Theories of Surplus Value, Part II, Chapter 8 - Part 61

Unfortunately, some modern economists who see the Law of the Tendency for the Rate of Profit to Fall as being the cause of crises of overproduction, also follow Ricardo in failing to make this distinction in relation to the two opposite causes of a fall in the rate of profit. They see all falls in that rate as a manifestation of the Law without investigating the actual basis of that fall.

Marx also notes here that the difference in agricultural and industrial prices cannot be explained by changes in the value of money, because any such change in the value of money would affect agricultural and industrial prices equally.

“If money fell by 50 per cent then l quarter which was previously worth £3 would now be worth £6, but 1 lb. yarn which was previously worth 1s. would now be worth 2s. The absolute rise in the money prices of agricultural products compared with industrial products can therefore never be explained by changes in [the value of] money.” (p 109)

In pre-capitalist modes of production, Marx says, agriculture could be assumed to be more productive than industry. That is because nature assists the agricultural production process. By contrast, in handicraft industry, it is human labour that must do all the work of providing energy, motive power and the mechanism of transformation of matter from one form to another. Seed grows into flax largely due to the nutrients in the soil, the rain that falls on the soil, and the sun which provides energy to the plant. But, flax is only turned into linen as a result of the spinner converting it into yarn, and then the weaver converting the yarn into linen.

“In the period of the stormy growth of capitalist production, productivity in industry develops rapidly as compared with agriculture, although its development presupposes that a significant change as between constant and variable capital has already taken place in agriculture, that is, a large number of people have been driven off the land.” (p 110)

So, during this period, industry then overtakes agriculture, in terms of productivity. For one thing, industry is itself able to harness the transformative power of nature, when production is undertaken on this larger scale. The power of water and wind provides energy to replace human and animal power to drive machines, and later steam and electric do the same.

But, as Marx pointed out earlier, this is an historical difference that can also disappear.

“Later, productivity advances in both, although at a uneven pace. But when industry reaches a certain level the disproportion must diminish, in other words, productivity in agriculture must increase relatively more rapidly than in industry. This requires: 1. The replacement of the easy-going farmer by the businessman, the farming capitalist; transformation of the husbandman into a pure wage-labourer; large-scale agriculture, i.e., with concentrated capitals. 2. In particular however: Mechanics, the really scientific basis of large-scale industry, had reached a certain degree of perfection during the eighteenth century. The development of chemistry, geology and physiology, the sciences that directly form the specific basis of agriculture rather than of industry, does not take place till the nineteenth century and especially the later decades.” (p 110)

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