## Thursday, 21 July 2016

### Capital III, Chapter 40 - Part 4

Marx then says,

“The output from D would now be = 4 + 1 + 3 + 2 = 10 qrs whereas formerly it was = 4 qrs. But the price per quarter as regulated by B would have fallen to £1½. The difference between D and B would be = 10 - 2 = 8 qrs, at £1½ per quarter = £12, whereas the money-rent from D was previously = £9. This should be noted. Calculated per acre, the magnitude of rent would have risen by 33⅓% in spite of the decreasing rate of surplus-profit on the two additional capitals of £2½ each.” (p 679)

So, in terms of the cost of production, on land type D, the surplus profit has fallen from £9 to £3. However, from the perspective of the landlord, this land now produces 10 Kilos rather than the 4 Kilos it produced previously, and it, thereby produces 8 Kilos more than the now rentless land type B. On this basis, the landlord would charge a rent based on these additional 8 Kilos, i.e. 8 x £1.50 - £12, a rent increase of 33.3%.

“From a certain point of view — as concerns both output and prices of production — the productivity of labour has risen. But from another point of view, it has decreased because the rate of surplus-profit and the surplus-product per acre decrease for the various investments of capital in the same land.” (p 680)

If there was falling marginal productivity of capital, and additional investments could only be made in the worst soil, type A, this would mean productivity would fall, and the price of production would rise. For example, if an additional £2.50 were invested in A, but it only resulted in an additional 0.5 Kilos being produced, the price of production of these 1.5 Kilos would be £5 plus 20% average profit = £6. That is £4 per Kilo, a rise of 33.3%.

“Every decrease in productivity with a growing investment of capital would here mean a relative decrease in output per acre, whereas upon superior soils it would only signify a decrease in the superfluous surplus-product.” (p 680)