“Regarding differential rent in general, it is to be noted that the market-value is always above the total price of production of the total quantity of products.” (p 660)
On the basis of the first example in Table 1, the 10 kilos sell at £60 per kilo or £600 in total. But, the price of production of these 10 kilos is only £24 per kilo or £240 for the 10 kilos. The market price is then 250% of the price of production for these 10 kilos.
If capitalism were abolished, and production was based on co-operative ownership, it is this price of £24 per kilo that would be the market price. The price of £60 per kilo arises, Marx says, precisely because of capitalism, and the determination of the market value as a result of competition, which requires that the price be £60, so that the least efficient producers make the average profit.
However, I am not convinced that this is correct for agriculture, any more than it is correct that the least efficient producers in any other industry must be able to obtain the average profit, and that is so precisely because of that competition.
If market prices, for the whole economy, were determined by the need for the least efficient producers, in each industry, to make average profits, it would be impossible for the total of prices to equal total values, which is a fundamental condition that must exist, Marx says, back in Chapter 9, in describing the transformation of values into prices.
I think that the approach to rent may have been better conducted on the same basis as was done in relation to interest. That is to consider the landlord as being the equivalent of the money-capitalist. Indeed, historically there has been a strong correlation between the two. Similarly, land would then be loaned, in the same way that money-capital is loaned. And rent, like interest, would simply be a market price, paid for this type of capital, for its use value, determined on the basis of supply and demand.
Later, in Chapter 47, Marx himself makes this connection. He writes,
“Finally, it should be noted in the transformation of rent in kind into money-rent that along with it capitalised rent, or the price of land, and thus its alienability and alienation become essential factors, and that thereby not only can the former peasant subject to payment of rent be transformed into an independent peasant proprietor, but also urban and other moneyed people can buy real estate in order to lease it either to peasants or capitalists and thus enjoy rent as a form of interest on their capital so invested; that, therefore, this circumstance likewise facilitates the transformation of the former mode of exploitation, the relation between owner and actual cultivator of the land, and of rent itself.”
As a form of fictitious capital, with a potential to self-expand, like money-capital, only as a result of being employed by productive-capital, what the capitalist farmer then buys is this use-value, for a given amount of time. Because different types of land have different use values, in this regard, because they have different levels of fertility, so these different types of land have different prices/rents.
The advantage of this approach is that it also does away with the division between Absolute Rent and Differential Rent. In this analysis, all cultivated land pays rent – as in reality it does – and it is only the amount of rent that differs, dependent on the use value provided by the particular land.
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