“The best proof of this is that it does not reappear for the slave-holder or the landowner except when he, in turn, sells his slaves or land.” (p 809)
However, this is not quite true. The difference between a slave and a piece of land is that the slave has value whereas the land does not. The slave is a product of labour, just as is a pack animal or a machine, whereas a piece of land is not. A slave requires the expenditure of labour-time for the production of food etc. needed for their reproduction, just as does any other element of constant capital. As such, the slave here represents another piece of fixed capital, whose value is transferred piecemeal to the end product, as wear and tear, just as with the wear and tear of a machine or pack animal.
As Marx puts it in the Grundrisse,
“In production based on slavery, as well as in patriarchal agriculture…..the slave does not come into consideration as engaged in exchange at all.” (p 419)
and “in the relations of slavery and serfdom….The slave stands in no relation whatsoever to the objective conditions of his labour; rather, labour itself, both in the form of the slave and in that of the serf, is classified as an inorganic condition of production along with other natural beings, such as cattle, as an accessory of the earth.” (p 489)
The price paid for a slave, therefore, should be no different to the price paid for any other pack animal or machine.
The more appropriate comparison, therefore, is with the purchase of a bond or a share.
“The circumstance that the rent produced by a real investment of capital in this land is calculated by the new landowner as interest on capital which he has not invested in the land, but given away to acquire the land, does not in the least alter the economic nature of the land factor, any more than the circumstance that someone has paid £1,000 for 3% consols has anything to do with the capital out of whose revenue the interest on the national debt is paid.
In fact, the money expended in purchasing land, like that in purchasing government bonds, is merely capital in itself, just as any value sum is capital in itself, potential capital, on the basis of the capitalist mode of production. What is paid for land, like that for government bonds or any other purchased commodity, is a sum of money. This is capital in itself, because it can be converted into capital. It depends upon the use put to it by the seller whether the money obtained by him is really transformed into capital or not. For the buyer, it can never again function as such, no more than any other money which he has definitely paid out.” (p 809)
This is another reason that the TSSI formulation, of using historic prices, as the basis of calculating the rate of profit, is wrong, because the historic price is simply a sum of money that, as soon as it was paid, ceased to be capital for the buyer.
“It figures in his accounts as interest-bearing capital, because he considers the income, received as rent from the land or as interest on state indebtedness, as interest on the money which the purchase of the claim to this revenue has cost him.” (p 809)
But, as Marx previously set out, this interest-bearing capital is entirely fictitious. It is not the money-capital laid out that somehow is transformed into a greater capital value, but only the productive-capital into which it has metamorphosed. In fact, as Marx points out, it is impossible for money-capital to self-expand.
“In the case of small landed property the illusion is fostered still more that land itself possesses value and thus enters as capital into the price of production of the product, much as machines or raw materials.” (p 810)
That is because land is bought and sold as with any other commodity, and the price of this land, which must be bought before any production can take place, therefore, forms a significant element of the cost of production that must be met before any profit can be achieved.
Yet, all of the previous analysis has demonstrated that rent, like interest on loanable money-capital, is a deduction from surplus value. It is not value adding. The rent, or price of land, therefore, does not increase agricultural prices, it simply diminishes the amount of surplus value in the hands of the producer, and transfers it to the hands of the landlord or the seller of the land.
“The expenditure of money-capital for the purchase of land, then, is not an investment of agricultural capital. It is a decrease pro tanto in the capital which small peasants can employ in their own sphere of production. It reduces pro tanto the size of their means of production and thereby narrows the economic basis of reproduction. It subjects the small peasant to the money-lender, since credit proper occurs but rarely in this sphere in general. It is a hindrance to agriculture, even where such purchase takes place in the case of large estates. It contradicts in fact the capitalist mode of production, which is on the whole indifferent to whether the landowner is in debt, no matter whether he has inherited or purchased his estate. The nature of management of the leased estate itself is not altered whether the landowner pockets the rent himself or whether he must pay it out to the holder of his mortgage.” (p 810)
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