## Monday, 11 June 2018

### Theories of Surplus Value, Part II, Chapter 16 - Part 18

Marx then turns to an analysis of the new scenarios introduced earlier in this chapter.

The market value per ton rises to £2.50, as an additional type of land Ib is introduced. With a capital of £100, it produces only 43.636 tons. The composition of the capital is £54.545 c + £45.455 v. The value of its product is £109.09. Because, the market value per ton has increased, so that wages increase, the £45.455 of wages is only enough to employ 18.18 workers. The profit is £9.09, giving a rate of profit of 9.09%. The rate of surplus value is 20%.

Marx says,

“Since the organic composition of the capitals in III, II, I is the same as in Ib and they must pay the same wages, they too can employ only 18 2/11 men with £100, these men produce a total value of £54 6/11, and therefore a surplus-value of 20 per cent and a rate of profit of 9 1/11 per cent as in Ib. The total value of the product here, as in Ib, is £109 1/11.” (p 447)

However, as seen previously, because the total output produced by these different capitals, differs considerably, as a result of varying fertility of the land, the individual value per ton varies significantly from one type of land to another. The output of land III is 68.18 tons. But, sold at its market value of £2.50 per ton, that amounts to £170.455, rather than its individual value of £109.09. That means it produces a surplus profit of £61.364. The differential value per ton, for II, is £2.50 - £1.60 = £0.90.

The following tables summarise the position for the capitals employed on these different types of land.
 [Class] Capital £ [Number of] tons ATV [Actual total value] £ TMV [Total market-value] £ MV [Market-value per ton] £ IV [Individual value per ton] £ DV [Differential value per ton] £ III 100 68.18 109.09 [£170.45] 2.50 1.600 [£0.900]. II 100 59.09 109.09 [£147.73] 2.50 1.846 [£0.654] I 100 54.55 109.09 [£136.36] 2.50 2.000 [£0.500] Ib 100 43.63 109.09 [£109.09] 2.50 2.500 0
 Composition of capital Number of workers [Rate of] surplus-value % Rate of profit % Wages [in] tons Profit [in] tons Rent £ Rent [in] tons 54.54 c+45.46 v 18.18 20 9.09 18.18 3.63 [£61.36] 24.55 54.54 c+45.46 v 18.18 20 9.09 18.18 3.63 [£38.63] 15.46 54.54 c+45.46 v 18.18 20 9.09 18.18 3.63 [£27.27] 10.91 54.54 c+45.46 v 18.18 20 9.09 18.18 3.63 0 0

Marx finally turns to the situation described by Ricardo, where productivity falls so low that wages rise to a level whereby all of the surplus value is consumed, and profit and the rate of profit fall to zero. In this case, the market value per ton rises to £3. If 20 workers were employed consuming 20 tons, wages would have to equal £60, which means the organic composition of capital would then be £60 c: £60 v, or 1:1. If we scale this back to a capital of £100, we then have £50 c + £50 v. At the new higher level of wages, the £50 is only enough to employ 16.66 workers.

If 20 workers produce £60 of new value, 16.66 workers produce £50 of new value, only equal to the value of their labour-power, so surplus value disappears. The total value of the output is £100, and with an individual price per ton of £3 that gives output of 33.33 tons on this new land Ia. But, on land type III, the individual value per ton is £1.60. Its output is then 62.5 tons x £1.60 = £100. But, again, it sells this output not at its individual value, but at the market value of £3 per ton (62.5 x £3 = £187.50). The differential value for land III is then £3 - £1.60 = £1.40 per ton = £87.50 (62.50 tons x £1.40 per ton). So, it produces a differential rent of £87.50

