But, that still begs the question of what then determines this level of rent as being £100,000, rather than say £50,000, if it is no longer objectively grounded in a surplus profit resulting from the difference between market value and price of production? And, this seems to create a circular argument, because what then determines the price of the land as being £1 million rather than £2 million? The price of the land, as previously defined, is nothing more than capitalised rent, but if rent can no longer be objectively determined, neither can the price of land as capitalised rent!
When it comes to the price of any other commodity, it is a price of a given quantity of some use value, one coat, five kilos of potatoes etc. This price is objectively determined by the price of production. When it comes to a non-physical commodity, such as transport, the same law basically applies. In other words, it is objectively determined by the value/labour-time required to move a given use value from A to B, which sits at the heart of the price of production. Similarly, in terms of a labour service, such as the performance of an actor, or entertainer, it comes down directly to the amount of labour-time provided by the performer, and in terms of the price of production, of the capital advanced by the capitalist theatre owner etc.
When it came to the price of capital, the rate of interest, it was seen that, because capital has no value, it could not be a price based on labour-time, and the only measure of the use value that was being sold, was itself an amount of money. But, the rate of interest here, determined by supply and demand, was itself regulated by the rate of profit. On the one hand, as the rate of profit rises, it causes the demand for money-capital to also rise; on the other hand, as the increased rate of profit results in an increased mass of realised profits, it also increases the supply of potential money-capital.
But, the supply of money-capital is not only determined by this constant flow of realised profits. Alongside it, exists a large reservoir of existing money-capital, and as Marx describes, in more mature societies, the hoards of this potential money-capital are larger, as accumulated wealth becomes hoarded in this money form. As Engels describes in his Supplement to Capital Volume III, as the era of private capitalist production gives way to the era of socialised industrial capital, this intensifies, as the former active capitalists remove themselves from business activity and live off their accumulated money wealth, drawing dividends, and coupon interest from their shares and bonds.
And, Engels points out that this same process of the replacement of private capitalist property occurs in agriculture too.
“The same in the field of agriculture. The enormously expanded banks, especially in Germany under all sorts of bureaucratic names, more and more the holders of mortgages; with their shares the actual higher ownership of landed property is transferred to the stock exchange, and this is even more true when the farms fall into the creditors’ hands. Here the agricultural revolution of prairie cultivation is very impressive; if it continues, the time can be foreseen when England’s and France’s land will also be in the hands of the stock exchange.”
(Engels Supplement To Capital III)
In fact, even to this day, the large majority of landed property remains in the private hands of the old landed aristocracy, and around 90% of the UK's land area is still designated as rural rather than urban land. Yet, for the reasons described earlier, its easy to see why the owners of this landed property now come to see the revenue they obtain from this land as the equivalent of interest on their money-capital, and the land itself as just one form in which that money-capital can exist as a revenue producing asset.
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