Theories of Surplus Value, Part II, Chapter 13 - Part 13

This table is a summary of the tables setting out each of these scenarios, for each type of land.

[Class]	Capital £	Kilos	Total value TV £	Market value MV per Kilo	[Individual value] IV per Kilo	[Differential value] DV per Kilo	Cost-price per Kilo	[Absolute rent] AR Kilos	[Differential rent] DR £	[Absolute rent] AR £	[Differential rent] DR Kilos	Rental £	Rental Kilos	[Composition of capital and rate of absolute value]
A
I	100.00	60	120.00	2.00	2.00	0	1.83	10	0	5.00	0	10.00	0	60 c + 40 v for [a non-industrial capital of £100]
II	100.00	65	130.00	2.00	1.85.	0.15	1.69	10	10.00	5.00	5	20.00	10	80 c + 20 v for an industrial capital of [£100]
III	100.00	75	150.00	2.00	1.60	0.40	1.47	10	30.00	5.00	15	40.00	20	Absolute rent 10 percent
Total	300.00	200	400.00					30	40.00	15.00	20	15.00	35	20
B
I	90.00	60	108.00	1.80	1.80	0	1.65	9	0	5.00	0	9.00	5	54 c + 36 v for £90
II	90.00	65	117.00	1.80	1.66	0.14	1.52	9	9.00	5.00	5	18.00	10	60 c + 40 v for £100
III	90.00	75	135.00	1.80	1.44	0.36	1.32	9	27.00	5.00	15	36.00	20	Absolute rent 10 percent
Total	270.00	200	360.00					27	36.00	15.00	20	63.00	35
C
I	86.40	60	102.60	1.71	1.71.	0	1.58	7.56	0	4.42	0	7.56	4.42	54 c + 32.40 v for £86.40
II	86.40	65	111.15	1.71	1.58	0.13	1.46	7.56	8.55	4.42	[5]	16.11	9.42	62.50 c + 37.50 v for £100
III	86.40	75	128.25	1.71	1.37	0.34	1.27	7.56	25.65	4.42	[15]	33.21	19.42	[Capital] £100=[value of the product] £118.75. Hence absolute rent 8.75%
Total	259.20	200	342.00					22.68	34.20	13.26	20	56.88	33.26
D
I	90.00	60	110.00	1.83	1.83	0	1.65	11.00	0	6.00	0	11.00	6.00	50 c + 40 v = £90
II	90.00	65	119.17	1.83	1.69	0.14	1.52	11.00	9.17	6.00	[5]	20.17	11.00	55.56 c + 44.44 v= £100
III	90.00	75	137.50	1.83	1.47	0.37	1.32	11.00	27.50	6.00	[15]	38.50	21.00	[Capital] £100=[value of the product] £122.22 Absolute rent 12.22%
Total	270.00	200	366.67					33.00	36.67	18.00	20	69.67	38.00

A is the starting position with £100 of capital invested in each type of land. Absolute rent of £10 is levied on each type of land, amounting to £30 in total, which is also equal to a corn rent of 15 kilos. Differential rent of £10 is levied on land type II, and £30 on land type III, making £40 in total, or a corn rent of 20 kilos. Total rent is then £70 or 35 kilos.

In B, only £90 of capital is advanced, but the organic composition of the capital remains constant. The result here is that the rent falls to £9 on each type of land, £27 in total. But, the physical amount of capital and labour employed has remained constant. It's just that now it is cheaper. So, the same quantity of output is produced, but now has a lower value per kilo. Consequently, viewed in physical terms, the corn rent also remains the same at 5 kilos for each type of land, or 15 kilos in total. Similarly, in physical terms, the amount of differential rent remains constant at 5 kilos for land II, and 15 kilos for land III, or 20 kilos in total, whilst in money terms, this represents £36 rather than £40. The total corn rent, therefore, remains constant at 35 kilos, whilst the money rent falls from £70 to £63.

In C, the value of constant capital falls, but the value of variable capital falls even more, so the organic composition of capital rises. As a result, the absolute rent falls. The absolute rent falls to 4.42 kilos, for each type of land, or 13.26 kilos in total. That equates to an absolute rent of £7.56 for each type of land, or £22.68 in total. The absolute rent falls because the organic composition of capital has risen. But, because that affects each type of land equally, there is no change in the differential rent measured in corn. However, because the total capital laid out has fallen from £100 to £86.40, so the value of each kilo falls, that means that both the absolute rent and the differential rent falls in money terms.

In D, only the value of the constant capital falls.

“This was Ricardo's assumption.” (p 327)

Because only the value of constant capital falls, the total value of output falls, but only marginally. The organic composition has fallen, which brings about an increase in absolute rent. It rises to 6 kilos for each type of land, or 18 kilos in total. In money terms, that equates to a rent of £11 for each type of land or £33 in total. In contrast, the differential rent remains constant measured in corn, because there is no variation in the relative fertility of each soil type, but the differential rent falls in money terms, from £40 to £36.67.

Ricardo says,

““Whatever diminishes the inequality in the produce obtained from successive portions of capital employed on the same or on new land, tends to lower rent; and […] whatever increases that inequality, necessarily produces an opposite effect, and tends to raise it” (l.c., p. 74).” (p 327-8) 

Marx comments that this inequality may increase whilst land is withdrawn, and whilst fertility increases (either because of improvements to the soil or a rising marginal productivity of capital) and even when the least fertile land is thrown out of production. So, absolute rent might fall, whilst differential rent increased.

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