Cooking the Books: Capitalism – an irrational system (2025)

The Cooking the Books column from the December 2025 issue of the Socialist Standard

‘Landowners see more profit in solar farms than growing crops’ read the title of an article in the Times (20 October).

‘The largest farm management company in Britain is cancelling 20 per cent of its contracts with landowners because it is becoming harder to make money from arable farming. Industry insiders fear soon-to-be-released farmland could be turned into solar parks, which gives landowners a greater return on their investment.’

Although only landowners can switch from having their land farmed to using it for solar parks, ‘landowners’ is not the entirely accurate word here as it could imply that the management company concerned (the Velcourt Group) is working with those who own the land; in fact, it is with those who farm it whether or not they own it. Some will be landowners who farm their land themselves; others will be tenant farmers who are paying rent to the landlord. So, the ‘returns’ in question are capitalist profits rather than rents paid to landowners.

Land is not used just for growing crops; it can also be used for raising livestock or for growing timber or for quarrying or mining (or, for that matter, for building houses and factories), depending on the land’s particular characteristics. The article was reporting that investing capital in arable land was, for various reasons, becoming less profitable and that the owners of Velcourt had therefore decided to cut back on their investment in that and to invest in other types of farming.

Capitalism, as an economic system, is based on the resources that society needs to survive being monopolised by a section only of society and being used to produce goods and services for sale with a view to making a profit. Decisions on what, where and how much to produce are made by capitalist enterprises, whether private or state owned, each seeking to make a profit. That, not to meet people’s needs, is the incentive to produce.

Under capitalism productive units do not primarily produce useful things (even if what they produce has to be useful to some person or body, otherwise it wouldn’t sell); what they are essentially doing is seeking to increase the value of the capital they invested in them by making a profit. If those who control the deployment of capital consider that they can make a bigger profit from investing in some other activity than the particular one they have been investing in, they will withdraw from that and invest in the other.

So it is quite in accordance with the logic and imperatives of capitalism that a capitalist enterprise such as Velcourt should cut back on its investment in an activity that is no longer making enough profit or whose future profit-making is not bright. It is equally logical that the owners of the land should look for other ways of using their land so as to get ‘a greater return’ even if this has nothing to do with agriculture. That’s the way the capitalist economy works.

The change from one line of production to another doesn’t reflect a change in real demand for something, only changes in paying demand. Given that under capitalism about 20 percent of paying demand comes from capitalist enterprises in search of profit — and that that is what drives the economy — and that the smaller your monetary income the less your real needs are taken into account, what results is an irrational use of resources in the sense of not meeting everyone’s needs.