Theories of Surplus Value, Part II, Chapter 8 - Part 17

It is not the private ownership of the land, water and so on, or the things on or in it, which is the source of value. Value is labour, and if value is labour, surplus value cannot be land. Surplus value can only be surplus labour, labour performed over and above necessary labour. But, similarly, therefore, land cannot be the source of any surplus profit over and above the surplus value.

“This ownership is, however, a source of revenue. It is a claim, a means, which in the sphere of production that the property enters as a condition of production enables the owner to appropriate that part of the unpaid labour squeezed out by the capitalist which would otherwise be tossed into the general capital fund as excess over normal profit.” (p 42)

And, it is this ownership of the land which results not in any additional value, but in the landowner being able to claim a portion of the surplus value produced by the agricultural capital, i.e. to claim that portion of surplus value in excess of what is required to produce the average profit. The rent, like interest, is not an additional cost of production increasing the value of the commodity, but is rather a deduction from the surplus value produced by the capital.

“In this way landed property, like capital, constitutes a claim to unpaid labour, gratis labour. And just as with capital, the worker’s materialised labour appears as a power over him, so with landed property, the circumstance which enables the landowners to take part of the unpaid labour away from the capitalists, makes landownership appear as a source of value.” (p 42)

This is the explanation of ground-rent. With a given investment of capital, the variation in rent between different pieces of land can only be explained by the different level of the fertility of the two pieces of land (Differential Rent I). If the fertility of two pieces of land is the same, then the variation in rent between them can only be explained by the difference in the capital employed on the land (Differential Rent II).

“In the first case, rent rises because its rate increases in proportion to the capital employed (also according to the area of the land). In the second case, it rises because with the same or even with a different rate (if the second dose of capital is not equally productive) the amount of rent increases.” (p 43)

It doesn't matter whether the least fertile land produces rent, because the differential rent always exists over and above it. The fertility here relates to the same product. It is always possible that a piece of land, used for one purpose, may produce a greater value and profit if used for some alternative purpose.

“Rent as calculated on the land itself is the rental, the amount of rent. It can rise without an increase in the rate of rent.” (p 43)

In other words, rental is the rent per hectare, or other area of land. The amount of rent collected can rise if either this rental rises or alternatively if the number of hectares producing rent increases. As Marx shows, in Capital III, its possible that the rental may decline, and yet the total rent rise, even if the amount of land producing rent remained the same or even falls. All that is required is that the proportion of land producing higher rentals increases as a proportion of the total, so that the average rental rises.

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