Wednesday, 3 August 2016

II. Decreasing rate of productivity of the additional capital.

As with the situation where there is constant marginal productivity of capital, the price of production here can only fall where land type A is taken out of production. That could be because it is used for some other purpose, or because output from the other land types expands, so that it is no longer required. In all these cases;

“It was shown that the rent in grain and money per acre may increase, decrease, or remain unchanged.” (p 701)

Table 8

 Type of Soil Ha. Capital £ Profit £ Price of Production. per Kilo Output Kilos Grain-Rent Kilos Money-Rent £'s Rate of Surplus Profit A 1 2.50 0.50 3.00 1 0 0 0 B 1 2.50 0.50 1.50 2 1 3.00 120% C 1 2.50 0.50 1.00 3 2 6.00 240% D 1 2.50 0.50 0.75 4 3 9.00 360% Total 4 10.00 2.00 1.20 10 6 18.00 180%
If increased output eliminates land type A, we get,

Table 9

 Type of Soil Ha. Investment of Capital £ Profit £ Output Kilos Selling price £ Proceeds £ Grain-Rent Kilos Money-Rent £ Rate of Surplus Profit B 1 2.50 + 2.50 1.00 2 + 1.50 = 3.50 1.71 6.00 0 0 0 C 1 2.50 + 2.50 1.00 3+2=5 1.71 8.55 1.50 2.57 51.40% D 1 2.50 + 2.50 1.00 4 + 3.50 = 7.50 1.71 12.83 4.00 6.84 136.8% Total 3 15.00 3.00 16.00 1.71 27.43 5.50 9.41 62.73%
The rate of surplus profit given here is different to that cited by Marx in Table V on page 702, because the calculation there appears to be wrong, or at least inconsistent with the calculation in Table IV. In the latter the rate of surplus profit is calculated as Money rent of £18 divided by total capital advanced of £10, giving a rate of 180%. Using this same basis, the rate of surplus profit for Table V is money-rent of £9.41 divided by total capital advanced of £15, which gives a rate of surplus profit of 62.73%.

“Here, at a decreasing rate of productivity of the additional capital, and a varying decrease for the various soil types, the regulating price of production has fallen from £3 to £1 5/7. The investment of capital has risen by one-half-from £10 to £15. The money-rent has fallen by almost one-half-from £18 to £9 3/7, but the grain-rent has fallen by only 1/12 — from 6 qrs to 5½ qrs. The total output has risen from 10 to 16, or by 60%. The grain-rent constitutes a little more than one-third of the total product. The advanced capital is to the money-rent as 15:9 3/7, whereas formerly this ratio was 10:18.” (p 703)