Similar calculations apply to the other land types. The situation is summarised in the following tables.
 [Class] Capital £ [Number of] tons ATV [Actual total value] £ TMV [Total market-value] £ MV [Market-value per ton] £ IV [Individual value per ton] £ DV [Differential value per ton] £ III 100 62.50 100 187.50 3.00 1.60 1.40 II 100 54.17 100 162.50 3.00 1.85 1.15 I 100 50.00 100 150.00 3.00 2.00 1.00 Ib 100 40.00 100 120.00 3.00 2.50 0.50 Ia 100 33.33 100 100.00 3.00 3.00 0
 Composition of capital Number of workers Rate of surplus-value % Rate of profit % Wages in tons Rent £ Rent in tons 50 c + 50 v 16.66 0 0 16.66 87.50 29.17 50 c + 50 v 16.66 0 0 16.66 62.50 20.85 50 c + 50 v 16.66 0 0 16.66 50.00 16.66 50 c + 50 v 16.66 0 0 16.66 20.00 6.66 50 c + 50 v 16.66 0 0 16.66 0 0

Marx then sets out all five scenarios in table form.
 [Class] Capital £ [Number of] tons Actual total value £ Total market-value £ Market value per ton £ Individual value per ton £ Differential value per ton £ Composition of capital Number of workers Rate of surplus-value % Profit £ Profit in tons Wages in tons Money rent £ Rent in tons A. Only the best class, III, is cultivated. Non-existence of rent. Only the most fertile land or mine is cultivated. III 100 81.52 130.43 130.43 1.60 1.60 0 65.20 c + 34.80 v 21.74 87.50 30.43 19.02 21.74 0 0 B. Second class, II, is added. Rent comes into existence on land(mine) III III 100 77.38 123.81 142.86 1.85 1.60 [0.246] 61.90 c + 38.10 v 20.63 62.50 23.81 12.90 20.63 19.05 10.32 I 100 67.06 123.81 123.81 1..85 1.85 0 61.90 c + 38.10 v 20.63 62.50 23.81 12.90 20.63 0 0 Total 200 144.44 247.62 266.67 41.26 47.62 25.80 41.26 19.05 10.32 C. Third class, I , is added. Rent comes into existence on land (mine) II III 100 75.00 120.00 150.00 2.00 1.60 [£0.40] 60 c + 40 v 20.00 50.00 20.00 10.00 20.00 30.00 15.00 II 100 65.00 120.00 130.00 2.00 1.85 [£0.15] 60 c + 40 v 20.00 50.00 20.00 10.00 20.00 10.00 5.00 I 100 60.00 120.00 120.00 2.00 2.00 0 60 c + 40 v 20.00 50.00 20.00 10.00 20.00 0 0 Total 300 200.00 360.00 400.00 60.00 60.00 30.00 60.00 40.00 20.00 D. Fourth class, Ib, is added. Rent comes into existence on land (mine) I III 100 68.18 109.09 [£170.46] 2.50 1.60 [£0.90] 54.55 c + 45.45 v 18.18 20.00 9.09 3.64 18.18 [£61.36] 24.55 II 100 59.09 109.09 [£147.73] 2.50 1.85 [£0.65] 54.55 c + 45.45 v 18.18 20.00 9.09 3.64 18.18 [£38.64] 15.46 I 100 54.55 109.09 [£136.36] 2.50 2.00 [£0.50] 54.55 c + 45.45 v 18.18 20.00 9.09 3.64 18.18 [£27.27] 10.91 Ib 100 43.64 109.09 [£109.09] 2.50 2.50 0 54.55 c + 45.45 v 18.18 20.00 9.09 3.64 18.18 0 0 Total 400 225.46 436.36 [£563.64] 72.73 36.36 14.55 72.73 E. Fifth class, Ib, is added. Surplus-value and profit disappear altogether. III 100 62.50 100.00 187.50 3.00 1.60 1.40 50 c+50 v 16.66 0 0 0 16.66 87.50 29.17 II 100 54.17 100.00 162.50 3.00 1.85 1.15 50 c+50 v 16.66 0 0 0 16.66 62.50 20.83 I 100 50.00 100.00 150.00 3.00 2.00 1.00 50 c+50 v 16.66 0 0 0 16.66 50.00 16.66 Ib 100 40.00 100.00 120.00 3.00 2.50 0.50 50 c+50 v 16.66 0 0 0 16.66 20.00 6.66 Ia 100 33.33 100.00 100.00 3.00 3.00 0 50 c+50 v 16.66 0 0 0 16.66 0 0 Total 500 240.00 500.00 720.00 83.33 83.33 220.00 73.33