Theories of Surplus Value, Part II, Chapter 12 - Part 28

If the composition of capital, in agriculture, were 50 c + 50 v, the value of its output would be 50 + 50 + 25 = 125. That means that, instead of being 10 above the price of production, it would now be 15 above it. Similarly, if the composition were 70 c + 30 v, the value of output would be 115, which would be only 5 above the price of production. Considering this, in relation to the tables, it would mean that, in Table A, the price per ton, for Mine I, would be £2.166. In Table A, I determines the market value. But, the price of production for I would still be £1.833 per ton, as before (Price of production is £100 capital plus 10% average profit = £110, which for 60 tons of output = £1.833 per ton). It continues to invest the same amount of capital; the average rate of profit is unchanged; and it continues to produce the same amount of output.

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

In Table A, the 292.5 tons of total output can all be sold at a market price of £1.833, equal to the price of production of I (Individual Price of Production £110/60 tons = £1.833 per ton). A different organic composition of capital, therefore, makes no difference in this case to that, but it does make a difference to the level of absolute rent, raising it by 50%, where the composition falls to 50:50, and reducing it where the organic composition rises to 70:30.

In the case of Table D, these changes have no impact on I, because the introduction of the new supply makes it impossible for I to pay absolute rent.

Table D

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	110	1.833	2.000	- 0.166	1.833	0.	0	0	0	0	0.
II	100	65	119.166	1.833	1.846	- 0.012	1.692	9.166	0	5.000	0	9.166	5
III	100	75	137.500	1.833	1.600	0.219	1.466	10	17.500	5.454	9.545	27.500	15
IV	100	92.5	169.583	1.833	1.297	0.540	1.189	10	49.583	5.454	27.045	59.583	32.50
Total	400	292.5	536.250					29.166	67.083	15.909	36.590	96.25	52.50

The same is true if the composition of agricultural land is held at 60:40, but its assumed that the composition of industrial capital changes. If it becomes 70:30, then the price of production rises to 115 from 110. In that case, the difference with the value of agricultural output falls to 5 from 10. If the composition rises to 90:10 then the price of production falls to 105, and the difference with the value of agricultural production rises to 15. The impact on the level of absolute rent is then to cause it to fall in the first case, and to rise in the second. 

“All this would therefore be of no consequence to I D, however important it may continue to be for tables A, B, C, and E, i.e., for the absolute determination of the absolute and differential rent, whenever the new class— be it in the ascending or the descending line—only supplies the necessary additional demand at the old market-value.” (p 299)

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