“He derives it not from the different fertility of pieces of land of the same size, but from the different position, [the different] distance from the market of pieces of land of equal fertility, which as we know is one element in differential rent.” (p 359)
But, Petty also recognised the other basis of Differential Rent, because he recognised that land with higher fertility produced a larger surplus value.
“Petty’s exposition of differential rent is therefore better than that of Adam Smith.” (p 360)
Petty thought that there must be some “natural par” between land and labour, so that in the same way that values can be expressed as so many pounds, or the same value as so many pence, a value could be expressed as so much land, or so much labour.
“Running alongside of each other through his work there are three ways of determining value:
a) The magnitude of value, determined by equal labour-time, labour being here considered as the source of value.
b) Value as the form of social labour. Hence money is the true form of value, although in other passages he knocks down all the illusions of the Monetary system. He is therefore defining the concept.
c) Labour as the source of exchange-value is confused with labour as the source of use-value; which presupposes material provided by nature (land). In fact, he “cuts” the “Par” between labour and land by describing the Fee-simple of the latter as capitalised rent—therefore not treating land as material provided by nature for concrete labour.” (p 361)
Petty would not have been impressed with the more recent idea that prices such as the rate of interest can be determined by government diktat. On the rate of interest, he wrote,
““Of the vanity and fruitlessness of making Civil Positive Laws against the Laws of Nature” (i.e., the laws arising from the nature of bourgeois production) “I have spoken elsewhere” (l.c., p. 29).” (p 361)
Petty also had some concept of Differential Rent II, that is of the surplus value rising as a result of rising labour productivity, due to the application of additional capital.
““If the said Shires by greater labour than now is used, (as by Digging instead of Ploughing, Setting instead of Sowing, picking of choice Seed instead of taking it promiscuously, steeping it instead of using it wholly unprepared, and manuring the ground with Salt instead of rotten Straw, etc.) could be fertilised, then will the Rent be as much more advanced, as the excess of increase exceeds that of the labour” (p. 32).” (p 361)
Petty recognised the need for some average value of labour, but rather than arriving at the idea of abstract labour, he remains constrained within the context of concrete labour, and a confusion between labour-power and labour. So, in determining the value of labour-power, he considers not the subsistence needs of any one worker, but the average taken out of the needs of 100 workers. But, the fact that this is then confused with the value produced by labour is shown by his comment,
““The days food of an adult Man, at a Medium, and not the days labour, is the common measure of Value, and seems to be as regular and constant as the value of fine Silver… Wherefore I valued an Irish Cabbin at the number of days food, which the Maker spent in building of it” (p. 65).” (p 362)
The solution, Marx says, to his search for this “common measure of value”, is in fact, provided by money, in the way Marx describes in Capital I. The money commodity acts as the universal equivalent form of value, and, therefore, the labour used in its production assumes the role of abstract labour.
Petty also had a concept of constant capital, although he describes it only as capital.
““What we call the Wealth, Stock, or Provision of the Nation, being the effect of the former or past labour, should not be conceived to differ from efficiencies in being” (p. 9).” (p 362)
He also recognised that it is labour that is productive, and that the application of capital only enhances this productivity.
““We said, That half the People by a very gentle labour, might much enrich the Kingdom…upon what shall they employ themselves. To which I answer in general, Upon producing Food and Necessaries for the whole People of the Land, by few hands; whether by labouring harder, or by the introducing the Compendium, and Facilitations of Art, which is equivalent to what men vainly hoped from Polygamy. For as much as he that can do the Work of five men by one, effects the same as the begetting four adult Workmen” (p. 22). “Cheapest food…will be when Food also is raised, by fewer hands than elsewhere” (p. 23).” (p 363)
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