Tuesday 19 June 2018

Theories of Surplus Value, Part II, Chapter 16 - Part 26

If a new capital engaged in this production, with only £100, as was the case initially, moreover, it would be able to buy physically less seed, and labour-power, than a capital of £100 could previously achieve. This is why Marx set out in Capital II, that the circuit M – C...P...C` - M`, only applies to such new investments of money-capital, whereas for all existing capital, the circuit is rather P...C` - M`. M – C...P. 

In other words, every existing capital starts its circuit with a quantity of productive-capital, and the value of that capital (its current reproduction cost) is thereby reproduced, in the value of its output, and in this context, the M in this circuit represents only the money equivalent of the current value of the commodities consumed in the production process.  As Marx puts it, money here only acts as a unit of account.

If previously £100 bought 60 tons of seed, and 40 workers, but now the price of seed rises, less seed can be bought, but also less labour-power. So, maybe only 45 tons of seed and 30 workers are employed. But, for this new capital, the 30 workers will now produce only 75% of the new value that previously 40 workers produced, and they will produce proportionately less surplus value too. 

“The actual product, however, like the surplus-value, depends on the number of workers employed by the capital, when the productivity is given. This is overlooked by Ricardo. He also ignores the manner in which the rent is formed: not only by transforming surplus-value into rent, but also capital into surplus-value. Of course this is only an apparent transformation of capital into surplus-value. Each particle of surplus-produce would represent surplus-value or surplus-labour, if the market-value were determined by the value of the product of III etc. Ricardo, moreover, only considers that in order to produce the same volume of product, more labour has to be employed, but disregards the fact that with the same capital, an ever diminishing quantity of living labour is employed, of which an ever greater part is necessary labour and an ever smaller part surplus-labour, and this is the decisive factor for the determination of both the rate of profit and the quantity of product produced.” (p 458) 

Even assuming that there is only differential rent, therefore, Marx concludes, Ricardo has gone no further forwards in explaining rent than his predecessors. 

“His important achievement in this field is, as De Quincey pointed out, the scientific formulation of the question. In solving it Ricardo accepts the traditional views. 

Namely : 

“The innovation that Ricardo introduced into the theory of rent, is that he resolves it into the question whether it really invalidates the law of value.” (Thomas de Quincey, The Logic of Political Economy, Edinburgh and London, 1844, p. 158.) 

On page 163 of the same work, De Quincey says further: 

“Rent is […] that portion of the produce from the soil (or from any agency of production) which is paid to the landlord for the use of its differential powers, as measured by comparison with those of similar agencies operating on the same market.” 

Furthermore on page 176: 

The objections against Ricardo are that the owners of No, 1 will not give it away for nothing. But in the period (this mythical period), when only No, 1 is being cultivated “no separate class of occupants and tenants distinct from the class of owners can have been formed”. 

So according to De Quincey this law of landownership [is valid] so long as there is no landownership in the modern sense of the word.” (p 459) 

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