Monday, 26 September 2016

Capital III, Chapter 47 - Part 25

Marx is right, however, that the price of land, and with it rent, acts as a limitation of production. But, the same is true of interest, as a price of loanable money-capital. Neither interest nor rent are value adding, but they do form a part of the cost of production, and thereby reduce surplus value. They reduce the amount of value/social labour-time that can be allocated to increasing productive capacity, because they represent a diversion of that value away from capital to revenue, i.e. they finance the unproductive consumption – including speculation - of the rentier, be they a landowner or owner of loanable money-capital.

However, the question for a post-capitalist society would still be whether these prices fulfilled, at least in the transitional period, a useful function in ensuring a rational allocation of resources. We have seen repeatedly that where interest rates are low, this leads to malinvestment of capital, as well as speculation.

The latter may be avoided or reduced in a transitional economy, but there is no reason to believe the former would be. Similarly, if land were free, the same question arises of determining which of all the contending alternative uses for any piece of land, provide the greatest benefit.

In a fully planned economy, that question still needs to be addressed, because its use for one function precludes its use for all others, and some means of comparing costs with benefits, value against use value is still required.

It may still, in the transitional period, where commodity production continues, undertaken by numerous worker-owned co-operative enterprises, be required to retain such prices, but for all rent and interest to be paid into a central fund, initially in the hands of a co-operative federal holding company, and later the hands of the workers' semi-state. In that way, these prices can continue to play a role in preventing misallocation of capital, but the value itself can be accumulated and used for productive investment.

No comments: