Sunday 28 January 2018

Theories of Surplus Value, Part II, Chapter 12 - Part 30

Marx describes this situation by examining the scenarios set out in Table C. If the starting position is that of IV, then III-I cannot compete with it, if the market value is £1.846. If only 92.5 tons are required, IV can supply all of these on its own. IV invests £100 of capital to produce these 92.5 tons. The value of these 92.5 is then £120, or £1.297 per ton.

Table C
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
110.769
1.846
2.000
- 0.153
1.833
0.769
0
0.416
0
0.769
0.416
II
100
65
120.000
1.846
1.846
0
1.692
10
0
5.416
0
10
5.416
III
100
75
138.461
1.846
1.600
0.246
1.466
10
18.461
5.416
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
400
292.5
540.000




30.769
69.230
16.666
37.50
100
54.166

That value is below the price of production for III – I. So, IV can sell all of its output at its value, and it will thereby produce a surplus profit of £10, which constitutes the absolute rent. That situation would change if demand rose above 92.5 tons, at a price of £1.297 per ton. In that case, IV could not satisfy all of the demand, which would mean that III could enter production. Similarly, assuming demand remains constant, if III attempted to enter production, their additional supply would represent overproduction, and the market price would fall, possibly wiping out any profit for III altogether.

Suppose there is just one class of land, Marx says. In that case, there is no differential rent. If there is unlimited land, relative to the capital and labour that seeks to use it, and if there is no landed property, then there is also no absolute rent. If the value of agricultural output is 60 c + 40 v + 20 s = £120, whilst the average rate of profit is 10%, so that the price of production is £110, capital will migrate to agricultural production in search of this higher rate of profit. The supply of agricultural commodities would then rise, and the market price of those commodities would fall as supply then exceeded demand. Capital would continue to to migrate into agriculture, so long as the surplus profits existed. Supply would continue to rise, and market prices fall until they reached the price of production of £110, at which point only average profits are made. In that case, there would be no rent at all.

“This is a tautology. For the existence of absolute rent not only presupposes landed property, but it is the posited landed property, i.e., landed property contingent on and modified by the action of capitalist production. This tautology in no way helps to settle the question, since we explain that absolute rent is formed as the result of the resistance offered by landed property in agriculture to the capitalist levelling out of the values of commodities to average prices. If we remove this action on the part of landed property—this resistance, the specific resistance which the competition between capitals comes up against in this field of action—we naturally abolish the precondition on which the existence of rent is based.” (p 301) 

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