Thursday, 30 June 2016

Capital III, Chapter 37 - Part 14

Money-rent can only develop with commodity production, which brings about the creation of money.

“In so far as commodity-production and thus the production of value develops with capitalist production so does the production of surplus-value and surplus product. But in the same proportion as the latter develops, landed property acquires the capacity of capturing an ever-increasing portion of this surplus-value by means of its land monopoly and thereby, of raising the value of its rent and the price of the land itself.” (p 638)

To the extent that commodity production brings about the separation of agricultural and industrial production, the industrial commodities can only be bought with money, as can the increasing volume of imported commodities, being offered up by merchant capital. In order to obtain these commodities, therefore, the landlords require their rent in money form.

This increase in the size of the market and with it the surplus product, brings with it an increase in rent completely independent of any action by the landlord.

“This is the characteristic peculiarity of his position, and not the fact that the value of the products of the land, and thus of the land itself, increases to the degree that the market for them expands, the demand grows and with it the world of commodities which confronts the products of the land — in other words, the mass of non-agricultural commodity producers and non-agricultural commodity-production. But since this takes place without any action on his part, it appears to him as something unique that the mass of value, the mass of surplus-value, and the transformation of a portion of surplus value into ground-rent should depend upon the social production process, on the development of commodity-production in general.” (p 638)

Marx cites Patrick Dove (The Elements of Political Science, p 279), who from this basis tried to explain rent on the basis of the value of the agricultural product rather than its mass. But, Marx points out that this depends on the mass and productivity of the non-agricultural population.

Referring back to his previous comments, Marx notes,

“But it is also true of every other product that it can only develop as a commodity partly as the mass and partly as the variety of other commodities which form equivalents for it increase. This has already been demonstrated in connection with the general presentation of value. [English edition: Vol. I, p. 88. — Ed.] On the one hand, the exchangeability of a product in general depends on the multiplicity of commodities existing in addition to it. On the other hand, on it depends in particular the quantity in which this product can be produced as a commodity.” (p 638)

No individual producer can produce commodities, and, therefore, exchange value in isolation, because a commodity is only a commodity if it has been produced for the purpose of exchange or sale, and its exchange value is determined in that process. This is true whether the commodity is industrial or agricultural. And, as Marx demonstrates, later, in Theories of Surplus Value, the proportionality referred to earlier, between these different types of commodities that are brought together to exchange with each other, depends upon the level of productivity in each sphere. 

“Therefore, if, on the one hand, surplus-value or, still more narrowly, the surplus-product in general is explained instead of rent, the mistake is made, on the other hand, of ascribing exclusively to agricultural products a characteristic which belongs to all products in their capacity as commodities and values. This is vulgarised still more by those who pass from the general determination of value over to the rea1isation of the value of a specific commodity. Every commodity can realise its value only in the process of circulation, and whether it realises its value, or to what extent it does so, depends on prevailing market conditions.” (p 639)

This is a mistake made today by those Marxist economists who ignore the question of adequate demand for produced commodities, and thereby implicitly accept the principles of Say's Law. As Marx demonstrates in Theories of Surplus Value, there is no reason that two industries with divergent levels of productivity should be able to continue to find a market one in the other. 

“By the way, in the various branches of industry in which the same accumulation of capital takes place (and this too is an unfortunate assumption that capital is accumulated at an equal rate in different spheres), the amount of products corresponding to the increased capital employed may vary greatly, since the productive forces in the different industries or the total use-values produced in relation to the labour employed differ considerably. The same value is produced in both cases, but the quantity of commodities in which it is represented is very different. It is quite incomprehensible, therefore, why industry A, because the value of its output has increased by 1 per cent while the mass of its products has grown by 20 per cent, must find a market in B where the value has likewise increased by 1 per cent, but the quantity of its output only by 5 per cent. Here, the author has failed to take into consideration the difference between use-value and exchange-value. (Theories of Surplus Value, Part 3)

Agricultural commodities develop and confront industrial commodities, therefore, in no different way than one industrial commodity confronts another. The development of a market for one commodity, necessarily implies the development of the market for the other, and the maintenance of the right proportion between the two.

But, that proportion is a function of the mass of each not the value, because although the supply of each is a function of value, the demand for each is a function of use value.

“The singularity of ground-rent is rather that together with the conditions in which agricultural products develop as values (commodities), and together with the conditions in which their values are realised, there also grows the power of landed property to appropriate an increasing portion of these values, which were created without its assistance; and so an increasing portion of surplus-value is transformed into ground-rent.” (p 639)

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