-equalising competitive pressures have passed the ‘discount’ from agrarian and mining capital to landowners through lower rents paid for the use of land.
9. What is said here for industrial capital invested in manufacturing (industrial capital proper) holds, mutatis mutandis, also for its junior partners, namely, industrial capital invested in agrarian, mining and ‘service’ production and commercial capital invested in the trade of goods and money (i.e. commercial and baking capital, respectively).
10. The ‘association’ between landowners and capital for the appropriation of the Brazilian ground-rent has been inherently antagonistic. Not only have they ‘struggled’ over the appropriation of the available rent. By lowering the domestic prices of primary goods, the forms of ground-rent appropriation by capital have also limited the intensive and extensive application of capital to land, and thus lifted a barrier to the growth of primary production and of the total rent available for appropriation.
11. For the sources and base time-series used in the measurements presented in this paper, see Grinberg (2011, 416--521).
12. The specific policies through which the Brazilian state kept the exchange rate overvalued have changed throughout the period discussed here. So have the ideological forms through which the process has come about. Yet, the outcome and specific social content (e.g. being a form of ground-rent appropriation) of these policies have remained unchanged. In general terms, before the early 1990s, exchange-rate overvaluation resulted from direct and strong state intervention in, and control of, the foreign exchange market. See Brandão and Carvalho (1991) for the evolution of exchange-rate policies until the mid-1980s. Since the early 1990s, state control of the foreign-exchange market has been slightly more subtle. The state has tended, crucially during years of high primary-commodity prices and international liquidity, to accumulate large foreign-exchange reserves, and thus decrease their price, by borrowing locally funds attracted by the internationally-high yields on public-sector debt instruments. See Dias Carneiro et al. (2001, 20) for the 1990s and Arestis, Ferrari-Filho and de Paula (2011) for the more recent period.
13. The method of absolute PPP used by most international organisations is not suitable to measure the degree of exchange-rate over/undervaluation. By comparing the amount of national and foreign currency needed to buy a certain basket of goods in the domestic and world markets, and using that relationship to estimate PPP exchange rates, it fails to notice that the prices of the goods and services included in the baskets are affected themselves by the very same factor that is trying to capture through them, namely, the over/undervaluation of the currency. This method, on the contrary, is useful to produce international comparisons of the real purchasing power of national wages. Black market exchange rates are also problematic as a measure of the degree of overvaluation of a national currency. This is particularly the case when systems of multiple exchange rates are in use, as in Brazil before the early 1960s and during most of the 1980s, or when the currency is pegged or semi-pegged to a foreign currency and its commercial parity is supported by massive central bank foreign exchange reserves, as in Brazil during the 1994–1998 Real Plan. See Bacha and Taylor (1971); Taylor and Taylor (2004); Iñigo Carrera (2007) for a discussion of the merits and pitfalls of the different methods used to estimate the ‘equilibrium’ or parity exchange rates.
14. The discrepancy is largely unimportant throughout most of the post-Second World War period. It is the largest during 1994–1998 when the currency appears to be 10% more overvalued when using the economy-wide indices of labour productivity than when using industrial labour productivity.
15. In this paper it is computed for the domestic consumption of the following commodities: corn, soybeans, beans, cotton, rice, sugar, beef, manioc and iron ore.
16. See Piermartini (2004) on the effect of export taxes on the prices of domestically-consumed primary commodities and their close substitutes.
17. See National Department of Mining Production (2011).
18. See Brandão and Carvalho (1991, 46–79) for an overview of agrarian policies up to the 1980s.
19. The PPP exchange rate should not be used here as the effect of the overvaluation of the exchange rate was already accounted for above.
20. In this paper it is computed for the following commodities: cotton, corn, rice and soybeans.
21. The PPP exchange rate should not be used here as the effect of the overvaluation of the exchange rate was already accounted for above.
22. See also Rezende (1981) on this point.
23. See Helfand (1994) for an analysis of agrarian credit in Brazil.
24. See Najberg (1984) for an analysis of state credit to large industrial capitals.
25. However, during the 1980s (crucially the latter part), and the early 1990s, a large part of the Brazilian public debt in domestic currency, which had been generated in the process of keeping the currency undervalued, was significantly reduced through a sharp inflationary process. Being landowners and wage-earners net lenders to the financial sector and capital a net borrower, in its unity this policy constituted a net transfer of resources from the former two to the latter that more than compensated for the flows in the opposite direction during 1983–1987.
26. This is irrespective of how these profits are divided according to capital’s ownership.
27. For the estimation of the portion of ground-rent appropriated by landowners, see Grinberg (2011, 91--94).
28. This underestimates the real relationship between both variables because, as noted, total surpluses include the portion of ground-rent effectively appropriated by landowners.
29. It should be noted that the estimation presented here does not include the portion of the oil rent materialised in locally consumed commodities, which has grown strongly since the mid-2000s due to output and price increases. Being the state is the owner of oil lands, most of this rent has been directly or indirectly appropriated by capital. See Campodónico (2008, 41–45).