Theories of Surplus Value, Part II, Chapter 12 - Part 23

Table A

Class	C Capital £'s	T Output Tons	TV Total Value £'s	MV Market-Value £'s Per Ton	IV Individual Value £'s per Ton	DV Differential Value £'s per Ton	CP Cost-Price (price of production) £'s per ton	AR Absolute Rent £'s	DR Differential Rent £'s	AR in T Absolute Rent in Tons	DR in T Differential Rent in Tons	TR Total Rent £'s	TR in T Total Rent in Tons
I	100	60	120	2.00	2.00	0	1.833	10	0	5	0	10	5
II	100	65	130	2.00	1.846	0.153	1.692	10	10	5	5	20	10
III	100	75	150	2.00	1.600	0.400	1.466	10	30	5	15	40	20
Total	300	200	400					30	40	15	20	70	35

As a result of the introduction of Land IV, the total 200 tons of supply can be produced with only £250 rather than £300 of capital. The total value of output has fallen from £400 to £369.231. Because land type I has gone out of production, type II now sets the market value, which falls from £2 per ton to £1.846 per ton. But, the total rent in Table B rises to £94.230, as against £70 in Table A.

Table B

Class	C Capital £'s	T Output Tons	TV Total Value £'s	MV Market-Value £'s Per Ton	IV Individual Value £'s per Ton	DV Differential Value £'s per Ton	CP Cost-Price (price of production) £'s per ton	AR Absolute Rent £'s	DR Differential Rent £'s	AR in T Absolute Rent in Tons	DR in T Differential Rent in Tons	TR Total Rent £'s	TR in T Total Rent in Tons
II	50	32.5	60	1.846	1.846	0	1.692	5	0	2.708	0	5.000	2.708
III	100	75	138.461	1.846	1.600	0.246	1.466	10	18.461	5.250	10	28.461	15.416
IV	100	92.5	170.769	1.846	1.297	0.548	1.189	10	50.769	5.416	27.50	60.769	32.916
Total	250	200	369.230					25	69.230	13.541	37.50	94.230	51.041

The reason can be broken down as follows. Firstly, in terms of absolute rent, the rate remains the same. Each pays at a rate of 10%. Land type I no longer pays rent, but its rent has been replaced by the absolute rent of Land IV. Land II pays £5 absolute rent, because it now only employs £50 of capital, rather than £100. In total, therefore, there is a reduction of £5 of absolute rent. This is what would be expected from the laws already outlined. The absolute rent is the result of the difference in productivity/organic composition of capital in agriculture/primary production compared to the rest of the economy. As a result of the more efficient land type IV that difference has been reduced.

The total rent rises, therefore, as a result of a rise in the amount of differential rent. Land I paid no differential rent, so none is lost from there as a result of its leaving production. Type II previously paid £10, but now pays none, because it determines the market value of output, and makes no surplus profit. Land type III paid £30, but its surplus profit has fallen with the fall in the market value. It now pays £18.462. The total fall in rent then is £15 in absolute rent (£10 I, plus £5 II), but land type IV pays £10 of absolute rent, leaving a net deficit of £5. The total fall in differential rent is £10 II, £11.538 III = £21.538, giving a total fall of £26.538.

The rise in total rent in Table B, compared to Table A, is £24.231. That means that a total of £26.538 + £24.231 = £50.769 must be accounted for, and that is exactly the differential rent paid by land type IV.

“The least fertile class has been removed entirely and yet the rental rises because, due to its relatively great fertility, the differential rent of IV alone is greater than the total differential rent of A had been previously. Differential rent does not depend on the absolute fertility of the classes that are cultivated for 1/2 II, III, IV [B are] more fertile than I, II, III [A], and yet the differential rent for 1/2 II, III, IV [B] is greater than it was for I, II, III [A] because the greatest portion of the product—92 1/2 tons—is supplied by a class whose differential value is greater than that occurring in I, II, III A.” (p 291)

The significance of the proportion of the total supply provided by the most fertile land can then be seen. On the one hand, the differential value of production on land IV depends on the difference between its individual price of production and the market value. But, the amount of surplus profit then depends upon the total output from that land type. In this case, the differential value was £0.548, whilst its output was 92.5 tons, giving a total of £50.69.

“When the differential value for a class is given, the absolute amount of its differential rent naturally depends on the amount of its product. But this amount itself is already taken into account in the calculation and formation of the differential value. Because with £100, IV produced 92 1/2 tons, no more and no less, its differential value in B where the market-value is £1 16 12/13s. per ton, amounts to 10 470/481s. per ton.” (p 291)

The rate of rent rises in Table B compared to A from £70 on £300 = 23.33%, to £94.231 on £250 = 37.69%.

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