Saturday 9 July 2016

Capital III, Chapter 39 - Part 8

Marx then considers another scenario, where the progression is not linear from best to worst or vice versa, but a combination of the two.

Suppose the worst soil, A, is being farmed. Demand rises to 17 kilos, from its previous 10 kilos. This additional 7 kilos is supplied by various means. Firstly, it might be that land A is replaced by some other slightly more fertile land, or else, that, as a result of its continuing cultivation etc. its own fertility is increased.

Either way, we can assume that land type A now produces 1.33 kilos of wheat, as opposed to its original 1 kilo. In addition, another type of land, A', more fertile than A, but less fertile than B, is introduced, which produces 1.66 kilos.

Similarly, new types B', and B'' are introduced, producing 2.33 and 2.66 kilos respectively. The fertility and output of B, C and D remains unchanged.

Rather than moving in a straight line, from A to D, or vice versa, the process involves moves forwards and backwards.

If A produces 1.33 kilos, at a price of production of £60, the market price of a kilo falls, from £60 per kilo to to £45 per kilo (£60/1.33 kilos), a fall of 25%. In order to make available the additional supply, A' is brought in, which is more fertile than A, but not as fertile as B, so it is neither a linear progression to the worst or best soil. Similarly, B' and B'', are more fertile than A, A', and B, but not as fertile as C or D.

At this lower price, the rent in B, C and D falls, and the total money rent also falls, from £360 to £345. But, because the price of wheat has fallen, this rent represents a greater quantity, 7.66 kilos, as opposed to 6 kilos.

Although the amount of money rent has fallen, the quantity of land in cultivation has risen, and the amount of land on which rent is levied has also now increased.

A's profit remains the same at £10 per kilo, which is 20% on the capital invested. But, at the lower price of wheat, this represents a greater quantity of wheat than previously. Moreover, as noted before, because the price of wheat is lower, the value of labour-power falls, and the rate of surplus value rises. The general rate of profit, thereby also rises, but, at the same time, the relative price of constant capital to wheat rises.

Type of Soil
Product
Capital Invested
£'s
Profit
Rent
Price of Production per Kilo
£'s
Kilos
£'s
Kilos
£'s
Kilos
£'s
A
A'
B
B'
B"
C
D
1.33
1.66
2.00
2.33
2.66
3.00
4.00
60.00
75.00
90.00
105.00
120.00
135.00
180.00
50.00
50.00
50.00
50.00
50.00
50.00
50.00
0.22
0.56
0.89
1.22
1.56
1.89
2.89
10.00
25.00
40.00
55.00
70.00
85.00
130.00

0.33
0.66
1.00
1.33
1.66
2.66

15.00
30.00
45.00
60.00
75.00
120.00
45.00
36.00
30.00
25.71
22.50
20.00
15.00
Total
17.00
765.00
350.00
9.23
480.00
7.66
345.00


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