Theories of Surplus Value, Part II, Chapter 13 - Part 12

Marx refers back to the examples previously given in Chapter 12 

The organic composition of capital in industry is taken as 80 c + 20 v, and in agriculture as 60 c + 40 v. In both, the rate of surplus value is 50%. The rate of profit in industry is then 10%, and this determines the general rate of profit. As the rate of profit in agriculture would be 20%, with the value of agricultural output being 120, that means that there is surplus profit of 10, giving rise to a rent of that amount.

Class	Capital £'s	Kilos of corn	Total value £'s	Market-value per Kilo. £'s	Individual value per Kilo. £'s
I	100.00	65	120.00	2.00	2.00
II	100.00	65	130.00	2.00	1.846
III	100.00	75	150.00	2.00	1.600
Total	300.00	200	400.00

	Differential value per Kilo. £'s	Price of production per Kilo £'s	Absolute rent £'s	Differential rent £'s
I	0	1.833	10.00	5.00
II	0.154	1.462	10.00	10.00
III	0.400	1.133	10.00	20.00
			30.00	35.00

	Absolute Rent in Kilos.	Differential rent in Kilos	Rental £'s	Rental in Kilos
I	5	0	10.00	5
II	5	5	20.00	10
III	5	15	40.00	20
	15	20	70.00	35

Marx assumes that the effect of a fall in the value of constant capital is the same for whatever type of soil is considered. He assumes a 10% reduction in the value of constant capital from £100 to £90.

There are basically three scenarios that might exist. Firstly, the fall in the value of constant capital might result in an equal fall in the value of variable-capital, or the fall in the value of the variable capital might be proportionately greater or smaller, or finally, the value of variable capital may remain constant, but a fall in the value of constant capital releases capital so that more of both are employed.

If the organic composition of capital of 60:40 remains constant, then on a capital of £90 this would equate to £54 c + £36 v. The value of the land type I output (60 kilos) would then be £54 c + £36 v + £18 s = £108. For this to be the case, the same rise in social productivity that reduced the value of constant capital by 10%, would have to reduce the value of wage goods by 10%, leading to a 10% fall in wages. But, if wages fell by more than 10%, so that v falls not to £36, but to £32.40, the laid out capital falls to £86.40. The value of the 60 kilos is then £54 c + £32.40 v + £16.20 s = £102.60. The organic composition of capital here then would be 62.75:37.5.

Finally, the amount laid out for wages could remain the same so that it rises relative to the constant capital, leading to a lower organic composition. If £90 is laid out and £40 is laid out as variable capital, that leaves £50 to be laid out as constant capital. For that to be the case, there also has to be a change in the technical composition of capital, reflecting a fall in agricultural productivity. The original composition would then be 50:40, and the value of output would be £50 c + £40 v + £20 s = £110.

The consequence of this can be seen in the following table.

Capital	Absolute Rent %	Absolute rent £'s	Differential rent £'s	Absolute rent Kilos	Differential rent Kilos	Rental £'s	Rental Kilos
A) 60 c+40 v	10.00	30.00	40.00	15.00	20.00	70.00	35.00
B) 54 c+36 v (60 c+40 v)	10.00	27.00	36.00	15.00	20.00	63.00	35.00
C) 54 c + 32.40 v (62.50 c+37.50 v)	8.75	22.03	34.20	13.26	20.00	56.88	33.26
D) 50c+40v (55.56 c+44.44 v)	12.22	33.00	36.66	18.00	20.00	69.66	38.00

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